Category: Dictionary (Accounting, Tax, Auditing)

Company Level Controls: Controls that exist at the company level that have an impact on controls at the process, transaction, or application level.

Company: Organization engaged in business as a PROPRIETORSHIP, PARTNERSHIP, CORPORATION, or other form of enterprise.

Commodities: Bulk goods such as grains, metals, and foods traded on a commodities exchange or on the SPOT MARKET.

Committee of Sponsoring Organizations of the Treadway Commission (COSO): An alliance of five professional organizations dedicated to disseminating appropriate internal control standards.

Commission: Percentage of the selling price of the property, paid by the seller.

Commercial Paper: A way of borrowing money by using unsecured short-term loans sold directly to the public, usually through professionally managed investments firms.

Comfort Letter: Letter provided by a company’s independent public accountant to an underwriter when the underwriter has a DUE DILIGENCE responsibility under Section 11 of the Securities Act of 1933 regarding financial information included in an offering statement.

Combined Financial Statement: FINANCIAL STATEMENT comprising the accounts of two or more entities.

Collateralized Mortgage Obligation (CMO): SECURITY whose cash flows equal the difference between the cash flows of the collateralizing ASSETS and the collateralized obligations of a securitized TRUST. Characteristics of CMO residuals vary greatly and can be extremely complex in nature.

Collateral: ASSET provided to a CREDITOR as security for a loan.

Co-Mingling: Mixing ASSETS, e.g. customer-owned SECURITIES, with those owned by a firm in its proprietary accounts.

Closed-End Mutual Fund: MUTUAL FUND with a fixed number of shares outstanding that may be bought or sold. CMO – See COLLATERALIZED MORTGAGE OBLIGATION.

Close: To clear the BALANCES of temporary accounts in order to be ready for the next accounting period.

Claim for Refund: A refund is not automatically mailed if one is due. A taxpayer, whether business or individual, must file a request on a form. It must also be filed within the timeframe allotted or the refund may be lost. An individual can claim a refund back to whatever year it was due but it will only be paid three years back or less.

Chief Financial Officer (CFO): Executive officer who is responsible for handling funds, signing CHECKS, keeping financial records, and financial planning for a CORPORATION.

Chief Executive Officer (CEO): Officer of a firm principally responsible for the activities of a COMPANY.

Certified Public Accountant (CPA): ACCOUNTANT who has satisfied the education, experience, and examination requirements of his or her jurisdiction necessary to be certified as a public accountant.

Certified Management Accountant (CMA): An accreditation conferred by the Institute of Management Accountants that indicates the designee has passed an examination and attained certain levels of education and experience in the practice of accounting in the private sector.

Certified Internal Auditor (CIA): Internal AUDITOR who has satisfied the examination requirements of the Institute of Internal Auditors.

Certified Financial Planner (CFP): Individual who is trained to develop and implement financial plans for individuals, businesses, and organizations, utilizing knowledge of income and estate tax, investments, risk management analysis and retirement planning. CFPs are certified after completing a series of requirements that include education, experience, ethics and an exam. CFPs are not regulated by a governmental authority.

Cash Payments Journal: A multicolumn journal used to record sums of cash paid out for expenses.

Cash Flows: Net of cash receipts and cash disbursements relating to a particular activity during a specified accounting period.

Certificate of Deposit (CD) : Formal instrument issued by a bank upon the deposit of funds which may not be withdrawn for a specified time period. Typically, an early withdrawal will incur a penalty.

Cash Flow to Sales: A way of measuring the ability of sales to generate operating CASH FLOWS.

Cash Flow to Assets: Used to measure the ability of ASSETS to generate operating CASH FLOWS.

Cash Equivalents: Short-term (generally less than three months), highly liquid INVESTMENTS that are convertible to known amounts of cash.

Cash Basis: Method of bookkeeping by which REVENUES and EXPENDITURES are recorded when they are received and paid.

Cash Account: Brokerage firm account whose transactions are settled on a cash basis.

Cash : ASSET account on a balance sheet representing paper currency and coins, negotiable money orders and checks, bank balances, and certain short-term government securities.

Carryovers: Provision of tax law that allows current losses or certain tax credits to be utilized in the tax returns of future periods..

Carrying Value: Amount, net or CONTRA ACCOUNT balances, that an ASSET or LIABILITY shows on the BALANCE SHEET of a company. Also known as BOOK VALUE.

Capitalized Lease: LEASE recorded as an ASSET acquisition accompanied by a corresponding LIABILITY by the LESSEE.

Capitalized Interest: INTEREST cost incurred during the time necessary to bring an ASSET to the condition and location for its intended use and included as part of the HISTORICAL COST of acquiring the asset.

Capitalize: Convert a schedule of INCOME into a principal amount, called capitalized value, by dividing by a rate of INTEREST.

Capital Projects Funds: Funds used by a not-for-profit organization to account for all resources used for the development of a land improvement or building addition or renovation.

Capital Expenditure: Outlay of money to acquire or improve capital assets such as buildings and machinery.

Capital Asset Pricing Model (CAPM): Sophisticated model of the relationship between expected risk and expected return.

Callable Instrument: BOND which accords an issuer the right to redemption before it is due.

Callable: Redeemable by the issuer before the scheduled maturity.

Call Price: A specified price, usually above face value, at which a CORPORATION may, at its option, buy back and retire BONDS before maturity.

Call Loan: Loan repayable on demand. Also known as DEMAND LOAN.

Cafeteria Plan: A benefit plan maintained by an employer for the benefit of the employees under which each participant has the opportunity to select the benefits they desire. Certain minimum choices and nondiscriminatory rules apply.

Bylaws: Collection of formal, written rules governing the conduct of a CORPORATION’S affairs (such as what officers it will have, what their responsibilities are, and how they are to be chosen). Bylaws are approved by a corporation’s stockholders, if a stock corporation, or other owners, if a non-stock corporation.

Buyout: Purchase of at least a controlling percentage of a company’s stock to take over its ASSETS and operations.

Business Segment: Any division of an organization authorized to operate, within prescribed or otherwise established limitations, under substantial control by its own management.

Break-Even Units: The number of units of a product that must be sold before a company makes enough money to pay for direct and indirect costs of making the product.

Business Combinations: Combining of two entities. Under the PURCHASE METHOD OF ACCOUNTING, one entity is deemed to acquire another and there is a new basis of accounting for the ASSETS and LIABILITIES of the acquired company. In a POOLING OF INTERESTS, two entities merge through an exchange of COMMON STOCK and there is no change in the CARRYING VALUE of the assets or liabilities.

Burden Rate: Standard rate multiplied by a level of activity to determine the OVERHEAD cost of that activity. Activity measures include LABOR or machine hours.

Break-Even Point: The point at which TOTAL REVENUES equals TOTAL COSTS.

Bondholder: A person who owns a BOND certificate issued by a government or CORPORATION.

Bond Indenture: An additional agreement to a BOND issue that defines the rights, privileges, and limitations of BONDHOLDERS.

Bond: One type of long-term PROMISSORY NOTE, frequently issued to the public as a SECURITY regulated under federal securities laws or state BLUE SKY LAWS. Bonds can either be registered in the owner’s name or are issued as bearer instruments.

Board of Directors: Individuals responsible for overseeing the affairs of an entity, including the election of its officers. The board of a CORPORATION that issues stock is elected by stockholders.

Blue Sky Laws: State laws that regulate the ISSUANCE of SECURITIES. These laws are coordinated with federal acts.

Bid and Asked: Bid is the highest price a prospective buyer is prepared to pay at a particular time for a trading unit of a given SECURITY; asked is the lowest price acceptable to a prospective seller of the same security. The difference between the prices is the SPREAD.

Beta Coefficient: Measure of a stock’s relative volatility. The beta is the covariance of a stock in relation to the rest of the stock market.

Bequest: Legal process, governed by federal statute, whereby the DEBTS of an insolvent person are liquidated after being satisfied to the greatest extent possible by the DEBTOR’S ASSETS. During bankruptcy, the debtor’s assets are held and managed by a court appointed TRUSTEE.

Base Market Value: Average market price of a group of securities at a given time.

Bankruptcy: Legal process, governed by federal statute, whereby the DEBTS of an insolvent person are liquidated after being satisfied to the greatest extent possible by the DEBTOR’S ASSETS. During bankruptcy, the debtor’s assets are held and managed by a court appointed TRUSTEE.

Bank Statement: A periodic statement, usually monthly, that a bank sends to the holder of a checking account showing the balance in the account at the beginning of the month, during, and at the end of the month.

Bank Reconciliation: A process by which an accountant determines whether and why there is a difference between the balance shown on the bank statement and the balance of the cash account in the firm’s GENERAL LEDGER.

Backup Withholding: Payors of interest, dividends and other reportable payments must withhold income tax equal at a rate equal to the fourth lowest rate applicable to single filers if they fail to supply a federal id # or if they fail to certify that they are not subject to it.

Average-Cost Method: A way of arriving at the cost of inventory that computes the average cost of all goods available for sale during a fixed period in order to determine the value of inventory.

Average Days’ Sales Uncollected: A ratio that shows the average length of time it takes a company to receive payment for credit sales.

Average Days’ Inventory On-Hand: The average number of days required to sell the current inventory of products available for sale. It is found by dividing the number of days in a year by inventory turnover.

Auditors’ Report: Written communication issued by an independent CERTIFIED PUBLIC ACCOUNTANT (CPA) describing the character of his or her work and the degree of responsibility taken. An auditors’ report includes a statement that the AUDIT was conducted in accordance with GENERALLY ACCEPTED AUDITING STANDARDS (GAAS), which require that the AUDITOR plan and perform the audit to obtain reasonable assurance about whether the FINANCIAL STATEMENTS are free of material misstatement, as well as a statement that the auditor believes the audit provides a reasonable basis for his or her opinion.

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

Auditing Standards: Guidelines to which an AUDITOR adheres. Auditing standards encompass the auditor’s professional qualities, as well as his or her judgment in performing an AUDIT and in preparing the AUDITORS’ REPORT. Audits conducted by independent CERTIFIED PUBLIC ACCOUNTANT (CPA) usually in accordance with GENERALLY ACCEPTED AUDITING STANDARDS (GAAS), which consist of standards approved and adopted by the membership of the AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (AICPA).

Audit Engagement: Agreement between a CPA firm and its client to perform an AUDIT.

At Par: At a price equal to the face, or nominal, value of a security.

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.

Appreciation: Increase in the value of an ASSET such as a stock, BOND, commodity, or real estate.

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.

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

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.

American Depository Receipt (ADR): Receipts for shares of foreign company stock maintained by an intermediary indicating ownership.

Alternative Minimum Tax (AMT): Tax imposed to back up the regular income tax imposed on CORPORATION and individuals to assure that taxpayers with economically measured income exceeding certain thresholds pay at least some income tax.

Alternative Dispute Resolution: An alternative to formal litigation which includes techniques such as arbitration, mediation, and a non-binding summary jury trial.

Allowance for Doubtful Accounts: A contra-asset account used to reduce ACCOUNTS RECEIVABLE to the amount that is expected to be collected in cash.

Allocate:To set aside for a specific reason.

AICPA: National professional membership organization that represents practicing CERTIFIED PUBLIC ACCOUNTANTS (CPAs). The AICPA establishes ethical and auditing standards as well as standards for other services performed by its members. Through committees, it develops guidance for specialized industries. It participates with the FINANCIAL ACCOUNTING STANDARDS BOARD (FASB) and the GOVERNMENT ACCOUNTING STANDARDS BOARD (GASB) in establishing accounting principles.

Agency Fund: Fund consisting of ASSETS where the holder agrees to remit the assets, income from the assets, or both, to a specified beneficiary in due course or at a specified time.

Affiliated Company: Company, or other organization related through common ownership, common control of management or owners, or through some other control mechanism, such as a long-term LEASE.

Analyst: Person in a brokerage house, bank trust dept., or mutual fund group who studies a number of companies and makes buy or sell recommendations on the securities of particular companies and industry groups.

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)

Adjusted Trial Balance: A trial balance prepared after all adjusting entries have been recorded and posted to the accounts. Should have equal credit and debit totals.

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.

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.

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.

Actuary: Mathematician employed by an insurance company to calculate PREMIUMS, RESERVES, DIVIDENDS, and insurance, PENSION, and ANNUITY rates, using risk factors obtained from experience tables.

Acquisition: One company taking over controlling interest in another company.

Acid-Test Ratio: The relationship of a company’s current assets that can be converted into cash to its current liabilities. It is determined by dividing QUICK ASSETS by current liabilities.

Accumulation: Profits that are not paid out as DIVIDENDS but are instead added to the company’s capital base.

Accrued Expense: An expense that has occurred but is not recognized in the accounts.

Accrued Interest: INTEREST that has accumulated between the most recent payment and the sale of a BOND or other fixed-income security.

Accrual Basis: Method of ACCOUNTING that recognizes REVENUE when earned, rather than when collected. Expenses are recognized when incurred rather than when paid.

Accrual Accounting: The attempt to record the financial effects of transactions and other events in the periods in which those transactions or events occur rather than only in the periods in which cash is received or paid by the business, using all the techniques developed by accountants to apply the MATCHING PRINCIPLE.

វចនានុក្រមនៅទីនេះ?អាចបកប្រែពាក្យបច្ចេកទេសផ្សេងៗទៀត៖

អាចបកប្រែជា “ខ្មែរ ឬ អង់គ្លេស ” សម្រាប់ពាក្យបច្ចេកទេស “Accounting, Tax, Audit, Finance…” ត្រឹមត្រូវ 99.99% ចំពោះពាក្យបកប្រែខាងលើដោយអ្នកជំនាញឬឯកសារយោងពី? ACCA ,Tax Agent, MBA,PhD, GDT, NAA, NAC, KICPAA…

Accrual: The recognition of an expense or revenue that has occurred but has not yet been recorded.

វចនានុក្រមនៅទីនេះ?អាចបកប្រែពាក្យបច្ចេកទេសផ្សេងៗទៀត៖

អាចបកប្រែជា “ខ្មែរ ឬ អង់គ្លេស ” សម្រាប់ពាក្យបច្ចេកទេស “Accounting, Tax, Audit, Finance…” ត្រឹមត្រូវ 99.99% ចំពោះពាក្យបកប្រែខាងលើដោយអ្នកជំនាញឬឯកសារយោងពី? ACCA ,Tax Agent, MBA,PhD, GDT, NAA, NAC, KICPAA…

Accounts Payable Subsidiary Ledger: A financial record of an individual ACCOUNT PAYABLE in which entries can be made daily.

វចនានុក្រមនៅទីនេះ?អាចបកប្រែពាក្យបច្ចេកទេសផ្សេងៗទៀត៖

អាចបកប្រែជា “ខ្មែរ ឬ អង់គ្លេស ” សម្រាប់ពាក្យបច្ចេកទេស “Accounting, Tax, Audit, Finance…” ត្រឹមត្រូវ 99.99% ចំពោះពាក្យបកប្រែខាងលើដោយអ្នកជំនាញឬឯកសារយោងពី? ACCA ,Tax Agent, MBA,PhD, GDT, NAA, NAC, KICPAA…

Accounting Principles Board (APB): Senior technical committee of the AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (AICPA) which issued pronouncements on accounting principles from 1959-1973. The APB was replaced by the FINANCIAL ACCOUNTING STANDARDS BOARD (FASB).