Research Guides: Accounting Resources: Accounting Glossary

Accounting Glossary

Accounting Glossary
TERM	DEFINITION
Accounting Information System This link opens in a new window	A structure that a business uses to collect, store, manage, process, retrieve, and report its financial data.
Accounting Methods This link opens in a new window	The rules a company follows in reporting revenues and expenses. The two primary methods of accounting are accrual accounting (generally used by companies) and cash accounting (generally used by individuals).
Accounting Principles This link opens in a new window	Standards of accuracy and probity that apply to those carrying out accounting procedures.
Anomalies in Financial Data	Outliers in a set of financial data.
Anomaly	Something that deviates from what is standard, normal, or expected.
Audit Sampling This link opens in a new window	The application of an audit procedure to less than 100% of the items within an account balance or class of transactions for the purpose of evaluating some characteristic of the balance or class.
Basic Visualizations	Charts, graphs, and other similar types of visual representations of data.
Common-Size Financial Statements	Statements in which all the elements are expressed as percentages of the total. Such statements are often used for making performance comparisons between companies.
Consolidated Financial Statements This link opens in a new window	The financial statements of a group of entities that are presented as being those of a single economic entity. These statements are useful for reviewing the financial position and results of an entire group of commonly owned businesses.
Corporate Culture	The beliefs and ideas that a company has and the way in which they affect how it does business and how its employees behave.
Cost Behavior This link opens in a new window	An indicator of how a cost will change in total when there is a change in some activity.
Cost This link opens in a new window	Cash amount (or the cash equivalent) given up for an asset.
Current Assets This link opens in a new window	The assets used by a company in its ordinary work (for example, materials, finished goods, cash and monies due) and that are held for a short time only (generally less than a year).
Current Liabilities This link opens in a new window	The debts a company has to pay within its next accounting period. In a company’s annual accounts, these would be debts that must be paid within the year and are usually payments for goods or services received.
Data Life Cycle	Stages and processes data goes through in an organization from beginning (collection) to end.
Discount for Lack of Control (DLOC)	A discount for lack of control is the reduction in a company’s share value due to a shareholder’s lack of ability to exercise their control over the company.
Discount for Lack of Marketability (DLOM)	“An amount or percentage deducted from the value of an ownership interest to reflect the relative absence of marketability."
Due Diligence (Tax) This link opens in a new window	Steps a tax preparer must take when preparing a return or claim for a refund claiming the following: Earned income tax credit (EITC) Child tax credit (CTC), additional child tax credit (ACTC), credit for other dependents (ODC) American opportunity tax credit (AOTC) Head of household (HOH) filing status
Economic Indicators	Statistics which show how the country's economy is going to perform in the short or long term.
Environmental, Social and Governance (ESG)	ESG stands for environmental, social and governance and refers to aspects of an organization that investors use to determine its level of ethical consciousness. Many investors review ESG criteria when deciding on their next investment prospects because they want to invest in opportunities that reflect their personal values. Choosing companies through ESG criteria can also be a risk assessment strategy, because customers may prefer to purchase from businesses with positive ESG metrics, making those companies more appealing to investors. Investors review the connections between sustainability, social responsibility and financial success during their assessments.
Equity This link opens in a new window	An ownership interest in a business, such as stockholders’ equity or owner’s equity.
External Controls This link opens in a new window	Action taken by an outside party that impacts the governance of a business.
External Factors	External Economic Factors are those not under the control of a business, but which influence its efficiency e.g. improved communications may give access to wider markets, but pollution may increase illness in the workforce.
Fair Value This link opens in a new window	The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Financial Data Integrity	The overall accuracy, completeness, and consistency of financial data.
Financial Statement Footnotes This link opens in a new window	Explanatory and supplemental notes that accompany a firm’s financial statements. The notes vary depending on the accounting framework used to construct the financial statements (such as GAAP or IFRS). Footnotes are an integral part of the financial statements and must be issued to users along with financial statements.
Financial Statement Projection This link opens in a new window	A financial picture that management believes it can attain as of a future date.
Forensic Investigation This link opens in a new window	The application of scientific knowledge and methodology to legal problems and criminal investigations.
Fund Accounting This link opens in a new window	A system of accounting used by nonprofit entities to track the amount of cash assigned to different purposes and the usage of that cash.
General Ledger This link opens in a new window	Grouping of accounts that are used to sort and store information from a company’s business transactions.
Generally Accepted Auditing Standards (GAAS)	A set of guidelines used by auditors to conduct an audit (AICPA General Accepted Auditing Standards) (This file has all 10 standards.)
How Cash Flow Data Connects to Other Financial Statement Components	Knowing how activity in the balance sheet, income statement, and retained earnings/equity statement affect cash flow.
Internal Controls This link opens in a new window	Mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.
Internal Stakeholders	Individuals or groups within an organization (employees, owners, shareholders, managers, and so on
Leadership in Energy and Environmental Design (LEED)	The LEED (Leadership in Energy and Environmental Design) Green Building Rating System is a voluntary, consensus-based national standard for developing high-performance, sustainable buildings. Members of the US Green Building Council, representing all segments of the building industry, developed LEED and contribute to its improvement. LEED standards are currently available for new construction and major renovation projects. LEED was created to: · Establish a common standard defining a ‘green building’ · Promote integrated, whole-building design practices · Recognize environmental leadership in the building industry · Stimulate green competition · Raise consumer awareness of green building benefits. LEED provides a framework for assessing building performance and meeting sustainability goals. Based on well-founded scientific standards, LEED emphasizes state of the art strategies for sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality.
Long-Term Liabilities This link opens in a new window	Obligations resulting from a previous event that are not due within one year of the date of the balance sheet (or not due within the company’s operating cycle if it is longer than one year). Long-term liabilities are also known as noncurrent liabilities.
Macroeconomics	Study of the economics of a whole area, a whole industry, a whole group of the population or a whole country, in order to help in economic planning.
Macroeconomic Factor This link opens in a new window	Something that influences the structure, performance, behavior, and decision making of the whole, or aggregate, economy.
Microeconomics	The study of the economics of people or single companies.
Microeconomic Factor This link opens in a new window	Something that influences the decisions of individuals and firms to allocate resources of production, exchange, and consumption.
Network Design This link opens in a new window	The planning of the implementation of a computer network infrastructure.
Nontaxable Income This link opens in a new window	Income that is not subject to taxes.
Occupational Fraud This link opens in a new window	When an employee, manager, or executive of an organization deceives the organization itself.
Profitability	The ability to yield profit.
Risk Assessment (audit) This link opens in a new window	The auditor’s assessment of the risks of material misstatement in a financial statement audit.
Statement of Cash Flows This link opens in a new window	One of the financial statements issued by a business, and describes the cash flows into and out of the organization.
Tax Avoidance This link opens in a new window	The use of legal methods to minimize the amount of income tax owed by an individual or a business.
Tax Credits This link opens in a new window	Amount of money that taxpayers can subtract directly from the taxes they owe.
Tax Deductions This link opens in a new window	An item that can be subtracted from taxable income to lower the amount of taxes owed.
Tax Evasion This link opens in a new window	The use of illegal means to avoid paying taxes.
Tax Filing Status This link opens in a new window	Determines the rate at which income is taxed. The five filing statuses are: single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent child.
Tax Liability This link opens in a new window	Payment owed by an individual, a business, or other entity to a federal, state, or local tax authority.
Tax Position This link opens in a new window	Position used to measure current or deferred income tax assets and liabilities that an entity takes in a previously filed tax return or expects to take in a future tax return. A tax position can yield a permanent reduction or deferral of income taxes payable.
Tax Return This link opens in a new window	Form or forms filed with a tax authority that report income, expenses, and other pertinent tax information.
Taxable Income This link opens in a new window	Amount of income used to calculate the taxes owed by an individual or a company.

Trade Policy	National framework of laws, regulations, decisions, practices, and negotiating positions that governments adopt to ensure that national companies have to regulate the exchange of goods and services with a specific country or bloc of countries.
Transaction This link opens in a new window	A business event that has a monetary impact on the financial statements of a business. It is recorded in the business’s accounting records.
Valuation Techniques This link opens in a new window	Tools used to summarize financial reporting data and evaluate the performance and financial position of a company.
Variances	Differences between budget to actual, actual to expected, year over year, and so on.

Dictionary of Accounting

The 4th Edition of A&C Black's Dictionary of Accounting This link opens in a new window provides over 5,000 definitions of terms used in accounting, from personal finance and investments to company accounts, balance sheets, and stock valuations.