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Abatement -- complete removal of an amount due, (usually referring to a tax abatement a penalty abatement or an interest abatement within a governing agency.)

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Accelerated Depreciation - Method that records greater DEPRECIATION than STRAIGHT-LINE DEPRECIATION in the early years and less depreciation than straight-line in the later years of an ASSET'S holding period.

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Account record of financial transactions for an asset or individual, such as at a bank, brokerage, credit card company, or retail store. More generally, an arrangement between a buyer and a seller in which payments are to be made in the future.

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Accountable Plan - An accountable plan is any reimbursement or other expense allowance arrangement of an employer that meets all of the following requirements (therefore excluding it from gross w-2 earned income and tax): (1) it provides reimbursements advances or allowances including per diem and meals, to employees for any job related deductible business expense; (2) employees must be able to substantiate expenses covered in the plan; (3) employee must return any excess advances or payments.

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Accountant-Person skilled in the recording and reporting of financial transactions. (See CERTIFIED PUBLIC ACCOUNTANT.)

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Accounting - Recording and reporting of financial transactions, including the origination of the transaction, its recognition, processing, and summarization in the FINANCIAL STATEMENTS.

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Accounting cycle - The procedures for analyzing, recording, classifying, summarizing, and reporting the transactions of a business.

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Accounting Equation -The accounting equation is assets=liabilities+capital. This equation is the basis of a balance sheet and double-entry accounting.

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Accountants' Report - Formal document that communicates an independent accountant's: (1) expression of limited assurance on FINANCIAL STATEMENTS as a result of performing inquiry and analytic procedures (Review Report); (2) results of procedures performed (Agreed-Upon Procedures Report); (3) non-expression of opinion or any form of assurance on a presentation in the form of financial statements information that is the representation of management (Compilation Report); or (4) an opinion on an assertion made by management in accordance with the Statements on Standards for Attestation Engagements (Attestation Report). An accountants' report does not result from the performance of an AUDIT. (See AUDITORS' REPORT)

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Accounting School--Virtually all universities and colleges offer accounting classes. These accounting courses cover topics related to providing financial management services for large corporations, and don?t spend much time, if any, in small business concerns. Today, many universities offer online accounting courses to cater to the busy schedules of individuals. Learning accounting online provides similar training in a more casual, self-paced environment. Universal Accounting Center has accounting courses that provide a distance learning opportunity in a short time-frame

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Accounting system - The set of manual and computerized procedures and controls that provide for identifying relevant transactions or events; preparing accurate source documents, entering data into the accounting records accurately, processing transactions accurately, updating master files properly, and generating accurate documents and reports.

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Accounting Training--Training in setting up a financial tracking system, monitoring the data-entry process for financial transactions, and the interpretation of financial statements for management. Accounting training must include instruction in General Ledger and financial statement format. Accounting courses are available from Universal Accounting Center on a distance learning basis, or through attending accounting classes at one of Universal?s accounting schools. Common misspellings and abbreviations of Accounting and Accountant are: acounting, accouting, accountin, accoutant, acct, actng, acctnt

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Accounts Payable - A current liability representing the amount owed by a business to a creditor for the merchandise or services purchased on open account (i.e., without the giving of a note or other evidence of debt). It is also called ?A/P? or just ?Payables?. Accounts Payable are the current bills a business owes to suppliers.

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Accounts Receivable - Money owed a business enterprise for merchandise bought on open account. It is also called "A/R" or just "Receivables".

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Accounts Receivable - the amounts owed to a company by its customers and/or employees.

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Account receivable turnover - A measure used to determine a company's average collection period for receivables; computed by dividing net sales (or net credit sales) by average accounts receivable.

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Accrual Basis - The practice of record keeping by which income is recorded when earned and expenses are recorded when incurred, even though the cash may not be received or paid out until later.

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Accrual Basis Of Accounting - Accrual basis of accounting is based upon generally accepted accounting principles. It recognizes income when it is earned and not when it the cash received and recognizes expenses when they are owed and not when you pay them. Accrual basis of accounting includes Accounts Receivable, Accounts Payable, and Inventory. The practice of record keeping by which income is recorded when earned and expenses are recorded when incurred, even though the cash may not be received or paid out until later.

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Accrued Expenses - These are expenses incurred during an accounting period for which payment has not been made. Accrued Income: Income earned during a fiscal period but not actually received during that fiscal period.

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Accrued Liability - These are liabilities which have occurred, but have not been paid during an accounting period. Examples would include accrued wages payable, accrued sales tax payable, and accrued rent payable.

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Accrued Liability Expenses - Expenses incurred during a fiscal period but not paid by the end of that fiscal period.

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Accumulated Depreciation - Total DEPRECIATION pertaining to an ASSET or group of assets from the time the assets were placed in services until the date of the FINANCIAL STATEMENT or tax return. This total is the CONTRA ACCOUNT to the related asset account.

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Acid-test ratio (or quick ratio) - A measure of a firm's ability to meet current liabilities; more restrictive than the current ratio, it is computed by dividing net quick assets (all current assets, except inventories and prepaid expenses) by current liabilities.

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Additional Paid in Capital - Amounts paid for stock in excess of its PAR VALUE or STATED VALUE. Also, other amounts paid by stockholders and charged to EQUITY ACCOUNTS other than CAPITAL STOCK.

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Adjusted Basis - After a taxpayer's basis in property is determined, it must be adjusted upward to include any additions of capital to the property and reduced by any returns of capital to the taxpayer. Additions might include improvements to the property and subtractions may include depreciation or depletion. A taxpayer's adjusted basis in property is deducted from the amount realized to find the gain or loss on sale or disposition.

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Adjusted Gross Income - Gross income reduced by business and other specified expenses of individual taxpayers. The amount of adjusted gross income affects the extent to which medical expenses, non business casualty and theft losses and charitable contributions may be deductible. It is also an important figure in the basis of many other individual planning issues as well as a key line item on the IRS form 1040 and required state forms

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Adjusted Sales Price - Selling price minus expenses of sale, minus fix-up expenses. Adjusting Entries: Adjusting entries are special entries that are made prior to closing the books for the accounting period. An example of an adjusting entry would be adjusting payroll taxes to actual based upon supporting documentation.

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Adjusting Journal Entry - An accounting entry made into a subsidiary ledger called the General journal to account for a periods changes, omissions or other financial data required to be reported "in the books" but not usually posted to the journals used for typical period transactions (the cash receipts journal, cash disbursements journal, the payroll journal, sales journal and so on) the entry is posted to the general ledger accounts directly and usually will be numbered itself, dated and have an explanation. Example: AJE# 1 12-31-2003, debit Cash in bank $1,000. Credit interest income $1,000, to record interest income on business bank account at year end, not recorded in cash receipts journal but credited by the bank. (Cross-reference bank reconciliation and account where it was found)

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Adverse Opinion - Expression of an opinion in an AUDITORS' REPORT which states that FINANCIAL STATEMENTS do not fairly present the financial position, results of operations and cash flows in conformity with GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP). The auditor will issue an adverse opinion when there is an existence of a material weakness on the effectiveness of internal control over financial reporting.

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Aging Accounts Receivable - Grouping customer accounts according to due dates. Aging Report: An aging report is a list of customers' accounts receivable amounts by age. The report is usually divided into columns of 30-day increments such as 0-30, 31-60, 61-90, 91-120, and 120+. It alerts management to any slow paying customers.

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Allowance For Bad Debts - It is also called Allowance for Doubtful Accounts. It is an estimate of uncollectible customer accounts. It is called a "contra" account because it is listed with the current assets on the balance sheet although it is a credit balance account. The account balance is determined through use of the Historical Method or Over 90 Days Past Due Method.

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Allowance (Reserve) For Depreciation - The allowance for depreciation is the accumulation of amounts charged to expense to write off the cost of a fixed asset over its estimated useful life. The allowance account does not necessarily measure the decline in value of the related asset nor does it represent a specific fund of cash or other assets set aside to replace the related asset.

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Allowance for noncollectible accounts - A contra account, deducted from Accounts Receivable, that shows the estimated losses from uncollectible accounts.

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Allowance method - The recording of estimated losses due to uncollectible accounts as expenses during the period in which the sales occurred.

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American Institute of Certified Public Accountants (AICPA) - The letters AICPA are the acronym for the American Institute of Certified Public Accountants. Most certified public accountants in private practice are members of the AICPA.

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Amortization - The gradual reduction of a debt by means of equal periodic payments sufficient to meet current interest and liquidate the debt at maturity. When the debt involves real property, often the periodic payments include a sum sufficient to pay taxes and hazard insurance on the property.

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Amortization Expense - Amortization expense is that portion of an intangible asset that is being written off for the year. For example, if goodwill has a fifteen-year life with a value of $60,000, the amortization expense on the straight-line method would be $4,000 ($60,000 divided by 15 years.)

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Amount Realized - The selling price minus the selling expenses. Annuity Series of payments, usually payable at specified time intervals

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Analytical Procedures - Substantive tests of financial information which examine relationships among data as a means of obtaining evidence. Such procedures include: (1) comparison of financial information with information of comparable prior periods; (2) comparison of financial information with anticipated results (e.g., forecasts); (3) study of relationships between elements of financial information that should conform to predictable patterns based on the entity's experience; (4) comparison of financial information with industry norms.

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Annual report - A document that summarizes the results of operations and financial status of a company for the past year and outlines plans for the future.

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Annuity - Series of payments, usually payable at specified time intervals.

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Anti-dilution - Condition that may increase the computation of EARNINGS PER SHARE (EPS) or decrease loss per share solely because of the inclusion of COMMON STOCK equivalents, such as STOCK OPTIONS, WARRANTS, convertible DEBT or convertible PREFERRED STOCK, nomination or selection of the independent AUDITORs.

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Assembly of Financial Statements - The providing of various accounting or data-processing services by an accountant, the output of which is in the form of financial statements ostensibly to be used solely for internal management purposes.

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Assertion - Explicit or implicit representations by an entity's management that are embodied in financial statement components and for which the AUDITOR obtains and evaluates evidential matter when forming his or her opinion on the entity's financial statements.
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Assets - Anything owned by an individual or a business, which has commercial or exchange value. Assets may consist of specific property or claims against others, in contrast to obligations due others. Assets are things of value held (usually owned) by the business. Assets are balance sheet accounts. Examples are cash, accounts receivable, inventory, and fixed assets.

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Asset turnover ratio - An overall measure of how effectively assets are used during a period; computed by dividing net sales by average total assets.

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Auditor - Person who AUDITS financial accounts and records kept by others. Includes both public accounting firms registered with the PCAOB and associated persons thereof.

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Average Daily Balance - The average amount of money that a customer keeps on deposit. It is determined by adding the daily balances of an account for a given length of time, and dividing the total by the number of days covered.

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Average Inventory - The approximate amount of merchandise on hand during a certain period.