A - Acounting Glossary
Accounting definitions.
Source: Wikipedia.org
Accounting
reform
Accounting reform is change to accounting rules
that goes beyond the enforcement of standard accounting
practices and the elimination of "creative
accounting". It is advocated by those who
consider the present standards and practices of
the profession wholly inadequate to the task of
measuring and reporting the activity, success,
and failure of modern enterprise, including government.
"Accounting", says Baruch Lev, a notable
proponent of such reform, "is about accountability".
He notes that the present regime of accounting
rules dates back about 500 years to Renaissance
Italian practices.
Accounting software
Accounting software is computer software that
records and processes accounting transactions
such as accounts payable, accounts receivable,
payroll and trial balance. It may be developed
inhouse by the company or organization using it,
may be purchased from a third party, or may be
a combination of a third-party application software
package with local modifications. It varies greatly
in its complexity and cost.
Accounts payable
Accounts payable is one of a series of accounting
transactions dealing with the paying of suppliers
to which one owes money for goods and services.
The average household performs this task by writing
checks each month to such suppliers as the electric
company, telephone company, cable TV or satellite
dish service, the local newspaper, and so on.
Accounts receivable
Accounts receivable is one of a series of accounting
transactions dealing with the billing of customers
which owe money to a person, company or organization
for goods and services that have been provided
to the customer. This is typically done in a one
person organization by writing an invoice and
mailing or delivering it to each customer.
Accrual basis accounting
Accrual-basis accounting records financial events
based on events that change your net worth (the
amount owed to you less the amount you owe others).
Standard practice is to record expenses with the
incomes they are associated with. For example,
your landlord would record an income event on
the day your rent comes due (you owe it to him).
He records an expense event when the fee owed
to the rental agent comes due for your apartment
that month (he owes it to the agent). The details
of the actual cash flows and their timing are
tracked by bookkeeping.
Amortization
Amortization is the spreading of expenses over
future time periods of an intangible balance sheet
item such as a Leasing (mortgage) or goodwill.
Annuity
In finance, an annuity is a series of fixed payments,
which might be over a fixed number of years, over
the lifetime of an individual, or both. The most
common use of annuities is to provide a pension
for people in retirement.
Asset
In business and accounting an asset is anything
owned, whether in possession or by right to take
possession, by a person or a group acting together,
e.g. a company, the value of which can be expressed
in monetary terms. Asset is listed on the balance
sheet. It has a normal balance of debit. Assets
may be classified in many ways. The principal
distinction normally made for business purposes
is between: fixed assets and current assets. Other
business subdivisions include intangible assets,
that is, those assets which, though not visible,
add to the earning power of the business, e.g.
goodwill, patents, copyrights, etc. (also called
invisible assets); liquid assets, which are a
subdivision of current assets and also categories
labelled trade investments,quoted investments,
etc.
Assurance
Assurance has been defined by the American Institute
of Certified Public Accountants (AICPA) as 'Independent
Professional Services that improve information
quality or it context'. Such services are very
broad and could include assessments of internet
security and quality of health facilities.
Audit
Audit is the examination of records and reports
of a company, in order to check that what is provided
is relevant, and closest to the reality. That
is to say, all assets and liabilities are properly
recorded in the balance sheet, and, all profits
and losses are properly assessed. This assessment
is done through 2 methods, by assessing internal
control procedures and by checking the consistency
of items in the books.
