Dictionary of
Accounting
Fourth edition
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Dictionary of
Accounting
Fourth edition
S.M.H. Collin
A & C Black 앫 London
First published in Great Britain in 1992 byPeter Collin Publishing Second edition published 2001
Third edition published 2004 This fourth edition published 2007
A & C Black Publishers Ltd 38 Soho Square, London W1D 3HB
© A & C Black Publishers Ltd 2007
All rights reserved. No part of this publication may be reproduced in any form or by any means without the permission of the publishers
A CIP record for this book is available from the British Library
eISBN-13: 978-1-4081-0228-2 Text Production and Proofreading
Heather Bateman, Stephen Curtis, Katy McAdam, Howard Sargeant This book is produced using paper that is made from wood grown in managed,
sustainable forests. It is natural, renewable and recyclable. The logging and manufacturing processes conform to the environmental regulations of the
country of origin.
Text typeset by A & C Black Printed in Spain by GraphyCems
This dictionary provides a basic vocabulary of terms used in accounting, from personal finance and investments to company accounts, balance sheets and stock valuations. It is ideal for students of accounting and for anyone who needs to check the meaning of an accountancy term, from people working in businesses who may not be professional accountants to translators or those for whom English is an additional language.
Each headword is explained in clear, straightforward English and examples are given to show how the word may be used in context. There are also quotations from newspapers and specialist magazines. Sample documents and financial statements are also provided.
Thanks are due to Hannah Gray and Sarah Williams for their invaluable help and advice during the production of this new edition.
The following symbols have been used to show the pronunciation of the main words in the dictionary.
Stress has been indicated by a main stress mark () and a secondary stress mark (). Note that these are only guides, as the stress of the word changes according to its position in the sentence.
Vowels Consonants
back b buck
ɑ harm d dead
ɒ stop ð other
ai type d jump
aυ how f fare
aiə hire gold
aυə hour h head
ɔ course j yellow
ɔi annoy k cab
e head l leave
eə fair m mix
ei make n nil
eυ go ŋ sing
word p print
i keep r rest
i happy s save
ə about ʃ shop
i fit t take
iə near tʃ change
u annual θ theft
u pool v value
υ book w work
υə tour x loch
shut measure
z zone
A
AAAAAA abbreviation American Accounting Association
AAPAAAPA abbreviation Association of Author- ised Public Accountants
AARFAARF abbreviation Australian Accounting Research Foundation
AATAAT abbreviation Association of Account- ing Technicians
abacus
abacus /bəkəs/ noun a counting device consisting of parallel rods strung with beads, still widely used for business and accounting in China and Japan
abandonment
abandonment /ə|bndənmənt/ noun an act of giving up voluntarily something that you own, such as an option or the right to a property
왍
abandonment of a claim giving up a claim in a civil actionabatement
abatement /ə|beitmənt/ noun a reduc- tion in a payment, e.g., if a company’s or individual’s total assets are insufficient to cover their debts or legacies
ABBABB abbreviation activity-based budgeting
abbreviated accounts
abbreviated accounts /ə|brivieitid ə| kaυnts/ plural noun a shortened version of a company’s annual accounts that a small or medium sized company can file with the Registrar of Companies, instead of a full version
ABCABC abbreviation activity-based costing
ab initio
ab initio /b i|niʃiəυ/ phrase a Latin phrase meaning ‘from the beginning’
ABMABM abbreviation activity-based manage- ment
abnormal gain
abnormal gain /b|nɔm(ə)l ein/ noun any reduction in the volume of process loss below that set by the normal loss allow- ance. Abnormal gains are generally costed as though they were completed products.
abnormal loss
abnormal loss /b|nɔm(ə)l lɒs/ noun any losses which exceed the normal loss allowance. Abnormal losses are generally costed as though they were completed prod- ucts.
abnormal spoilage
abnormal spoilage /b|nɔm(ə)l spɔilid/ noun spoilage that contributes to an abnormal loss
above par
above par /ə|bv pɑ/ adjective referring to a share with a market price higher than its face value
above-the-line
above-the-line /ə|bv ðə lain/ adjec- tive, adverb 1. used to describe entries in a company’s profit and loss accounts that appear above the line which separates entries showing the origin of the funds that have contributed to the profit or loss from those that relate to its distribution. Excep- tional and extraordinary items appear above the line. 쑗 Exceptional items are noted above the line in company accounts. 쒁 below-the-line 2. relating to revenue items in a government budget
abridged accounts
abridged accounts /ə|bridd ə|kaυnts/ plural noun financial statements produced by a company that fall outside the require- ments stipulated in the Companies Act
absorb
absorb /əb|zɔb/ verb 1. to take in a small item so that it forms part of a larger one
왍
a business which has been absorbed by a competitor a small business which has been made part of a larger one 2. to assign an overhead to a particular cost centre in a com- pany’s production accounts so that its iden- tity becomes lost. 쒁 absorption costingabsorbed overhead
absorbed overhead /əb|zɔbd əυvəhed/ noun an overhead attached to products or services by means of overhead absorption rates
absorption
absorption /əb|zɔpʃən/ noun the proc- ess of making a smaller business part of a larger one, so that the smaller company in effect no longer exists
absorption costing
absorption costing /əb|zɔpʃən kɒstiŋ/ noun 1. a form of costing for a product that includes both the direct costs of production and the indirect overhead costs as well 2. an accounting practice in which fixed and variable costs of production are absorbed by different cost centres. Provid- ing all the products or services can be sold at
absorption rate 2 a price that covers the allocated costs, this method ensures that both fixed and variable costs are recovered in full. 쒁 marginal cost- ing
absorption rate
absorption rate /əb|zɔpʃən reit/ noun a rate at which overhead costs are absorbed into each unit of production
abstract
abstract /bstrkt/ noun a short form of a report or document 쑗 to make an abstract of the company accounts
abusive tax shelter
abusive tax shelter /ə|bjusiv tks ʃeltə/ noun a tax shelter used illegally in order to avoid or reduce tax payments
Academy of Accounting Historians
Academy of Accounting Historians /ə|kdəmi əv ə|kaυntiŋ hi|stɔriənz/ noun a US organisation, founded in 1973, that promotes the study of the history of accounting
ACAUS
ACAUS abbreviation Association of Char- tered Accountants in the United States
ACCAACCA abbreviation Association of Char- tered Certified Accountants
accelerate
accelerate /ək|seləreit/ verb to reduce the amount of time before a maturity date
accelerated cost recovery system
accelerated cost recovery system /k|selrəreitid kɒst ri|kvəri sistəm/ noun a system used in the United States for calculating depreciation in a way that reduces tax liability
accelerated depreciation
accelerated depreciation /ək| seləreitid dipriʃi|eiʃ(ə)n/ noun a system of depreciation which reduces the value of assets at a high rate in the early years to encourage companies, as a result of tax advantages, to invest in new equipment
acceleration
acceleration /ək|selə|reiʃ(ə)n/ noun the speeding up of debt repayment
acceleration clause
acceleration clause /ək|selə|reiʃ(ə)n klɔz/ noun US a clause in a contract that provides for immediate payment of the total balance if there is a breach of contract
acceptance
acceptance /ək|septəns/ noun 1. the act of signing a bill of exchange to show that you agree to pay it
왍
to present a bill for acceptance to present a bill for payment by the person who has accepted it 2. a bill which has been accepted 3. the act of accept- ing an offer of new shares for which you have appliedacceptance credit
acceptance credit /ək|septəns kredit/ noun an arrangement of credit from a bank, where the bank accepts bills of exchange drawn on the bank by the debtor: the bank then discounts the bills and is responsible for paying them when they mature. The debtor owes the bank for the bills but these are covered by letters of credit.
acceptance sampling
acceptance sampling /ək|septəns sɑmpliŋ/ noun the process of testing a small sample of a batch to see if the whole batch is good enough to be accepted
accepting house
accepting house /ək|septiŋ haυs/, acceptance house /ək|septəns haυs/ noun a firm, usually a merchant bank, which accepts bills of exchange at a discount, in return for immediate payment to the issuer, in this case the Bank of England
Accepting Houses Committee
Accepting Houses Committee /ək| septiŋ haυziz kə|miti/ noun the main London merchant banks, which organise the lending of money with the Bank of England.
They receive slightly better discount rates from the Bank.
acceptor
acceptor /ək|septə/ noun a person who accepts a bill of exchange by signing it, thus making a commitment to pay it by a speci- fied date
accident insurance
accident insurance /ksid(ə)nt in| ʃυərəns/ noun insurance which will pay the insured person when an accident takes place
accommodation
accommodation /ə|kɒmə|deiʃ(ə)n/ noun money lent for a short time
accommodation bill
accommodation bill /ə|kɒmə|deiʃ(ə)n bil/ noun a bill of exchange where the per- son signing (the ‘drawee’) is helping another company (the ‘drawer’) to raise a loan
account
account /ə|kaυnt/ noun 1. a record of financial transactions over a period of time, such as money paid, received, borrowed or owed 쑗 Please send me your account or a detailed or an itemised account. 2. a struc- tured record of financial transactions that may be maintained as a list or in a more for- mal structured credit and debit basis 3. (in a shop) an arrangement in which a customer acquires goods and pays for them at a later date, usually the end of the month 쑗 to have an account or a credit account with Harrods 쑗 Put it on my account or charge it to my account. 쑗 They are one of our largest accounts. 4. a period during which shares are traded for credit, and at the end of which the shares bought must be paid for (NOTE: On the London Stock Exchange, there are twenty-four accounts during the year, each running usually for ten working days.) 5. a customer who does a large amount of busi- ness with a firm and has an account with it 쑗 Smith Brothers is one of our largest accounts. 쑗 Our sales people call on their best accounts twice a month.
accountability
accountability /ə|kaυntə|biliti/ noun the fact of being responsible to someone for
3 accounting concept something, e.g. the accountability of direc-
tors to the shareholders
accountable
accountable /ə|kaυntəb(ə)l/ adjective referring to a person who has to explain what has taken place or who is responsible for something (NOTE: You are accountable to someone for something.)
account analysis
account analysis /ə|kaυnt ə|nləsis/ noun analysis of a company’s accounts with the aim of discerning how its activities affect its costs
accountancy
accountancy /ə|kaυntənsi/ noun the work of an accountant 쑗 They are studying accountancy or They are accountancy stu- dents.
accountancy bodies
accountancy bodies /ə|kaυntənsi bɒdiz/ plural noun professional institu- tions and associations for accountants
accountancy profession
accountancy profession /ə|kaυntənsi prə|feʃ(ə)n/ noun the professional bodies that establish entry standards, organise pro- fessional examinations, and draw up ethical and technical guidelines for accountants
accountant
accountant /ə|kaυntənt/ noun 1. a per- son who keeps a company’s accounts or deals with an individual person’s tax affairs 쑗 The chief accountant of a manufacturing group. 쑗 The accountant has shown that there is a sharp variance in our labour costs.
2. a person who advises a company on its finances 쑗 I send all my income tax queries to my accountant. 3. a person who examines accounts
Accountants’ International Study Group
Accountants’ International Study Group /ə|kaυntənts intənʃ(ə)nəl stdi rup/ noun a body of professional accounting bodies from the United States, Canada, and the United Kingdom that was established in 1966 to research accounting practices in the three member countries.
After publishing 20 reports, it was dis- banded in 1977 with the foundation of the International Federation of Accountants.
accountant’s liability
accountant’s liability /ə|kaυntənts laiə|biliti/ noun the legal liability of an accountant who commits fraud or is held to be negligent
accountants’ opinion
accountants’ opinion /ə|kaυntənts ə| pinjən/ noun a report of the audit of a com- pany’s books, carried out by a certified pub- lic accountant (NOTE: The US term is audit opinion.)
accountants’ report
accountants’ report /ə|kaυntənts ri| pɔt/ noun in the United Kingdom, a report written by accountants that is required by the London Stock Exchange to be included in the prospectus of a company seeking a list- ing on the Exchange
account code
account code /ə|kaυnt kəυd/ noun a number assigned to a particular account in a numerical accounting system, e.g., a chart of accounts
account end
account end /ə|kaυnt end/ noun the end of an accounting period
account executive
account executive /ə|kaυnt i| zekjυtiv/ noun 1. an employee who looks after customers or who is the link between customers and the company 2. an employee of an organisation such as a bank, public relations firm or advertising agency who is responsible for looking after particular cli- ents and handling their business with the organisation
account form
account form /ə|kaυnt fɔm/ noun a bal- ance sheet laid out in horizontal form. It is the opposite of ‘report’ or ‘vertical’ form.
accounting
accounting /ə|kaυntiŋ/ noun 1. the work of recording money paid, received, bor- rowed, or owed 쑗 accounting methods 쑗 accounting procedures 쑗 an accounting machine 2. accountancy, the work of an accountant as a course of study
‘…applicants will be professionally quali- fied and have a degree in Commerce or Accounting’ [Australian Financial Review]
Accounting and Finance Association of Australia and New Zealand
Accounting and Finance Associa- tion of Australia and New Zealand /ə| kaυntiŋ ən fainns ə|səυsieiʃ(ə)n əv ɒs| treiliə ən nju zilənd/ noun an organisa- tion for accounting and finance academics, researchers and professionals working in Australia and New Zealand. Abbreviation AFAANZ
accounting bases
accounting bases /ə|kaυntiŋ beisiz/ plural noun the possible ways in which accounting concepts may be applied to financial transactions, e.g. the methods used to depreciate assets, how intangible assets or work in progress are dealt with
accounting change
accounting change /ə|kaυntiŋ tʃeind/ noun any of various changes that affect a set of accounts, e.g. a change in the method of calculating the depreciation of assets or a change in the size, structure or nature of the company
accounting concept
accounting concept /ə|kaυntiŋ kɒnsept/ noun a general assumption on which accounts are prepared. The main con- cepts are: that the business is a going con- cern, that revenue and costs are noted when they are incurred and not when cash is received or paid, that the present accounts are drawn up following the same principles as the previous accounts, that the revenue or
accounting control 4 costs are only recorded if it is certain that they will be incurred.
accounting control
accounting control /ə|kaυntiŋ kən| trəυl/ noun procedures designed to ensure that source data for accounts are accurate and proper, in order to prevent fraud
accounting conventions
accounting conventions /ə|kaυntiŋ kən|venʃ(ə)nz/ plural noun the fundamen- tal assumptions that govern the practice of accounting, e.g., consistency and prudence.
쒁 conceptual framework
accounting cycle
accounting cycle /ə|kaυntiŋ saik(ə)l/ noun the regular process of recording, ana- lysing and reporting a company’s transac- tions for a given period
accounting date
accounting date /ə|kaυntiŋ deit/ noun the date on which an accounting period ends, usually 31st December for annual accounts but it can in fact be any date
Accounting Directives
Accounting Directives /ə|kaυntiŋ dai| rektivz/ plural noun a set of EU directives issued with the aim of regulating accounting procedures in member states
accounting entity
accounting entity /ə|kaυntiŋ entəti/ noun the unit for which financial statements and accounting records are prepared, e.g., a limited company or a partnership. 쒁 report- ing entity
accounting equation
accounting equation /ə|kaυntiŋ i| kwei(ə)n/ noun the basic formula that underpins double-entry bookkeeping. It can be expressed most simply as ‘assets + expenses = liabilities + capital + revenue’
where the debit amounts to the left of the equals sign must be equivalent to the credit amounts to the right. Also called balance sheet equation
accounting error
accounting error /ə|kaυntiŋ erə/ noun any accounting inaccuracy or misrepresen- tation that is the result of error, not inten- tional fraud
accounting event
accounting event /ə|kaυntiŋ i|vent/ noun a transaction recorded in a business’s books of account
accounting fees
accounting fees /ə|kaυntiŋ fiz/ plural noun fees paid to an accountant for prepar- ing accounts, which are deductible against tax
accounting information system
accounting information system /ə| kaυntiŋ infə|meiʃ(ə)n sistəm/ noun a system, usually computer-based, that proc- esses information on a company’s transac- tions for accounting purposes
accounting manual
accounting manual /ə|kaυntiŋ mnjuəl/ noun a handbook or set of instructions that set out all procedures and responsibilities of those engaged in an entity’s accounting systems
accounting period
accounting period /ə|kaυntiŋ piəriəd/ noun a period of time at the end of which the firm’s accounts are made up
accounting policies
accounting policies /ə|kaυntiŋ pɒlisiz/ plural noun the accounting bases used by a company when preparing its finan- cial statements
accounting practice
accounting practice /ə|kaυntiŋ prktis/ noun the way in which account- ants and auditors implement accounting pol- icies
accounting principles
accounting principles /ə|kaυntiŋ prinsip(ə)lz/ plural noun standards of accuracy and probity that apply to those car- rying out accounting procedures
Accounting Principles Board
Accounting Principles Board /ə| kaυntiŋ prinsip(ə)lz bɔd/ noun the US body which issued Opinions that formed much of US Generally Accepted Account- ing Principles up to 1973 when the Financial Accounting Standards Board (FASB) took over that role. Abbreviation APB
accounting procedure
accounting procedure /ə|kaυntiŋ prə| sidə/ noun an accounting method devel- oped by an individual or organisation to deal with routine accounting tasks
accounting profits
accounting profits /ə|kaυntiŋ prɒfits/ plural noun the difference between revenue and the costs of production
accounting rate of return
accounting rate of return /ə|kaυntiŋ reit əv ri|tn/ noun a method of valuing shares in a company where the company’s estimated future profits are divided by the rate of return required by investors. Abbrevi- ation ARR
accounting records
accounting records /ə|kaυntiŋ rekɔdz/ plural noun all documents in which accounting information is recorded, used during the preparation of financial statements
accounting reference date
accounting reference date /ə|kaυntiŋ ref(ə)rəns deit/ noun the last day of a company’s accounting reference period.
Abbreviation ARD
accounting reference period
accounting reference period /ə| kaυntiŋ ref(ə)rəns piəriəd/ noun 1. the period for which a company makes up its accounts. In most, but not all, cases, the period is 12 months. 2. the period for which corporation tax is calculated
accounting software
accounting software /ə|kaυntiŋ sɒftweə/ noun computer programs used to enter and process accounts information
accounting standard
accounting standard /ə|kaυntiŋ stndəd/ noun an authoritative statement of how particular types of transaction and other events should be reflected in financial statements. Compliance with accounting
5 accumulated profit standards will normally be necessary for
financial statements to give a true and fair view. (NOTE: These principles are recom- mended by the Accounting Standards Board in the United Kingdom or by the FASB in the United States.)
Accounting Standards Board
Accounting Standards Board /ə| kaυntiŋ stndədz bɔd/ noun a commit- tee set up by British accounting institutions to monitor methods used in accounting.
Abbreviation ASB
Accounting Standards Committee
Accounting Standards Committee /ə|kaυntiŋ stndədz kə|miti/ noun a UK accounting standards issuing body whose functions were taken over by the ASB in 1990. Abbreviation ASC
accounting system
accounting system /ə|kaυntiŋ sistəm/ noun the means used by an organi- sation to produce its accounting information
accounting technician
accounting technician /ə|kaυntiŋ tek| niʃ(ə)n/ noun a person who assists in the preparation of accounts but who is not a fully qualified accountant
accounting unit
accounting unit /ə|kaυntiŋ junit/ noun any unit which takes part in financial transactions which are recorded in a set of accounts. It can be a department, a sole trader, a Plc or some other unit.
account payee
account payee /ə|kaυnt pei|i/ noun the words printed on most UK cheques indicat- ing that the cheque can only be paid into the account of the person or business to whom the cheque is written, or be cashed for a fee at an agency offering a cheque cashing serv- ice
accounts
accounts /ə|kaυnts/ plural noun detailed records of a company’s financial affairs
accounts department
accounts department /ə|kaυnts di| pɑtmənt/ noun a department in a com- pany which deals with money paid, received, borrowed, or owed
accounts manager
accounts manager /ə|kaυnts mnidə/ noun the manager of an accounts department
accounts payable
accounts payable /ə|kaυnts peiəb(ə)l/ plural noun money owed by a company
accounts receivable
accounts receivable /ə|kaυnts ri| sivəb(ə)l/ plural noun money owed to a company. Abbreviation AR
accounts receivable turnover
accounts receivable turnover /ə| kaυnts ri|sivəb(ə)l tnəυvə/ noun a statistic showing on average how long cus- tomers take to pay money they owe for goods or services received
accrete
accrete /ə|krit/ verb 1. (of a fund) to have interest added to it 2. (of assets) to grow as a result of mergers, expansion or the acqui- sition of other interests
accretion
accretion /ə|kriʃ(ə)n/ noun the process of adding interest to a fund over a period of time
accrual
accrual /ə|kruəl/ noun a gradual increase by addition
accruals
accruals /ə|kruəlz/ plural noun same as accrued liabilities
accruals basis
accruals basis /ə|kruəl beisis/, accru- als concept /ə|kruəlz kɒnsept/ noun a method of preparing accounts in which rev- enues and costs are both reported during the period to which they refer and not during the period when payments are received or made
accrue
accrue /ə|kru/ verb 1. to record a finan- cial transaction in accounts when it takes place, and not when payment is made or received 2. to increase and be due for pay- ment at a later date 쑗 Interest accrues from the beginning of the month.
accrued dividend
accrued dividend /ə|krud dividend/ noun a dividend earned since the last divi- dend was paid
accrued expense
accrued expense /ə|krud ik|spens/ noun an expense that has been incurred within a given accounting period but not yet paid
accrued income
accrued income /ə|krud inkm/ noun revenue entered in accounts, although pay- ment has not yet been received
accrued interest
accrued interest /ə|krud intrəst/ noun interest which has been earned by an inter- est-bearing investment 쑗 Accrued interest is added quarterly.
accrued liabilities
accrued liabilities /ə|krud laiə| bilitiz/ plural noun liabilities which are recorded in an accounting period, although payment has not yet been made. This refers to liabilities such as rent, electricity, etc.
Also called accruals
accrued revenue
accrued revenue /ə|krud revənju/ noun same as accrued income
accumulate
accumulate /ə|kjumjυleit/ verb to grow in quantity by being added to, or to get more of something over a period of time 쑗 We allow dividends to accumulate in the fund.
accumulated depreciation
accumulated depreciation /ə| kjumjυleitid di|priʃi|eiʃ(ə)n/ noun the total amount by which an asset has been depreciated since it was purchased
accumulated earnings tax
accumulated earnings tax /ə| kjumjυleitid niŋz tks/, accumu- lated profits tax /ə|kjumjυleitid prɒfits tks/ noun US a tax on earnings above a specified limit which are unjustifiably retained in a business to avoid paying higher personal income tax
accumulated profit
accumulated profit /ə|kjumjυleitid prɒfit/ noun a profit which is not paid as
accumulated reserves 6 dividend but is taken over into the accounts of the following year
accumulated reserves
accumulated reserves /ə| kjumjυleitid ri|zvz/ plural noun reserves which a company has put aside over a period of years
accumulation
accumulation /ə|kjumjυ|leiʃ(ə)n/ noun the process of growing larger by being added to, or of getting more and more of something
ACHACH abbreviation US Automated Clearing House
acid test
acid test /sid test/, acid test ratio noun same as liquidity ratio
acquisition
acquisition /kwi|ziʃ(ə)n/ noun the takeover of a company. The results and cash flows of the acquired company are brought into the group accounts only from the date of acquisition: the figures for the previous period for the reporting entity should not be adjusted. The difference between the fair value of the net identifiable assets acquired and the fair value of the purchase considera- tion is goodwill.
acquisition accounting
acquisition accounting /kwi| ziʃ(ə)n ə|kaυntiŋ/ noun a full consolida- tion, where the assets of a subsidiary com- pany which has been purchased are included in the parent company’s balance sheet, and the premium paid for the goodwill is written off against the year’s earnings
across-the-board
across-the-board /ə|krɒs ðə bɔd/ adjective applying to everything or everyone 쑗 an across-the-board price increase or wage increase
actact /kt/ noun a law passed by parliament which must be obeyed by the people
active
active /ktiv/ adjective involving many transactions or activities 쑗 an active demand for oil shares 쑗 an active day on the Stock Exchange 쑗 Computer shares are very active.
active account
active account /ktiv ə|kaυnt/ noun an account, such as a bank account or invest- ment account, which is used to deposit and withdraw money frequently
active partner
active partner /ktiv pɑtnə/ noun a partner who works in a company that is a partnership
activity
activity /k|tiviti/ noun something which is done, especially something which is involved in creating a product or a service
‘…preliminary indications of the level of business investment and activity during the March quarter will provide a good pic- ture of economic activity in the year’ [Aus- tralian Financial Review]
activity-based budgeting
activity-based budgeting /k|tiviti beist bditiŋ/ noun the allocation of resources to individual activities. Activity- based budgeting involves determining which activities incur costs within an organ- isation, establishing the relationships between them, and then deciding how much of the total budget should be allocated to each activity. Abbreviation ABB
activity-based costing
activity-based costing /k|tiviti beist kɒstiŋ/ noun a costing system used to assign overhead costs to specific items produced, by looking at specific cost drivers.
Abbreviation ABC. 쒁 cost driver, activity driver, resource driver
activity-based management
activity-based management /k| tiviti beist mnidmənt/ noun a sys- tem of management that uses activity-based cost information for a variety of purposes including cost reduction, cost modelling and customer profitability analysis. Abbrevia- tion ABM
activity chart
activity chart /k|tiviti tʃɑt/ noun a plan showing work which has been done, made so that it can be compared to a previ- ous plan showing how much work should be done
activity cost pool
activity cost pool /k|tiviti kɒst pul/ noun a grouping of all cost elements associ- ated with an activity
activity driver
activity driver /k|tiviti draivə/ a type of cost driver which is used to quantify the activities involved in creating a product or service
activity driver analysis
activity driver analysis /k|tiviti draivər ə|nləsis/ noun the identification and evaluation of the activity drivers used to trace the cost of activities to cost objects. It may also involve selecting activity drivers with potential to contribute to the cost man- agement function with particular reference to cost reduction.
act of God
act of God /kt əv ɒd/ noun some- thing you do not expect to happen and which cannot be avoided, e.g. a storm or a flood (NOTE: Acts of God are not usually covered by insurance policies.)
actual
actual /ktʃuəl/ adjective real or correct 쑗 What is the actual cost of one unit? 쑗 The actual figures for directors’ expenses are not shown to the shareholders.
actual cash value
actual cash value /ktʃuəl kʃ vlju/ noun the amount of money, less depreciation, that it would cost to replace something damaged beyond repair with a comparable item
actual cost
actual cost /ktʃuəl kɒst/ noun the total cost of producing or buying an item, which
7 adjustable may include, e.g., its price plus the cost of
delivery or storage
actual price
actual price /ktʃuəl prais/ noun a price for a commodity which is for immedi- ate delivery
actuals
actuals /ktʃuəlz/ plural noun real fig- ures 쑗 These figures are the actuals for last year.
actuarial
actuarial /ktʃu|eəriəl/ adjective calcu- lated by an actuary 쑗 The premiums are worked out according to actuarial calcula- tions.
actuarial tables
actuarial tables /ktʃueəriəl teib(ə)lz/ plural noun lists showing how long people are likely to live, used to calcu- late life assurance premiums and annuities
actuary
actuary /ktʃuəri/ noun a person employed by an insurance company or other organisation to calculate the risk involved in an insurance, and therefore the premiums payable by people taking out insurance
addadd /d/ verb to put figures together to make a total 쑗 If you add the interest to the capital you will get quite a large sum. 쑗 Interest is added monthly.
add up /d p/ phrasal verb to put several figures together to make a total 쑗 He made a mistake in adding up the column of fig- ures.
add up to /d p tυ/ phrasal verb to make a total of 쑗 The total expenditure adds up to more than £1,000.
added value
added value /did vlju/ noun an amount added to the value of a product or service, equal to the difference between its cost and the amount received when it is sold.
Wages, taxes, etc. are deducted from the added value to give the profit. 쒁 VAT
addend
addend /dend/ noun a number added to the augend in an addition
addition
addition /ə|diʃ(ə)n/ noun 1. a thing or per- son added 쑗 The management has stopped all additions to the staff. 쑗 We are exhibiting several additions to our product line. 쑗 The marketing director is the latest addition to the board. 2. an arithmetical operation con- sisting of adding together two or more num- bers to make a sum 쑗 You don’t need a cal- culator to do simple addition.
additional
additional /ə|diʃ(ə)nəl/ adjective extra which is added 쑗 additional costs 쑗 They sent us a list of additional charges. 쑗 Some additional clauses were added to the con- tract. 쑗 Additional duty will have to be paid.
additional personal allowance
additional personal allowance /ə| diʃ(ə)nəl ps(ə)n(ə)l ə|laυəns/ noun a tax allowance which can be claimed by a single person who has a child of school age
living with them, formerly called the ‘sin- gle-parent allowance’
additional premium
additional premium /ə|diʃ(ə)nəl primiəm/ noun a payment made to cover extra items in an existing insurance
additional voluntary contributions
additional voluntary contributions /ə|diʃ(ə)n(ə)l vɒlənt(ə)ri kɒntri| bjuʃ(ə)nz/ plural noun extra payments made voluntarily by an employee to a pen- sion scheme on top of the normal contribu- tions, up to a maximum of 15% of gross earnings. Abbreviation AVCs
adequate disclosure
adequate disclosure /dikwət dis| kləυə/ noun a comprehensive presenta- tion of statistics in financial statements, such that they can be used to inform investment decisions
adjudicate
adjudicate /ə|dudikeit/ verb to give a judgment between two parties in law or to decide a legal problem 쑗 to adjudicate a claim 쑗 to adjudicate in a dispute
왍
he was adjudicated bankrupt he was declared legally bankruptadjudication
adjudication /ə|dudi|keiʃ(ə)n/ noun the act of giving a judgment or of deciding a legal problem
adjudication of bankruptcy
adjudication of bankruptcy /ə| dudikeiʃ(ə)n əv bŋkrptsi/ noun a legal order making someone bankrupt
adjudication tribunal
adjudication tribunal /ə|dudi| keiʃ(ə)n trai|bjun(ə)l/ noun a group which adjudicates in industrial disputes
adjudicator
adjudicator /ə|dudikeitə/ noun 1. a person who gives a decision on a problem 쑗 an adjudicator in an industrial dispute 2.
왍
the Adjudicator official who examines complaints from individuals and businesses about how the Inland Revenue handles their affairs, but does not deal with questions of tax liabilityadjust
adjust /ə|dst/ verb to change something to fit new conditions 쑗 Prices are adjusted for inflation.
‘…inflation-adjusted GNP moved up at a 1.3% annual rate’ [Fortune]
‘Saudi Arabia will no longer adjust its pro- duction to match short-term supply with demand’ [Economist]
‘…on a seasonally-adjusted basis, output of trucks, electric power, steel and paper decreased’ [Business Week]
adjustable rate mortgage
adjustable rate mortgage /ə| dstəb(ə)l reit mɔid/ noun a mort- gage where the interest rate changes accord- ing to the current market rates. Abbreviation ARM
adjustable
adjustable rate preferred stock /ə| dstəb(ə)l reit pri|fd stɒk/ noun
adjusted gross income 8 preference shares on which dividends are paid in line with the interest rate on Treasury bills. Abbreviation ARPS
adjusted gross income
adjusted gross income /ə|dstid rəυs inkm/ noun US a person’s total annual income less expenses, pension con- tributions, capital losses, etc., used as a basis to calculate federal income tax. Abbrevia- tion AGI
adjuster
adjuster /ə|dstə/ noun a person who calculates losses for an insurance company
adjusting entry
adjusting entry /ə|dstiŋ entri/ noun an entry in accounts which is made to cor- rect a mistake in the accounts
adjustment
adjustment /ə|dstmənt/ noun 1. an entry in accounts which does not represent a receipt or payment, but which is made to make the accounts correct 2. a change in the exchange rates, made to correct a balance of payment deficit
administer
administer /əd|ministə/ verb to organise, manage or direct the whole of an organisa- tion or part of one 쑗 She administers a large pension fund.
administered price
administered price /əd|ministəd prais/ noun US a price fixed by a manufac- turer which cannot be varied by a retailer (NOTE: The UK term is resale price mainte- nance.)
administration
administration /əd|mini|streiʃ(ə)n/ noun 1. the action of organising, controlling or managing a company 2. an appointment by a court of a person to manage the affairs of a company
administration costs
administration costs /əd|mini| streiʃ(ə)n kɒsts/, administration expenses /əd|mini|streiʃ(ə)n ik|spensiz/ plural noun the costs of management, not including production, marketing, or distri- bution costs
administrative expenses
administrative expenses /əd| ministrətiv ik|spensiz/ plural noun same as administration costs
administrative receiver
administrative receiver /əd| ministrətiv ri|sivə/ noun a person appointed by a court to administer the affairs of a company
administrative receivership
administrative receivership /əd| ministrətiv ri|sivəʃip/ noun the appoint- ment of an administrative receiver by a debenture holder
administrator
administrator /əd|ministreitə/ noun 1. a person who directs the work of other employees in a business 쑗 After several years as a college teacher, she hopes to become an administrator. 2. a person appointed by a court to manage the affairs of someone who dies without leaving a will
ADRADR abbreviation American Depositary Receipt
ad valorem
ad valorem /d və|lɔrəm/ adjective used to describe a tax or commission, e.g., Value Added Tax, that is calculated on the value of the goods or services provided, rather than on their number or size 쑗 ad val- orem duty 쑗 ad valorem tax
ad valorem duty
ad valorem duty /d və|lɔrəm djuti/ noun the duty calculated on the sales value of the goods
ad valorem tax
ad valorem tax /d və|lɔrem tks/ noun a tax calculated according to the value of the goods taxed
advance
advance /əd|vɑns/ noun money paid as a loan or as a part of a payment to be made later 쑗 She asked if she could have a cash advance. 쑗 We paid her an advance on account. 쑗 Can I have an advance of $100 against next month’s salary? 쐽 adjective early, or taking place before something else happens 쑗 advance payment 쑗 Advance holiday bookings are up on last year. 쑗 You must give seven days’ advance notice of withdrawals from the account.쐽 verb 1. to pay an amount of money to someone as a loan or as a part of a payment to be made later 쑗 The bank advanced him $100,000 against the security of his house. 2. to make something happen earlier 쑗 The date of the shipping has been advanced to May 10th. 쑗 The meeting with the German distributors has been advanced from 11.00 to 9.30.
advance payment guarantee
advance payment guarantee /əd| vɑns peimənt rən|ti/, advance pay- ment bond /əd|vɑns peimənt bɒnd/ noun a guarantee that enables a buyer to recover an advance payment made under a contract or order if the supplier fails to fulfil its contractual obligations
adverse balance
adverse balance /dvs bləns/ noun the deficit on an account, especially a nation’s balance of payments account
adverse opinion
adverse opinion /dvs ə|pinjən/ noun US an auditor’s report that a com- pany’s financial statement is not a fair repre- sentation of the company’s actual financial position
adverse variance
adverse variance /dvs veəriəns/ noun variance which shows that the actual result is worse than expected. Also called unfavourable variance
advice
advice /əd|vais/ noun a notification telling someone what has happened
adviser
adviser /əd|vaizə/, advisor noun a person who suggests what should be done 쑗 He is consulting the company’s legal adviser.
9 agreed
advisory
advisory /əd|vaiz(ə)ri/ adjective as an adviser 쑗 She is acting in an advisory capacity.
advisory funds
advisory funds /əd|vaiz(ə)ri fndz/ plural noun funds placed with a financial institution to invest on behalf of a client, the institution investing them at its own discre- tion
AFAANZ
AFAANZ abbreviation Accounting and Finance Association of Australia and New Zealand
AFBDAFBD abbreviation Association of Futures Brokers and Dealers
affiliated
affiliated /ə|filieitid/ adjective connected with or owned by another company 쑗 Smiths Ltd is one of our affiliated companies.
affiliated enterprise
affiliated enterprise /ə|filieitid entəpraiz/, affiliated company /ə| filieitid kmp(ə)ni/ noun company which is partly owned by another (though less than 50%), and where the share-owning company exerts some management control or has a close trading relationship with the associate 쑗 one of our affiliated companies
aftermarket
aftermarket /ɑftə|mɑkit/ noun a mar- ket in new shares, which starts immediately after trading in the shares begins
after tax
after tax /ɑftər tks/ adverb after tax has been paid
after-tax profit
after-tax profit /ɑftə tks prɒfit/ noun a profit after tax has been deducted
age analysis of debtors
age analysis of debtors /eid ə| nləsis əv detəz/ noun the amount owed by debtors, classified by age of debt
aged debtors analysis
aged debtors analysis /eidd detəz ə| nləsis/, ageing schedule /eidiŋ ʃedjul/ noun a list which analyses a com- pany’s debtors, showing the number of days their payments are outstanding
agency
agency /eidənsi/ noun 1. an office or job of representing another company in an area 쑗 They signed an agency agreement or an agency contract. 2. an office or business which arranges things for other companies
agency bank
agency bank /eidənsi bŋk/ noun a bank which does not accept deposits, but acts as an agent for another, usually foreign, bank
agency bill
agency bill /eidənsi bil/ noun a bill of exchange drawn on the local branch of a for- eign bank
agency broker
agency broker /eidənsi brəυkə/ noun a dealer who acts as the agent for an investor, buying and selling for a commission
agency worker
agency worker /eidənsi wkə/ noun a person who is employed by an agency to work for another company. He or she is
taxed as an employee of the agency, not of the company where he or she actually works.
agenda
agenda /ə|dendə/ noun a list of things to be discussed at a meeting 쑗 The conference agenda or the agenda of 쑗 After two hours we were still discussing the first item on the agenda. 쑗 We usually put finance at the top of the agenda. 쑗 The chair wants two items removed from or taken off the agenda.
agent
agent /eidənt/ noun 1. a person who rep- resents a company or another person in an area 쑗 to be the agent for BMW cars 쑗 to be the agent for IBM 2. a person in charge of an agency 쑗 The estate agent sent me a list of properties for sale.
agent bank
agent bank /eidənt bŋk/ noun a bank which uses the credit card system set up by another bank
agent’s commission
agent’s commission /eidənts kə| miʃ(ə)n/ noun money, often a percentage of sales, paid to an agent
age-related
age-related /eid ri|leitid/ adjective connected with a person’s age
age-related allowance
age-related allowance /eid ri|leitid ə|laυəns/ noun an extra tax allowance which a person over 65 may be entitled to
aggregate
aggregate /riət/ adjective total, with everything added together 쑗 aggregate out- put
aggregate demand
aggregate demand /riət di| mɑnd/ noun the total demand for goods and services from all sectors of the economy including individuals, companies and the government 쑗 Economists are studying the recent fall in aggregate demand. 쑗 As incomes have risen, so has aggregate demand.
aggregate risk
aggregate risk /riət risk/ noun the risk which a bank runs in lending to a cus- tomer
aggregate supply
aggregate supply /riət sə|plai/ noun all goods and services on the market 쑗 Is aggregate supply meeting aggregate demand?
AGIAGI abbreviation US adjusted gross income
agioagio /diəυ/ noun 1. a charge made for changing money of one currency into another, or for changing banknotes into cash 2. the difference between two values, such as between the interest charged on loans made by a bank and the interest paid by the bank on deposits, or the difference between the values of two currencies
AGMAGM abbreviation Annual General Meeting
agreed
agreed /ə|rid/ adjective having been accepted by everyone 쑗 We pay an agreed
agreed price 10 amount each month. 쑗 The agreed terms of employment are laid down in the contract.
agreed price
agreed price /ə|rid prais/ noun a price which has been accepted by both the buyer and seller
AICPA
AICPA abbreviation American Institute of Certified Public Accountants
AIMAIM abbreviation Alternative Investment Market
airmail transfer
airmail transfer /eəmeil trnsf/ noun an act of sending money from one bank to another by airmail
alien corporation
alien corporation /eiliən kɔpə| reiʃ(ə)n/ noun US a company which is incorporated in a foreign country
A list
A list /ei list/ noun a list of members of a company at the time it is wound up who may be liable for the company’s unpaid debts
all-in price
all-in price /ɔl in prais/ noun a price which covers all items in a purchase such as goods, delivery, tax or insurance
all-in rate
all-in rate /ɔl in reit/ noun 1. a price which covers all the costs connected with a purchase, such as delivery, tax and insur- ance, as well as the cost of the goods them- selves 2. a wage which includes all extra payments such as bonuses and merit pay
allocate
allocate /ləkeit/ verb 1. to divide some- thing in various ways and share it out 쑗 How are we going to allocate the available office space? 2. to assign a whole item of cost, or of revenue, to a single cost unit, centre, account or time period
allocated costs
allocated costs /lə|keitd kɒsts/ plu- ral noun overhead costs which have been allocated to a specific cost centre
allocation
allocation /lə|keiʃ(ə)n/ noun the proc- ess of providing sums of money for particu- lar purposes, or a sum provided for a pur- pose 쑗 the allocation of funds to a project
allot
allot /ə|lɒt/ verb to share out
allotment
allotment /ə|lɒtmənt/ noun 1. the process of sharing out something, especially money between various departments, projects or people 쑗 The allotment of funds to each project is the responsibility of the finance director. 2. the act of giving shares in a new company to people who have applied for them 쑗 share allotment 쑗 payment in full on allotment
allow
allow /ə|laυ/ verb 1. to say that someone can do something 쑗 Junior members of staff are not allowed to use the chairman’s lift. 쑗 The company allows all members of staff to take six days’ holiday at Christmas. 2. to give 쑗 to allow 5% discount to members of staff 3. to agree to or accept legally 쑗 to allow a claim or an appeal
allow for /ə|laυ fɔ/ phrasal verb to give a discount for something, or to add an extra sum to cover something 쑗 to allow for mon- ey paid in advance 쑗 Add on an extra 10%
to allow for postage and packing.
allowable
allowable /ə|laυəb(ə)l/ adjective legally accepted. Opposite disallowable
allowable deductions
allowable deductions /ə|laυəb(ə)l di| dkʃ(ə)ns/ plural noun deductions from income which are allowed by the Inland Revenue, and which reduce the tax payable
allowable expenses
allowable expenses /ə|laυəb(ə)l ik| spensiz/ plural noun business expenses which can be claimed against tax
allowable losses
allowable losses /ə|laυəb(ə)l lɒsiz/ plural noun losses, e.g. on the sale of assets, which are allowed to be set off against gains
allowance
allowance /ə|laυəns/ noun 1. money which is given for a special reason 쑗 a travel allowance or a travelling allowance 2. a part of an income which is not taxed 쑗 allow- ances against tax or tax allowances 쑗 per- sonal allowances (NOTE: The US term is exemption) 3. money removed in the form of a discount 쑗 an allowance for deprecia- tion 쑗 an allowance for exchange loss
‘…the compensation plan includes base, incentive and car allowance totalling
$50,000+’ [Globe and Mail (Toronto)]
allowance for bad debt
allowance for bad debt /ə|laυəns fə bd det/ noun a provision made in a com- pany’s accounts for debts which may never be paid
allowances against tax
allowances against tax /ə|laυənsiz ə| enst tks/ plural noun part of someone’s income which is not taxed
all-risks policy
all-risks policy /ɔl risks pɒlisi/ noun an insurance policy which covers risks of any kind, with no exclusions
alternative cost
alternative cost /ɔl|tnətiv kɒst/ noun same as opportunity cost
Alternative Investment Market
Alternative Investment Market /ɔl| lnətiv in|vestmənt mɑkit/ noun a London stock market, regulated by the Lon- don Stock Exchange, dealing in shares in smaller companies which are not listed on the main London Stock Exchange. Abbrevi- ation AIM (NOTE: The AIM is a way in which smaller companies can sell shares to the investing public without going to the expense of obtaining a full share listing.)
alternative minimum tax
alternative minimum tax /ɔl|lnətiv miniməm tks/ noun US a way of calcu- lating US income tax that is intended to ensure that wealthy individuals, corpora- tions, trusts, and estates pay at least some tax regardless of deductions, but that is increas-
