Glossary

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Glossary Entries
Word(s)	Definition	Image	Caption	Link	Source
accelerated depreciation	Any method of determining depreciation that assigns larger expenses to the initial years of an asset’s service and smaller expenses to the later years; it is justified by the assumption that newer assets generate more revenues than older assets do.
accounting equation	Assets = liabilities + stockholders’ equity. The equation balances because all assets must have a source: a liability, a contribution from an owner (contributed capital), or from operations (retained earnings).
accounts	Detailed records of the transactions and current balances of specific assets, liabilities, stockholders’ equity, revenues and expenses.
accounts	Detailed records of the transactions and current balances of specific assets, liabilities, stockholders’ equity, revenues and expenses.
accounts payable	Short-term liabilities to pay for goods and services that have been acquired.
accrual accounting	System required by U.S. GAAP to standardize the timing of the recognition of revenues and expenses; it is made up of the revenue realization principle and the matching principle.
accrued expense	Expenses (and the related liabilities) that grow gradually over time; impact is recorded prior to preparing financial statements by means of an adjusting entry to update both accounts.
accrued liabilities	Liabilities that grow gradually because of the passage of time; common examples include salaries and interest.
accumulated depreciation	A contra-asset account created to measure the cost of a depreciable asset (such as buildings and equipment) that has been assigned to expense to date.
accumulated depreciation	A contra-asset account created to measure the cost of a depreciable asset (such as buildings and equipment) that has been assigned to expense to date.
actuary	An individual who mathematically computes the likelihood of future events.
actuary	An individual who mathematically computes the likelihood of future events.
adjusting entries	Changes in account balances recorded prior to making financial statements to update T-accounts because some amounts have increased or decreased gradually over time but not recorded through a normal journal entry.
adjusting entries	Changes in account balances recorded prior to making financial statements to update T-accounts because some amounts have increased or decreased gradually over time but not recorded through a normal journal entry.
advisory work	Professional services performed by many CPA firms to assist businesses in operating more effectively and efficiently, and, therefore, more profitably.
advisory work	Professional services performed by many CPA firms to assist businesses in operating more effectively and efficiently, and, therefore, more profitably.
age of accounts payable	A determination of the number of days that a company takes to pay for the inventory that it buys; it is computed by dividing accounts payable by the average inventory purchases per day during the period.
age of accounts payable	A determination of the number of days that a company takes to pay for the inventory that it buys; it is computed by dividing accounts payable by the average inventory purchases per day during the period.
aging method	Variation of percentage of receivables method where all receivables are categorized by age; the total of each category is multiplied by an appropriate percentage and then summed to determine the allowance balance.
aging method	Variation of percentage of receivables method where all receivables are categorized by age; the total of each category is multiplied by an appropriate percentage and then summed to determine the allowance balance.
allowance for doubtful accounts	A contra asset account reflecting the estimated amount of accounts receivable that will eventually fail to be collected and, thus, written off as uncollectible.
allowance for doubtful accounts	A contra asset account reflecting the estimated amount of accounts receivable that will eventually fail to be collected and, thus, written off as uncollectible.
American Institute of Certified Public Accountants (AICPA)	A national professional organization of CPAs that sets ethical requirements, conducts research, and helps set a high standard for the profession.
American Institute of Certified Public Accountants (AICPA)	A national professional organization of CPAs that sets ethical requirements, conducts research, and helps set a high standard for the profession.
Amortization	A mechanically derived pattern allocating an intangible asset’s cost to expense over the shorter of the legal life or useful life; it is the equivalent of depreciation but relates to intangible assets.
Amortization	A mechanically derived pattern allocating an intangible asset’s cost to expense over the shorter of the legal life or useful life; it is the equivalent of depreciation but relates to intangible assets.
annuity due	Annuity with payments made at the beginning of each period; it is also called an annuity in advance.
annuity due	Annuity with payments made at the beginning of each period; it is also called an annuity in advance.
asset exchange	A trade of one asset for another in which the book value of the old asset is removed from the records while the new asset is recorded at the fair value surrendered (if known); the difference creates a gain or loss to be reported.
asset exchange	A trade of one asset for another in which the book value of the old asset is removed from the records while the new asset is recorded at the fair value surrendered (if known); the difference creates a gain or loss to be reported.
audit	A examination carried out by an independent auditor of the evidence underlying the balances presented in a set of financial statements followed by the issuance of a public report that provides an opinion as to whether the statements contain material misstatements in accordance with U.S. GAAP; if not, the statements can be viewed as fairly presented, which adds credibility to the information provided.
audit	A examination carried out by an independent auditor of the evidence underlying the balances presented in a set of financial statements followed by the issuance of a public report that provides an opinion as to whether the statements contain material misstatements in accordance with U.S. GAAP; if not, the statements can be viewed as fairly presented, which adds credibility to the information provided.
audit report	Formal written opinion issued by an independent auditor to communicate findings at the conclusion of an audit as to whether a specific set of financial statements contain any material misstatements according to U.S. GAAP; if not, the statements are viewed as fairly presented.
audit report	Formal written opinion issued by an independent auditor to communicate findings at the conclusion of an audit as to whether a specific set of financial statements contain any material misstatements according to U.S. GAAP; if not, the statements are viewed as fairly presented.
Authorized	The maximum number of shares that a corporation can issue based on the articles of incorporation approved by the state government at the time of incorporation.
Authorized	The maximum number of shares that a corporation can issue based on the articles of incorporation approved by the state government at the time of incorporation.
available-for-sale securities	Classification of investments in stocks and bonds when management’s intentions are to retain them for an indefinite period; they are reported on the balance sheet at fair value although gains and losses are included in stockholders’ equity and not within net income.
available-for-sale securities	Classification of investments in stocks and bonds when management’s intentions are to retain them for an indefinite period; they are reported on the balance sheet at fair value although gains and losses are included in stockholders’ equity and not within net income.
average age of accounts receivable	Formula measuring the average length of time it takes to collect cash from sales; calculated by dividing average accounts receivable for the period by sales per day.
average age of accounts receivable	Formula measuring the average length of time it takes to collect cash from sales; calculated by dividing average accounts receivable for the period by sales per day.
Averaging	Inventory cost flow assumption based on the average cost being transferred from inventory to cost of goods sold so that the same average cost remains in ending inventory.
Averaging	Inventory cost flow assumption based on the average cost being transferred from inventory to cost of goods sold so that the same average cost remains in ending inventory.
bad debt expense	Estimated expense from making credit sales to customers who will never pay; because of the matching principle, recorded in the same period as the sales revenue.
bad debt expense	Estimated expense from making credit sales to customers who will never pay; because of the matching principle, recorded in the same period as the sales revenue.
Balance sheet	A listing of all asset, liability, and stockholders’ equity accounts at a specific point in time; also called statement of financial position.
Balance sheet	A listing of all asset, liability, and stockholders’ equity accounts at a specific point in time; also called statement of financial position.
bankruptcy	A formal court process that often results in the liquidation of a company that cannot pay its liabilities as they come due; in some cases, bankrupt companies are allowed to reorganize their finances and operations so that liquidation is not deemed to be necessary.
bankruptcy	A formal court process that often results in the liquidation of a company that cannot pay its liabilities as they come due; in some cases, bankrupt companies are allowed to reorganize their finances and operations so that liquidation is not deemed to be necessary.
basic EPS	A figure that must be reported by corporations that have their stock publicly traded; it is net income less preferred stock dividends divided by the weighted-average number of shares of common stock outstanding during the same period.
basic EPS	A figure that must be reported by corporations that have their stock publicly traded; it is net income less preferred stock dividends divided by the weighted-average number of shares of common stock outstanding during the same period.
basket purchase	The acquisition of more than one asset at a single cost, which is then allocated among those assets based on relative values.
basket purchase	The acquisition of more than one asset at a single cost, which is then allocated among those assets based on relative values.
Big Four	Term used to encompass the four largest CPA firms operating internationally: Deloitte Touche Tohmatsu, Ernst & Young, KPMG, and PricewaterhouseCoopers; these four firms perform independent audits on most of the world’s largest companies.
Big Four	Term used to encompass the four largest CPA firms operating internationally: Deloitte Touche Tohmatsu, Ernst & Young, KPMG, and PricewaterhouseCoopers; these four firms perform independent audits on most of the world’s largest companies.
board of directors	A group that oversees the management of a corporation; the members are voted to this position by stockholders; it hires the management to run the company on a daily basis and then meets periodically to review operating and financing results and also approve policy and strategy.
board of directors	A group that oversees the management of a corporation; the members are voted to this position by stockholders; it hires the management to run the company on a daily basis and then meets periodically to review operating and financing results and also approve policy and strategy.
bond	A written contract created by a debtor that is sold (often to members of the general public) to raise money.
bond	A written contract created by a debtor that is sold (often to members of the general public) to raise money.
capital in excess of par value	Figure represents amount received by a corporation from the original issuance of capital stock that is in excess of par value; also called additional paid in capital.
capital in excess of par value	Figure represents amount received by a corporation from the original issuance of capital stock that is in excess of par value; also called additional paid in capital.
capital lease	A rental agreement where the benefits and risks of ownership are conveyed from the lessor to the lessee; for accounting purposes, it exists when one of four established criteria are met.
capital lease	A rental agreement where the benefits and risks of ownership are conveyed from the lessor to the lessee; for accounting purposes, it exists when one of four established criteria are met.
capital stock	Ownership (equity) shares of stock in a corporation that are issued to raise financing for capital expenditures and operations.
capital stock	Ownership (equity) shares of stock in a corporation that are issued to raise financing for capital expenditures and operations.
capitalization	The process of recording as an asset all the normal and necessary costs associated with getting the asset into position and condition to be sold (in the case of inventory) or used to help generate revenue (in the case of noncurrent assets, such as land, buildings, and equipment).
capitalization	The process of recording as an asset all the normal and necessary costs associated with getting the asset into position and condition to be sold (in the case of inventory) or used to help generate revenue (in the case of noncurrent assets, such as land, buildings, and equipment).
capitalized	Interest cost incurred during the construction of a long-lived asset that is added to historical cost rather than being recorded as interest expense; it is viewed as a normal and necessary expenditure to get the asset into position and condition to generate revenues.
capitalized	Interest cost incurred during the construction of a long-lived asset that is added to historical cost rather than being recorded as interest expense; it is viewed as a normal and necessary expenditure to get the asset into position and condition to generate revenues.
cash equivalents	Short-term, highly liquid investments with original maturities of ninety days or fewer that are readily converted into known amounts of cash.
cash equivalents	Short-term, highly liquid investments with original maturities of ninety days or fewer that are readily converted into known amounts of cash.
Certified Public Accountants (CPAs)	Individuals who have met state requirements of education, practical experience, and passing the Uniform CPA Examination; the CPA designation is a license that allows a person to provide auditing and other accounting services to the public and serves as a symbol of technical expertise.
Certified Public Accountants (CPAs)	Individuals who have met state requirements of education, practical experience, and passing the Uniform CPA Examination; the CPA designation is a license that allows a person to provide auditing and other accounting services to the public and serves as a symbol of technical expertise.
closing entries	Entries made to reduce all temporary ledger accounts (revenues, expenses, gains, losses, and dividends paid) to zero at the end of an accounting period so that a new measurement for the subsequent period can begin; the net effect of this process is transferred into the retained earnings account to update the beginning balance to the year-end figure.
closing entries	Entries made to reduce all temporary ledger accounts (revenues, expenses, gains, losses, and dividends paid) to zero at the end of an accounting period so that a new measurement for the subsequent period can begin; the net effect of this process is transferred into the retained earnings account to update the beginning balance to the year-end figure.
commitment	An unexecuted contract such as for the future purchase of inventory at a set price; necessitates disclosure of extensive information in the financial statement footnotes although amounts are not reported on the balance sheet or income statement because no transaction has yet occurred.
commitment	An unexecuted contract such as for the future purchase of inventory at a set price; necessitates disclosure of extensive information in the financial statement footnotes although amounts are not reported on the balance sheet or income statement because no transaction has yet occurred.
Common stock	A type of capital stock that is issued by every corporation; it provides rights to the owner that are specified by the laws of the state in which the organization is incorporated.
Common stock	A type of capital stock that is issued by every corporation; it provides rights to the owner that are specified by the laws of the state in which the organization is incorporated.
comprehensive income	Net income plus any unrealized gains and less any unrealized losses that appear in the stockholders’ equity section rather than within net income; it can be shown at the bottom of the income statement or in a separate schedule.
comprehensive income	Net income plus any unrealized gains and less any unrealized losses that appear in the stockholders’ equity section rather than within net income; it can be shown at the bottom of the income statement or in a separate schedule.
consolidated financial statements	Statements that are prepared when one company holds control over another company.
consolidated financial statements	Statements that are prepared when one company holds control over another company.
contingency	A potential gain or loss that might arise as a result of a past event; uncertainty exists as to likelihood of the gain or loss occurring and the actual amount, if any, that will result.
contingency	A potential gain or loss that might arise as a result of a past event; uncertainty exists as to likelihood of the gain or loss occurring and the actual amount, if any, that will result.
contra account	Offset to an account that reduces the total balance to a net amount; in this chapter, the allowance for doubtful accounts always reduces accounts receivable to the amount expected to be collected.
contra account	Offset to an account that reduces the total balance to a net amount; in this chapter, the allowance for doubtful accounts always reduces accounts receivable to the amount expected to be collected.
contributed capital	Amounts invested in a corporation by individuals or groups in order to attain ownership interests; balance is reported within stockholders’ equity section of balance sheet to indicate the amount of the net assets that came from the owners.
contributed capital	Amounts invested in a corporation by individuals or groups in order to attain ownership interests; balance is reported within stockholders’ equity section of balance sheet to indicate the amount of the net assets that came from the owners.
control	Indicates that consolidated financial statements should be reported by bringing together the financial information of two companies; according to U.S. GAAP, it exists when one company owns more than 50 percent of the outstanding common shares of another company.
control	Indicates that consolidated financial statements should be reported by bringing together the financial information of two companies; according to U.S. GAAP, it exists when one company owns more than 50 percent of the outstanding common shares of another company.
copyrights	An intangible asset that provides the owner with the right to use literary, dramatic, musical, artistic, and certain other intellectual works.
copyrights	An intangible asset that provides the owner with the right to use literary, dramatic, musical, artistic, and certain other intellectual works.
corporation	An organization that has been formally recognized by the state government as a legal entity so that it can sell ownership shares to raise money for capital expenditures and operations; business is legally separate from its owners through incorporation.
corporation	An organization that has been formally recognized by the state government as a legal entity so that it can sell ownership shares to raise money for capital expenditures and operations; business is legally separate from its owners through incorporation.
Covenants	Promises made by the debtor in a debt contract to help ensure that sufficient money will be available to make required payments at the scheduled times.
Covenants	Promises made by the debtor in a debt contract to help ensure that sufficient money will be available to make required payments at the scheduled times.
credit	Right side of a T-account used to show increases in liabilities, shareholders’ equity, and revenues and decreases in assets, expenses, and dividends paid.
credit	Right side of a T-account used to show increases in liabilities, shareholders’ equity, and revenues and decreases in assets, expenses, and dividends paid.
cumulative	Feature attached to most types of preferred stock so that any dividend payments that are omitted one year must still be paid before the holders of common stock receive any dividends.
cumulative	Feature attached to most types of preferred stock so that any dividend payments that are omitted one year must still be paid before the holders of common stock receive any dividends.
current liabilities	Debts that will be satisfied within one year from the date of a balance sheet.
current liabilities	Debts that will be satisfied within one year from the date of a balance sheet.
current ratio	Formula measuring an organization’s liquidity (the ability to pay debts as they come due); calculated by dividing current assets by current liabilities.
current ratio	Formula measuring an organization’s liquidity (the ability to pay debts as they come due); calculated by dividing current assets by current liabilities.
date of declaration	Date on which dividend payments are formally declared (approved) by the board of directors; it is the day on which a liability is recorded by the corporation.
date of declaration	Date on which dividend payments are formally declared (approved) by the board of directors; it is the day on which a liability is recorded by the corporation.
date of payment	Date on which a cash dividend is distributed to those shareholders who held a corporation’s stock on the date of record; it is also known as the date of distribution.
date of payment	Date on which a cash dividend is distributed to those shareholders who held a corporation’s stock on the date of record; it is also known as the date of distribution.
date of record	Date on which stock must be held for a shareholder to be entitled to the receipt of a dividend; the date of record is specified by the board of directors when the dividend is declared.
date of record	Date on which stock must be held for a shareholder to be entitled to the receipt of a dividend; the date of record is specified by the board of directors when the dividend is declared.
debenture	A debt contract that does not contain any type of security for the creditor; these contracts are usually offered by debtors that are considered financially strong so that no additional security is required by the creditor to reduce the chance of loss.
debenture	A debt contract that does not contain any type of security for the creditor; these contracts are usually offered by debtors that are considered financially strong so that no additional security is required by the creditor to reduce the chance of loss.
debt-to-equity ratio	A measure of a company’s use of debt for financing purposes; it is computed by dividing total liabilities by total stockholders’ equity
debt-to-equity ratio	A measure of a company’s use of debt for financing purposes; it is computed by dividing total liabilities by total stockholders’ equity
deferred tax liability	A balance sheet account indicating a smaller current payment of income taxes but with a higher amount due in the future; taxable income will be higher than book income in the future, which necessitates the reporting of the liability.
deferred tax liability	A balance sheet account indicating a smaller current payment of income taxes but with a higher amount due in the future; taxable income will be higher than book income in the future, which necessitates the reporting of the liability.
depletion	A method of allocating the cost of a wasting asset (such as a gold mine or an oil well) to expense over the periods during which the value is removed.
depletion	A method of allocating the cost of a wasting asset (such as a gold mine or an oil well) to expense over the periods during which the value is removed.
depreciation	A mechanically derived pattern allocating the cost of assets such as buildings and equipment to expense over the expected number of years that they will be used to help generate revenues.
depreciation	A mechanically derived pattern allocating the cost of assets such as buildings and equipment to expense over the expected number of years that they will be used to help generate revenues.
development	The translation of new knowledge into actual products or services or into significant improvements in existing products or services; these costs are expensed as incurred according to U.S. GAAP.
development	The translation of new knowledge into actual products or services or into significant improvements in existing products or services; these costs are expensed as incurred according to U.S. GAAP.
Diluted EPS	Hypothetical computation that reduces basic earnings per share to reflect the possible dilution if outstanding convertible items were actually turned into common stock; it includes the potential impact of stock options, convertible bonds and convertible preferred stock to warn decision makers of the consequences if those convertibles are turned into common stock.
Diluted EPS	Hypothetical computation that reduces basic earnings per share to reflect the possible dilution if outstanding convertible items were actually turned into common stock; it includes the potential impact of stock options, convertible bonds and convertible preferred stock to warn decision makers of the consequences if those convertibles are turned into common stock.
dividends	Distributions
dividends	Distributions
dividends	Distributions made by a corporation to its shareholders as a reward when income has been earned; shareholders often receive favorable tax treatment when cash dividends are collected.
dividends	Distributions made by a corporation to its shareholders as a reward when income has been earned; shareholders often receive favorable tax treatment when cash dividends are collected.
double taxation	A negative feature associated with the corporate form of organization; corporate earnings are taxed first when earned and then taxed again when distributed to owners in the form of dividends.
double taxation	A negative feature associated with the corporate form of organization; corporate earnings are taxed first when earned and then taxed again when distributed to owners in the form of dividends.
double-declining balance method (DDB)	An accelerated method that computes depreciation each year by multiplying the asset’s book value (cost less accumulated depreciation) times two divided by the expected useful life.
double-declining balance method (DDB)	An accelerated method that computes depreciation each year by multiplying the asset’s book value (cost less accumulated depreciation) times two divided by the expected useful life.
double-entry bookkeeping	A mechanical process created over five hundred years ago and documented by Fra Luca Bartolomeo de Pacioli that facilitates the gathering and reporting of financial information.
double-entry bookkeeping	A mechanical process created over five hundred years ago and documented by Fra Luca Bartolomeo de Pacioli that facilitates the gathering and reporting of financial information.
EDGAR (Electronic Data Gathering and Retrieval)	SEC reporting system requiring companies to file their financial statements electronically to allow current and potential investors to obtain this information quickly and easily over the Internet as needed.
EDGAR (Electronic Data Gathering and Retrieval)	SEC reporting system requiring companies to file their financial statements electronically to allow current and potential investors to obtain this information quickly and easily over the Internet as needed.
effective rate	The interest rate determined by negotiation and market forces that is used to set the price of bonds; it is also called the yield rate or negotiated rate and often varies from the stated interest rate used to establish cash interest payments.
effective rate	The interest rate determined by negotiation and market forces that is used to set the price of bonds; it is also called the yield rate or negotiated rate and often varies from the stated interest rate used to establish cash interest payments.
embedded product warranty	An obligation established by the sale of a product where the seller promises to fix or replace the product if it proves to be defective.
embedded product warranty	An obligation established by the sale of a product where the seller promises to fix or replace the product if it proves to be defective.
Emerging Issues Task Force (EITF)	A group formed to assist FASB by examining new accounting issues as they arise in hopes of arriving at quick agreement as to the appropriate method of reporting based on existing U.S. GAAP.
Emerging Issues Task Force (EITF)	A group formed to assist FASB by examining new accounting issues as they arise in hopes of arriving at quick agreement as to the appropriate method of reporting based on existing U.S. GAAP.
equity method	A method of reporting an investment in stock that is applied when the owner has the ability to exert significant influence on the decisions of an investee; it is used to report investments where 20 percent or more and less than or equal to 50 percent of the shares are held, unless evidence exists that significant influence does not exist.
equity method	A method of reporting an investment in stock that is applied when the owner has the ability to exert significant influence on the decisions of an investee; it is used to report investments where 20 percent or more and less than or equal to 50 percent of the shares are held, unless evidence exists that significant influence does not exist.
expenses	Measures of decreases in or outflows of net assets (assets minus liabilities) incurred in connection with the generation of revenues.
expenses	Measures of decreases in or outflows of net assets (assets minus liabilities) incurred in connection with the generation of revenues.
fair value test	A test to determine the amount, if any, by which the value of a long-lived asset has been impaired; if fair value is less than present book value, the fair value becomes the new basis and an impairment loss is recorded.
fair value test	A test to determine the amount, if any, by which the value of a long-lived asset has been impaired; if fair value is less than present book value, the fair value becomes the new basis and an impairment loss is recorded.
FIFO	Inventory cost flow assumption based on the oldest costs being transferred first from inventory to cost of goods sold so that the most recent costs remain in ending inventory.
FIFO	Inventory cost flow assumption based on the oldest costs being transferred first from inventory to cost of goods sold so that the most recent costs remain in ending inventory.
financial accounting	The communication of financial information about a business or other type of organization to external audiences in order to help them assess its financial health and prospects.
financial accounting	The communication of financial information about a business or other type of organization to external audiences in order to help them assess its financial health and prospects.
financial leverage	A company’s ability to earn more on borrowed money than the associated interest cost on those funds; often viewed as a wise business strategy although risks (such as possible bankruptcy) are higher.
financial leverage	A company’s ability to earn more on borrowed money than the associated interest cost on those funds; often viewed as a wise business strategy although risks (such as possible bankruptcy) are higher.
financial statements	Quantitative reports and related verbal disclosures describing and detailing the operations, financial position, and cash flows of an organization.
financial statements	Quantitative reports and related verbal disclosures describing and detailing the operations, financial position, and cash flows of an organization.
financing activities	A statement of cash flow category used to disclose cash receipts and disbursements arising from a liability or stockholders’ equity transaction other than one relating to the primary activities of the organization.
financing activities	A statement of cash flow category used to disclose cash receipts and disbursements arising from a liability or stockholders’ equity transaction other than one relating to the primary activities of the organization.
Financing activities	A statement of cash flow category used to disclose cash receipts and disbursements arising from a liability or stockholders’ equity transaction other than one relating to the primary activities of the organization.
Financing activities	A statement of cash flow category used to disclose cash receipts and disbursements arising from a liability or stockholders’ equity transaction other than one relating to the primary activities of the organization.
fixed asset turnover	Ratio calculated by dividing net sales by the average of the net fixed assets reported for the period; it indicates the efficiency by which these assets have been used to generate sales revenues.
fixed asset turnover	Ratio calculated by dividing net sales by the average of the net fixed assets reported for the period; it indicates the efficiency by which these assets have been used to generate sales revenues.
FOB destination	Terms of sale stipulating that legal title to shipped goods passes to the buyer when they arrive at the final destination so that the seller is responsible for transportation costs and any damages or losses in transit.
FOB destination	Terms of sale stipulating that legal title to shipped goods passes to the buyer when they arrive at the final destination so that the seller is responsible for transportation costs and any damages or losses in transit.
forensic accounting	A branch of accounting specializing in investigating and reporting on situations where important information is limited or unavailable.
forensic accounting	A branch of accounting specializing in investigating and reporting on situations where important information is limited or unavailable.
fraud	An intentional misstatement of financial information; it can result from misappropriation of assets (theft) or fraudulent financial reporting.
fraud	An intentional misstatement of financial information; it can result from misappropriation of assets (theft) or fraudulent financial reporting.
gain contingencies	A potential gain resulting from a past event that is not recognized in the financial statements until it actually occurs due to the principle of conservatism.
gain contingencies	A potential gain resulting from a past event that is not recognized in the financial statements until it actually occurs due to the principle of conservatism.
general journal	The physical location of all journal entries; the diary of a company capturing the impact of financial events as they took place; it is also referred to as the journal.
general journal	The physical location of all journal entries; the diary of a company capturing the impact of financial events as they took place; it is also referred to as the journal.
generally accepted accounting principles	A recognized set of accounting rules used and followed in the United States of America.
generally accepted accounting principles	A recognized set of accounting rules used and followed in the United States of America.
Gift Card Liabilities	An obligation arising when a business accepts cash in exchange for a card that can be redeemed for a specified amount of assets or services.
Gift Card Liabilities	An obligation arising when a business accepts cash in exchange for a card that can be redeemed for a specified amount of assets or services.
goodwill	The price paid by one company to acquire another that is in excess of the fair value of the net identifiable assets and liabilities of the other company; it is often associated with intangibles that cannot be recognized such as employee expertise and customer loyalty, which make the company especially profitable.
goodwill	The price paid by one company to acquire another that is in excess of the fair value of the net identifiable assets and liabilities of the other company; it is often associated with intangibles that cannot be recognized such as employee expertise and customer loyalty, which make the company especially profitable.
Governmental Accounting Standards Board (GASB)	Nonprofit organization that holds the authority for establishing accounting standards for state and local government units in the United States.
Governmental Accounting Standards Board (GASB)	Nonprofit organization that holds the authority for establishing accounting standards for state and local government units in the United States.
gross profit	Difference between sales and cost of goods sold; also called gross margin or markup.
gross profit	Difference between sales and cost of goods sold; also called gross margin or markup.
half-year convention	Method of calculating depreciation for depreciable assets that are held for any period less than a year by automatically taking one-half of year of depreciation; it makes the maintenance of exact records unnecessary.
half-year convention	Method of calculating depreciation for depreciable assets that are held for any period less than a year by automatically taking one-half of year of depreciation; it makes the maintenance of exact records unnecessary.
historical cost	All the normal and necessary amounts incurred to get an asset into the position and condition to help generate revenues; it is the starting basis for the balance sheet presentation of assets such as inventory, land, and equipment.
historical cost	All the normal and necessary amounts incurred to get an asset into the position and condition to help generate revenues; it is the starting basis for the balance sheet presentation of assets such as inventory, land, and equipment.
impairment loss	Reported for long-lived assets when certain rules are met that indicate that fair value has dropped below cost so that the cost cannot be recovered.
impairment loss	Reported for long-lived assets when certain rules are met that indicate that fair value has dropped below cost so that the cost cannot be recovered.
indirect method	A mechanical method of reporting the amount of cash flows that a company generates from its operating activities; it is allowed by FASB (although the direct method is viewed as superior) but it is used by a vast majority of businesses in the United States.
indirect method	A mechanical method of reporting the amount of cash flows that a company generates from its operating activities; it is allowed by FASB (although the direct method is viewed as superior) but it is used by a vast majority of businesses in the United States.
intangible assets	An asset lacking physical substance that is expected to help generate future revenues for more than one year; common examples are patents, copyrights, and trademarks.
intangible assets	An asset lacking physical substance that is expected to help generate future revenues for more than one year; common examples are patents, copyrights, and trademarks.
interest	The charge for using money over time, often associated with long-term loans; even if not specifically mentioned in the debt agreement, U.S. GAAP requires it to be computed and reported based on a reasonable rate.
interest	The charge for using money over time, often associated with long-term loans; even if not specifically mentioned in the debt agreement, U.S. GAAP requires it to be computed and reported based on a reasonable rate.
interest	The charge for using money over time, often associated with long-term loans; even if not specifically mentioned in the debt agreement, U.S. GAAP requires it to be computed and reported based on a reasonable rate.
interest	The charge for using money over time, often associated with long-term loans; even if not specifically mentioned in the debt agreement, U.S. GAAP requires it to be computed and reported based on a reasonable rate.
interest	The charge for using money over time, often associated with long-term loans; even if not specifically mentioned in the debt agreement, U.S. GAAP requires it to be computed and reported based on a reasonable rate.
interest	The charge for using money over time, often associated with long-term loans; even if not specifically mentioned in the debt agreement, U.S. GAAP requires it to be computed and reported based on a reasonable rate.
internal control	A group of policies and procedures within the accounting and other systems of a company to provide reasonable assurance that they are each operating efficiently and effectively as intended by management.
internal control	A group of policies and procedures within the accounting and other systems of a company to provide reasonable assurance that they are each operating efficiently and effectively as intended by management.
inventory	A current asset bought or manufactured for the purpose of selling in order to generate revenue.
inventory	A current asset bought or manufactured for the purpose of selling in order to generate revenue.
inventory	A current asset bought or manufactured for the purpose of selling in order to generate revenue.
inventory	A current asset bought or manufactured for the purpose of selling in order to generate revenue.
inventory	A current asset bought or manufactured for the purpose of selling in order to generate revenue.
inventory	A current asset bought or manufactured for the purpose of selling in order to generate revenue.
inventory turnover	Ratio used to measure the speed at which a company sells its inventory; computed by dividing cost of goods sold by average inventory for the period.
inventory turnover	Ratio used to measure the speed at which a company sells its inventory; computed by dividing cost of goods sold by average inventory for the period.
Investing activities	A statement of cash flow category used to disclose cash receipts and disbursements arising from an asset transaction other than one relating to the primary activities of the reporting organization.
Investing activities	A statement of cash flow category used to disclose cash receipts and disbursements arising from an asset transaction other than one relating to the primary activities of the reporting organization.
Issued	The number of shares of a corporation that have been sold or conveyed to owners.
Issued	The number of shares of a corporation that have been sold or conveyed to owners.
land improvements	Assets attached to land with a finite life, such as a parking lot or sidewalk.
land improvements	Assets attached to land with a finite life, such as a parking lot or sidewalk.
lessee	A party that pays cash for the use of an asset in a lease contract.
lessee	A party that pays cash for the use of an asset in a lease contract.
lessor	A party that receives cash for granting use of owned property in a lease contract.
lessor	A party that receives cash for granting use of owned property in a lease contract.
liabilities	Future sacrifices of economic benefits arising from present obligations; the debts of an organization.
liabilities	Future sacrifices of economic benefits arising from present obligations; the debts of an organization.
LIFO	Inventory cost flow assumption based on the most recent costs being transferred first from inventory to cost of goods sold so that the oldest costs remain in ending inventory.
LIFO	Inventory cost flow assumption based on the most recent costs being transferred first from inventory to cost of goods sold so that the oldest costs remain in ending inventory.
LIFO conformity rule	A United States income tax rule that requires LIFO to be used for financial reporting purposes if it is adopted for taxation purposes.
LIFO conformity rule	A United States income tax rule that requires LIFO to be used for financial reporting purposes if it is adopted for taxation purposes.
LIFO liquidation	A decrease in the quantity of inventory on hand when LIFO is applied so that costs incurred in a previous period are mismatched with revenues of the current period; if inflation has occurred, it can cause a significant increase in reported net income.
LIFO liquidation	A decrease in the quantity of inventory on hand when LIFO is applied so that costs incurred in a previous period are mismatched with revenues of the current period; if inflation has occurred, it can cause a significant increase in reported net income.
limited liability	A legal characteristic associated with the ownership of a corporation whereby the maximum amount that can be lost is the owner’s capital investment; an attribute of the capital stock of a corporation that does not similarly exist with proprietorships or partnerships.
limited liability	A legal characteristic associated with the ownership of a corporation whereby the maximum amount that can be lost is the owner’s capital investment; an attribute of the capital stock of a corporation that does not similarly exist with proprietorships or partnerships.
loss contingency	A potential loss resulting from a past event that must be recognized on an entity’s financial statements if it is deemed probable and the amount involved can be reasonably estimated.
loss contingency	A potential loss resulting from a past event that must be recognized on an entity’s financial statements if it is deemed probable and the amount involved can be reasonably estimated.
lower-of-cost-or-market	Conservative approach to inventory valuation used when merchandise values have decreased; a reduction in the asset is recorded to reflect the decline in value if it falls below cost.
lower-of-cost-or-market	Conservative approach to inventory valuation used when merchandise values have decreased; a reduction in the asset is recorded to reflect the decline in value if it falls below cost.
market capitalization	Computed by multiplying a company’s current stock price times the number of ownership shares outstanding in the hands of the public; it is used to gauge the fair value of a business taken as a whole.
market capitalization	Computed by multiplying a company’s current stock price times the number of ownership shares outstanding in the hands of the public; it is used to gauge the fair value of a business taken as a whole.
markup	Difference between sales price and cost of goods sold on an item of inventory; also called gross profit or gross margin.
markup	Difference between sales price and cost of goods sold on an item of inventory; also called gross profit or gross margin.
matching principle	The portion of accrual accounting that guides the timing of expense recognition; it states that expense is properly recognized in the same time period as the revenue that it helped generate.
matching principle	The portion of accrual accounting that guides the timing of expense recognition; it states that expense is properly recognized in the same time period as the revenue that it helped generate.
misstatements	An error or fraud that causes financial information to differ from U.S. generally accepted accounting principles.
misstatements	An error or fraud that causes financial information to differ from U.S. generally accepted accounting principles.
monetary assets and liabilities	Amounts currently held by an organization as cash in addition to amounts that will provide future receipts or payments of a specified amount of cash.
monetary assets and liabilities	Amounts currently held by an organization as cash in addition to amounts that will provide future receipts or payments of a specified amount of cash.
NASDAQ (National Association of Securities Dealers Automated Quotation Service)	An electronic market that allows for the trading of equity securities in approximately 4,000 companies, providing instantaneous price quotations to efficiently match buyers and sellers allowing ownership in companies to change hands.
NASDAQ (National Association of Securities Dealers Automated Quotation Service)	An electronic market that allows for the trading of equity securities in approximately 4,000 companies, providing instantaneous price quotations to efficiently match buyers and sellers allowing ownership in companies to change hands.
net realizable value	The amount of cash that is expected to be generated by an asset after costs necessary to obtain the cash are removed; as related to accounts receivable, the amount an organization estimates it will ultimately collect from its customers.
net realizable value	The amount of cash that is expected to be generated by an asset after costs necessary to obtain the cash are removed; as related to accounts receivable, the amount an organization estimates it will ultimately collect from its customers.
net sales	Sales less sales returns and discounts.
net sales	Sales less sales returns and discounts.
New York Stock Exchange	Organized stock market that efficiently matches buyers and sellers of capital stock at a mutually agreed-upon price allowing ownership in companies to change hands easily.
New York Stock Exchange	Organized stock market that efficiently matches buyers and sellers of capital stock at a mutually agreed-upon price allowing ownership in companies to change hands easily.
noncurrent liabilities	Debts that will not be satisfied within one year from the date of a balance sheet.
noncurrent liabilities	Debts that will not be satisfied within one year from the date of a balance sheet.
number of days inventory is held	Measures the average number of days that a company takes to sell its inventory items; computed by dividing average inventory for the period by the cost of inventory sold per day.
number of days inventory is held	Measures the average number of days that a company takes to sell its inventory items; computed by dividing average inventory for the period by the cost of inventory sold per day.
off-balance sheet financing	Description used when an entity is obligated for an amount of money that is larger than the amount reported on its balance sheet; for a lessee, an operating lease provides a common example of off-balance sheet financing.
off-balance sheet financing	Description used when an entity is obligated for an amount of money that is larger than the amount reported on its balance sheet; for a lessee, an operating lease provides a common example of off-balance sheet financing.
Operating activities	A statement of cash flow category used to disclose cash receipts and disbursements arising from the primary activities of the reporting organization.
Operating activities	A statement of cash flow category used to disclose cash receipts and disbursements arising from the primary activities of the reporting organization.
other accumulated comprehensive income	A section of the stockholders’ equity of the balance sheet where unrealized gains and losses on available-for-sale securities (as well as a few other specified gains and losses) are shown rather than being included within net income.
other accumulated comprehensive income	A section of the stockholders’ equity of the balance sheet where unrealized gains and losses on available-for-sale securities (as well as a few other specified gains and losses) are shown rather than being included within net income.
Outstanding	The number of shares of a corporation that are currently in the hands of the public; it is the shares that have been issued since operations first began less any treasury shares repurchased and still held by the corporation.
Outstanding	The number of shares of a corporation that are currently in the hands of the public; it is the shares that have been issued since operations first began less any treasury shares repurchased and still held by the corporation.
Par value	A number printed on a stock certificate to indicate the minimum amount of money owners must legally leave in the business; generally set at a low amount to avoid legal complications.
Par value	A number printed on a stock certificate to indicate the minimum amount of money owners must legally leave in the business; generally set at a low amount to avoid legal complications.
partnership	A business created, owned, and operated by more than one individual; business is not legally separate from its owners through incorporation.
partnership	A business created, owned, and operated by more than one individual; business is not legally separate from its owners through incorporation.
Percentage of sales method	The income statement approach for estimating uncollectible accounts that computes bad debt expense by multiplying credit sales by the percentage that are not expected to be collected.
Percentage of sales method	The income statement approach for estimating uncollectible accounts that computes bad debt expense by multiplying credit sales by the percentage that are not expected to be collected.
periodic inventory system	Accounting system that does not maintain an ongoing record of all inventory items; instead, ending inventory is determined by a physical count so that a formula (beginning inventory plus purchases less ending inventory) can be used to determine cost of goods sold.
periodic inventory system	Accounting system that does not maintain an ongoing record of all inventory items; instead, ending inventory is determined by a physical count so that a formula (beginning inventory plus purchases less ending inventory) can be used to determine cost of goods sold.
periodic inventory system	Accounting system that does not maintain an ongoing record of all inventory items; instead, ending inventory is determined by a physical count so that a formula (beginning inventory plus purchases less ending inventory) can be used to determine cost of goods sold.
periodic inventory system	Accounting system that does not maintain an ongoing record of all inventory items; instead, ending inventory is determined by a physical count so that a formula (beginning inventory plus purchases less ending inventory) can be used to determine cost of goods sold.
Periodic inventory system	Accounting system that does not maintain an ongoing record of all inventory items; instead, ending inventory is determined by a physical count so that a formula (beginning inventory plus purchases less ending inventory) can be used to determine cost of goods sold.
Periodic inventory system	Accounting system that does not maintain an ongoing record of all inventory items; instead, ending inventory is determined by a physical count so that a formula (beginning inventory plus purchases less ending inventory) can be used to determine cost of goods sold.
perpetual inventory system	Accounting system that maintains an ongoing record of all inventory items; records increases and decreases in inventory accounts as they occur as well as the cost of goods sold to date.
perpetual inventory system	Accounting system that maintains an ongoing record of all inventory items; records increases and decreases in inventory accounts as they occur as well as the cost of goods sold to date.
physical inventory	A count of the inventory on hand; necessary for reporting purposes when using a periodic system but also required for a perpetual system to ensure the accuracy of the records.
physical inventory	A count of the inventory on hand; necessary for reporting purposes when using a periodic system but also required for a perpetual system to ensure the accuracy of the records.
postretirement benefits	Promises such as pension payments, health care insurance coverage, and life insurance benefits made by employers to eligible employees to be received after they reach a specified retirement age.
postretirement benefits	Promises such as pension payments, health care insurance coverage, and life insurance benefits made by employers to eligible employees to be received after they reach a specified retirement age.
preferred stock	A capital stock issued by some companies that has one or more specified preferences over common shareholders, usually in the form of cash dividends.
preferred stock	A capital stock issued by some companies that has one or more specified preferences over common shareholders, usually in the form of cash dividends.
prepaid expenses	Assets that are created when an expense is paid in advance; normally recorded as an asset initially and then gradually reassigned to expense over time through adjusting entries.
prepaid expenses	Assets that are created when an expense is paid in advance; normally recorded as an asset initially and then gradually reassigned to expense over time through adjusting entries.
present value	The value of future cash flows with all future interest computed at a reasonable rate and then removed; the remainder is literally the present value of those future cash flows.
present value	The value of future cash flows with all future interest computed at a reasonable rate and then removed; the remainder is literally the present value of those future cash flows.
presents fairly	Financial information that contains no material misstatements in accordance with U.S. generally accepted accounting principles (U.S. GAAP).
presents fairly	Financial information that contains no material misstatements in accordance with U.S. generally accepted accounting principles (U.S. GAAP).
price-earnings ratio (P/E ratio)	A ratio computed by dividing current market price of an entity’s stock by the latest earnings per share; it is used to help predict future stock prices based on anticipated EPS figures.
price-earnings ratio (P/E ratio)	A ratio computed by dividing current market price of an entity’s stock by the latest earnings per share; it is used to help predict future stock prices based on anticipated EPS figures.
principle of conservatism	Preference of accountants to avoid making an organization look overly good; when faced with multiple reporting options that are equally likely, the worse possible outcome is reported to help protect the decision maker from being too optimistic.
principle of conservatism	Preference of accountants to avoid making an organization look overly good; when faced with multiple reporting options that are equally likely, the worse possible outcome is reported to help protect the decision maker from being too optimistic.
receivables turnover	Formula measuring speed of an organization’s collections of its accounts receivable; calculated by dividing sales by the average accounts receivable balance for the period.
receivables turnover	Formula measuring speed of an organization’s collections of its accounts receivable; calculated by dividing sales by the average accounts receivable balance for the period.
recoverability test	A test used to determine whether the value of a long-lived asset has been impaired; if expected future cash flows are less than present book value, a fair value test is performed to determine the amount of impairment.
recoverability test	A test used to determine whether the value of a long-lived asset has been impaired; if expected future cash flows are less than present book value, a fair value test is performed to determine the amount of impairment.
Retained earnings	Accumulated total of the net income earned by an organization during its existence in excess of dividends distributed to the owners; indicates the amount of the net assets currently held that came from operations over the life of the organization.
Retained earnings	Accumulated total of the net income earned by an organization during its existence in excess of dividends distributed to the owners; indicates the amount of the net assets currently held that came from operations over the life of the organization.
return on assets	A ratio used to measure the profitable use of assets, it is computed by dividing net income by average total assets for the period.
return on assets	A ratio used to measure the profitable use of assets, it is computed by dividing net income by average total assets for the period.
return on equity (ROE)	Ratio computed to measure the profitable use of a business’s resources; it is determined by dividing net income by average shareholders’ equity for the period.
return on equity (ROE)	Ratio computed to measure the profitable use of a business’s resources; it is determined by dividing net income by average shareholders’ equity for the period.
Sarbanes-Oxley Act of 2002	Federal securities law passed by the U.S. Congress in response to the Enron, WorldCom, and other major accounting scandals; it brought about many changes in the audit process and in the relationship between the client and the independent auditor.
Sarbanes-Oxley Act of 2002	Federal securities law passed by the U.S. Congress in response to the Enron, WorldCom, and other major accounting scandals; it brought about many changes in the audit process and in the relationship between the client and the independent auditor.
Securities and Exchange Commission (SEC)	Federal government agency holding legal responsibility over the reporting made by companies that issue securities that are publicly traded in the United States; works to ensure that this reporting process works as intended by the government; has opted to leave development of authoritative accounting principles to FASB.
Securities and Exchange Commission (SEC)	Federal government agency holding legal responsibility over the reporting made by companies that issue securities that are publicly traded in the United States; works to ensure that this reporting process works as intended by the government; has opted to leave development of authoritative accounting principles to FASB.
serial debts	A type of debt instrument where a set amount is paid each period to cover both interest and a portion of the maturity value; home mortgages and automobile loans are common examples.
serial debts	A type of debt instrument where a set amount is paid each period to cover both interest and a portion of the maturity value; home mortgages and automobile loans are common examples.
specific identification	Inventory cost flow method in which a company physically identifies both its remaining inventory and the inventory that was sold to customers.
specific identification	Inventory cost flow method in which a company physically identifies both its remaining inventory and the inventory that was sold to customers.
stated interest rate	Rate established in a debt contract to be paid by the debtor usually at specified time intervals; it is also called cash rate, contract rate or coupon rate.
stated interest rate	Rate established in a debt contract to be paid by the debtor usually at specified time intervals; it is also called cash rate, contract rate or coupon rate.
Statement of cash flows	A listing of all cash inflows (sources) and cash outflows (uses) during a specific period of time categorized as operating activities, investing activities, and financing activities.
Statement of cash flows	A listing of all cash inflows (sources) and cash outflows (uses) during a specific period of time categorized as operating activities, investing activities, and financing activities.
stock dividend	A dividend distributed to shareholders by issuing additional shares of stock rather than cash; it increases the number of shares outstanding but each ownership percentage stays the same; as with a stock split, it reduces the price of the stock in hopes of stimulating market interest.
stock dividend	A dividend distributed to shareholders by issuing additional shares of stock rather than cash; it increases the number of shares outstanding but each ownership percentage stays the same; as with a stock split, it reduces the price of the stock in hopes of stimulating market interest.
stock split	A division of each share of outstanding stock to increase the number of those shares; it is a method of reducing the market price of the stock; the process is carried out in hopes that a lower price will generate more market activity in the stock and, therefore, a faster rise in price.
stock split	A division of each share of outstanding stock to increase the number of those shares; it is a method of reducing the market price of the stock; the process is carried out in hopes that a lower price will generate more market activity in the stock and, therefore, a faster rise in price.
Straight-line depreciation	Method used to calculate the annual amount of depreciation expense by subtracting any estimated residual value from cost and then dividing this depreciable base by the asset’s estimated useful life; a majority of companies in the United States use this method for financial reporting purposes.
Straight-line depreciation	Method used to calculate the annual amount of depreciation expense by subtracting any estimated residual value from cost and then dividing this depreciable base by the asset’s estimated useful life; a majority of companies in the United States use this method for financial reporting purposes.
subsidiary ledger	Group of individual accounts whose sum totals (and, therefore, explains) a general ledger account balance.
subsidiary ledger	Group of individual accounts whose sum totals (and, therefore, explains) a general ledger account balance.
temporary tax difference	An amount reported as either a revenue or an expense for both financial accounting and income tax purposes but in two different time periods; leads to the recognition of deferred income taxes.
temporary tax difference	An amount reported as either a revenue or an expense for both financial accounting and income tax purposes but in two different time periods; leads to the recognition of deferred income taxes.
term notes or term bonds	A type of debt instrument where interest is paid at regular time intervals with the entire maturity value due at the end of the contract period.
term notes or term bonds	A type of debt instrument where interest is paid at regular time intervals with the entire maturity value due at the end of the contract period.
times interest earned (TIE)	A measure of a company’s ability to meet its obligations as they come due; it is computed by taking EBIT (earnings before interest expense and income taxes) and dividing that number by interest expense for the period.
times interest earned (TIE)	A measure of a company’s ability to meet its obligations as they come due; it is computed by taking EBIT (earnings before interest expense and income taxes) and dividing that number by interest expense for the period.
Total asset turnover	A ratio used to measure the efficient use of assets; it is computed by dividing sales revenue by average total assets for the period.
Total asset turnover	A ratio used to measure the efficient use of assets; it is computed by dividing sales revenue by average total assets for the period.
trading securities	Classification of investments in stocks and bonds when management’s intentions are to buy and sell them quickly in the near term; they are reported on the balance sheet at fair value with all changes in value affecting net income.
trading securities	Classification of investments in stocks and bonds when management’s intentions are to buy and sell them quickly in the near term; they are reported on the balance sheet at fair value with all changes in value affecting net income.
transactions	Events that have a financial impact on an organization that must be gathered, sorted, classified and turned into financial statements by means of an accounting system.
transactions	Events that have a financial impact on an organization that must be gathered, sorted, classified and turned into financial statements by means of an accounting system.
treasury stock	Issued shares of a corporation’s own stock that have been reacquired; balance is shown within stockholders’ equity section of the balance sheet as a negative amount unless the shares are retired (removed from existence).
treasury stock	Issued shares of a corporation’s own stock that have been reacquired; balance is shown within stockholders’ equity section of the balance sheet as a negative amount unless the shares are retired (removed from existence).
trial balance	List of account balances as shown at a point in time for each of the T-accounts maintained in the company’s ledger; eventually, financial statements are created using these balances.
trial balance	List of account balances as shown at a point in time for each of the T-accounts maintained in the company’s ledger; eventually, financial statements are created using these balances.
units-of-production method (UOP)	A method of determining depreciation that is not based on the passage of time but rather on the level of actual usage during the period.
units-of-production method (UOP)	A method of determining depreciation that is not based on the passage of time but rather on the level of actual usage during the period.
unqualified opinion	An audit opinion informing the reader that attached financial statements are presented fairly, in all material respects, in accordance with U.S. GAAP; thus, the auditor is providing reasonable assurance that the statements contain no material misstatements according to U.S. GAAP and can be relied on by the reader in making financial decisions.
unqualified opinion	An audit opinion informing the reader that attached financial statements are presented fairly, in all material respects, in accordance with U.S. GAAP; thus, the auditor is providing reasonable assurance that the statements contain no material misstatements according to U.S. GAAP and can be relied on by the reader in making financial decisions.
unrealized	A gain or loss created by an increase or decrease in the value of an asset although not yet finalized by a sale.
unrealized	A gain or loss created by an increase or decrease in the value of an asset although not yet finalized by a sale.
working capital	Formula measuring an organization’s liquidity (the ability to pay debts as they come due); calculated by subtracting current liabilities from current assets.
working capital	Formula measuring an organization’s liquidity (the ability to pay debts as they come due); calculated by subtracting current liabilities from current assets.
working capital	Formula measuring an organization’s liquidity (the ability to pay debts as they come due); calculated by subtracting current liabilities from current assets.
working capital	Formula measuring an organization’s liquidity (the ability to pay debts as they come due); calculated by subtracting current liabilities from current assets.
zero-coupon bond	Bonds that include no interest payments although the entire maturity value is due at the end of a specified time; these debts are issued at a discount so that the difference between the cash paid at the beginning and the cash received on the maturity date represents interest over that time period.
zero-coupon bond	Bonds that include no interest payments although the entire maturity value is due at the end of a specified time; these debts are issued at a discount so that the difference between the cash paid at the beginning and the cash received on the maturity date represents interest over that time period.

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