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Accounting Definitions > D Accounting Definitions > Flashcards

D Accounting Definitions Flashcards

1
Q

<p>Data Communications</p>

A

<p>Transfer of data among functional units through data transmission protocols. (IMA)</p>

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2
Q

<p>Data Encryption</p>

A

<p>In computer security, the process of transforming data into an unintelligible form in such a way that the original data either cannot be obtained or can be obtained only by using a decryption process. (IMA)</p>

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3
Q

<p>Data Warehouse</p>

A

<p>A central repository for all or significant parts of the data that an organization's business systems collect. (IMA)</p>

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4
Q

<p>Database</p>

A

<p>1. A set of data that is sufficient for a given purpose or for a given data processing system. 2. A collection of data fundamental to a system or to an enterprise. (IMA)</p>

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5
Q

<p>Database Management</p>

A

<p>The management of an organization's data. (IMA)</p>

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6
Q

<p>Days Purchases in Payables</p>

A

<p>A financial ratio measuring the portion of accounts payable that is current. (IMA)</p>

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7
Q

<p>Days Sales in Inventory</p>

A

<p>A measure of the age or adequacy of inventory. (IMA)</p>

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8
Q

<p>Days Sales in Receivables</p>

A

<p>A measure of the average number of days a credit sale is outstanding. (Also called Days Sales Outstanding and Average Collection Period.) (IMA)</p>

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9
Q

<p>Debenture Bonds</p>

A

<p>Bonds that are issued without any collateral property supporting them. (HOCK)</p>

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10
Q

<p>Debt Ratio</p>

A

<p>A financial ratio used to measure the extent to which an entity utilizes debt. (Also called Debt to Total Assets Ratio.) (IMA)</p>

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11
Q

<p>Debt Security</p>

A

<p>A promise in writing to repay a debt. For example a bond, bill or note. (IMA)</p>

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12
Q

<p>Debt to Total Assets Ratio</p>

A

<p>A financial ratio used to measure the extent to which an entity utilizes debt, expressed as total debt divided by total assets. (Also called Debt Ratio.) (IMA)</p>

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13
Q

<p>Debt-to-Equity Ratio</p>

A

<p>A measure of leverage, represented by total debt divided by equity. (IMA)</p>

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14
Q

<p>Decentralization</p>

A

<p>An organizational structure in which senior management maintains min­imal control over individual operations and policies. (IMA)</p>

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15
Q

<p>Decision Tree</p>

A

<p>A diagram of possible alternatives and their expected consequences used to formulate possible courses of actions in order to make decisions. (IMA)</p>

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16
Q

<p>Decline Stage</p>

A

<p>The final stage in the life cycle of a product. In the decline stage sales drop and profits fall. (HOCK)</p>

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17
Q

<p>Declining-Balance Method</p>

A

<p>An accelerated depreciation method in which an asset's net book value is multiplied by a constant depreciation rate resulting in higher depreciation charges in the early years of an asset's life. (IMA)</p>

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18
Q

<p>Default Risk</p>

A

<p>The risk that a debtor may not be able to meet the terms of a loan. (IMA)</p>

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19
Q

<p>Deferrable Cost</p>

A

<p>A cost that can be deferred to future periods without creating a significant impact in the current period. (HOCK)</p>

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20
Q

<p>Deferred</p>

A

<p>When an asset or liability is not realized as an expense or income until a future date. (IMA)</p>

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21
Q

<p>Deferred Expenses</p>

A

<p>Expenditures not recognized in the period in which they were made. They are carried forward as assets that will become expenses in future periods. (Also called Deferred Charges.) (IMA)</p>

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22
Q

<p>Deferred Income Taxes</p>

A

<p>In general, the difference between the income tax expense recorded for financial accounting purposes and the amount of income tax paid. (IMA)</p>

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23
Q

<p>Deferred Revenue</p>

A

<p>Generally, revenues received or recorded but not yet earned. (Also called Deferred Credit.) (IMA)</p>

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24
Q

<p>Deflation</p>

A

<p>A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit. (HOCK)</p>

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25
Q

<p>Degree of Financial Leverage</p>

A

<p>A financial ratio represented as the % change in net income divided by the % change in Earnings Before Interest and Taxes. (IMA)</p>

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26
Q

<p>Degree of Operating Leverage</p>

A

<p>A financial ratio represented as the % change in Earnings Before Interest and Taxes divided by the % change in sales. (IMA)</p>

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27
Q

<p>Delegation of Authority</p>

A

<p>The assignment of authority and responsibility to another person to carry out specific activities. (IMA)</p>

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28
Q

<p>Demand</p>

A

<p>The quantity of a commodity or service wanted at a specified price and time. Along with supply and other factors, a key determinant of price. (IMA)</p>

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29
Q

<p>Demand-Pull System</p>

A

<p>A production system in which goods are produced only when they are ordered by the customer. Thus, the customer's order "pulls" the unit through the factory. (HOCK)</p>

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30
Q

<p>Department</p>

A

<p>A division or distinct section of an organization. (IMA)</p>

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31
Q

<p>Departmental Overhead</p>

A

<p>The total overhead costs incurred by a department. (IMA)</p>

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32
Q

<p>Dependent Variable</p>

A

<p>A variable (often denoted by y) whose value depends on that of another. (HOCK)</p>

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33
Q

<p>Depletion</p>

A

<p>The process of allocating the cost of wasting assets (natural resources) to expense over the periods benefiting from the cost. (IMA)</p>

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34
Q

<p>Depreciation</p>

A

<p>The process of allocating the cost of tangible assets to operations over periods benefited (generally the expected life of the asset). (IMA)</p>

35
Q

<p>Derivatives</p>

A

<p>A collective term for financial instruments whose prices are based on the price of another (underlying) investment (e.g., futures, options, warrants, and convertible securities). (IMA)</p>

36
Q

<p>Design Effectiveness</p>

A

<p>Assesses whether the controls are properly designed and whether the controls satisfy the company's control objectives and can effectively prevent or detect errors or fraud that could result in material misstatements in the financial statements. (HOCK)</p>

37
Q

<p>Detection Risk</p>

A

<p>The risk that errors not detected or prevented by the control structure will also not be detected by the auditor. (IMA)</p>

38
Q

<p>Detective Controls</p>

A

<p>Controls designed to detect (discover) an unwanted event that has already occurred. (HOCK)</p>

39
Q

<p>Differential Cost</p>

A

<p>The difference in total cost between two alternatives. (Also called Incremental Cost). (IMA)</p>

40
Q

<p>Differential Costs</p>

A

<p>Costs that differ between two alternatives. (HOCK)</p>

41
Q

<p>Diluted Earnings per Share</p>

A

<p>Earnings (net income) per share where "share" includes common stock, preferred stock, unexercised stock options, unexercised warrants, and some convertible debt. (IMA)</p>

42
Q

<p>Direct Cost</p>

A

<p>A cost that is specifically identified with a single cost object. (IMA)</p>

43
Q

<p>Direct Costing</p>

A

<p>Method of inventory costing that includes all direct manufacturing costs and variable indirect manufacturing costs as inventory (fixed indirect manufacturing costs are excluded). (Also called Variable Costing.) (IMA)</p>

44
Q

<p>Direct Evidence</p>

A

<p>Evidence that was acquired directly by the party offering it and thus that party has personal knowledge of it. The person either inspected the documents, witnessed the transaction or testified as to his or her actions. (HOCK)</p>

45
Q

<p>Direct Foreign Investment</p>

A

<p>Overseas investment by multinational enterprises. (IMA)</p>

46
Q

<p>Direct Labor Cost</p>

A

<p>The compensation of all labor that can be identified with a cost object. (IMA)</p>

47
Q

<p>Direct Materials Cost</p>

A

<p>The acquisition cost of all materials that can be identified as part of the cost object. (IMA)</p>

48
Q

<p>Direct Method</p>

A

<p>1.Method of allocating service department costs that ignores any services rendered by one service department to another, allocating each service department's costs directly to the production departments. (Also called Direct Allocation Method.) 2. A method of preparing The Statement of Cash Flows where net cash flow from operating activities are reported as major classes of operating cash receipts and cash disbursements (as opposed to indirect method.) (IMA)</p>

49
Q

<p>Directive Controls</p>

A

<p>Controls designed to ensure (encourage) the occurrence of a desirable event. (HOCK)</p>

50
Q

<p>Disaster Recovery</p>

A

<p>A procedure for storing an installation's essential data in a secure location, and for recovering that data in the event of a catastrophic problem. (IMA)</p>

51
Q

<p>Disbursement</p>

A

<p>The payment of cash. (IMA)</p>

52
Q

<p>Disbursement Float</p>

A

<p>The value of checks that an entity wrote that have not yet cleared the banking system and not yet deducted from the entity's bank account. (Also called Payment Float.) (IMA)</p>

53
Q

<p>Disclosure</p>

A

<p>An explanation or exhibit attached to a financial statement, or report. (IMA)</p>

54
Q

<p>Discount</p>

A

<p>1. In the case of debt securities, the difference between the price paid by an investor and the face value. 2. In the case of products for sale, the difference between the price paid by a customer and the full price of the item. (IMA)</p>

55
Q

<p>Discount Factor</p>

A

<p>The present value of one unit of currency that is expected to be received in future years. (IMA)</p>

56
Q

<p>Discount Rate</p>

A

<p>The interest rate used to convert future cash flows to their present value. (IMA)</p>

57
Q

<p>Discounted Cash Flow</p>

A

<p>A method of evaluating future net cash flows by discounting them to their present value. The two methods most commonly used are Internal Rate of Return (IRR) and Net Present Value (NPV) methods. (IMA)</p>

58
Q

<p>Discounted Interest</p>

A

<p>A method of calculating interest in which the interest that will be due at the end of the loan is withheld from the amount that is given at the start of the loan. Discounted interest will increase the effective interest rate of the loan. (HOCK)</p>

59
Q

<p>Discounted Payback</p>

A

<p>The amount of time expected to elapse before the discounted present value of cash inflows equals the discounted present value of the cash outflows. (IMA)</p>

60
Q

<p>Discrete Random Variable</p>

A

<p>A random variable that can take on any one of a number of values that can be counted and that are usually whole numbers. (HOCK)</p>

61
Q

<p>Discretionary Cost</p>

A

<p>A cost whose amount within a time period is governed by a management decision to incur the cost. (Also called Managed Cost or Pro­grammed Cost.) (IMA)</p>

62
Q

<p>Diseconomies of Scale</p>

A

<p>Increases in average total costs occurring from an increase in the scale of production in the long run. (IMA)</p>

63
Q

<p>Distribution</p>

A

<p>The mechanism by which products or services are delivered to the customer. (IMA)</p>

64
Q

<p>Distribution Channels</p>

A

<p>A chain of intermediaries, each passing the product down the chain to the next organization, until it finally reaches the consumer or end-user (e.g., retailer, wholesaler, agent). (IMA)</p>

65
Q

<p>Diversification</p>

A

<p>A technique used by an investor to reduce risk by distributing investment funds among a variety of asset classes. (IMA)</p>

66
Q

<p>Divestiture</p>

A

<p>The sale of one or more of a company's subsidiaries or divisions. (IMA)</p>

67
Q

<p>Dividend</p>

A

<p>The distribution of part of a company's earnings to shareholders. (IMA)</p>

68
Q

<p>Dividend Discount Model</p>

A

<p>A method used to place a value on a share of stock based on the net present value of the dividends that are expected to be received in the future. Expressed as D / (k – g), where D = the expected dividend per share, k = the expected rate of return, and g is the expected growth rate. (2 forms: constant growth model and two-stage model.) (IMA)</p>

69
Q

<p>Dividend Payout</p>

A

<p>The amount of the dividend paid on a share of stock in a year. (IMA)</p>

70
Q

<p>Dividend Payout Ratio</p>

A

<p>The annual dividend per share of stock as a proportion of Earnings per Share. (IMA)</p>

71
Q

<p>Dividend Reinvestment Plans (Drips)</p>

A

<p>A program that automatically reinvests cash dividends received by the shareholder in additional shares of the company. (HOCK)</p>

72
Q

<p>Dividend Yield</p>

A

<p>The annual dividend income per share received from a company as a proportion of the current market price per share. (IMA)</p>

73
Q

<p>Documentary Evidence</p>

A

<p>Any original record, deed, contract or written instrument that documents a transaction. Originals of documentary evidence are required to substantiate their validity. (HOCK)</p>

74
Q

<p>Dogs</p>

A

<p>One of the classifications of products by the Boston Consulting Group. A dog is in a mature industry with a low market growth rate, and it has a low share of the market. A dog does not consume much cash, but it does not generate much cash, either. It is usually barely breaking even. Dogs should be sold off, and pricing is not a major concern. (HOCK)</p>

75
Q

<p>Downstream Costs</p>

A

<p>Costs incurred after a product is manufactured, including marketing, distribution, and customer service. (IMA)</p>

76
Q

<p>Draft</p>

A

<p>An instrument signed by a one person to another person requesting payment at a future time to a third party. (IMA)</p>

77
Q

<p>Drum-Buffer-Rope System</p>

A

<p>The Theory of Constraints production application, where drum refers to the constraint, buffer refers to the material release duration, and rope refers to the release timing. The aim is to protect the constraint in the system against process dependency and variation, maximizing the systems' overall effectiveness. (IMA)</p>

78
Q

<p>Dual Allocation Method</p>

A

<p>A method of allocating service department costs where costs are classified into two cost pools – a variable cost cost-pool and a fixed-cost cost-pool. Each of these pools uses a different cost-allocation base. (IMA)</p>

79
Q

<p>Dual-Rate Transfer Pricing</p>

A

<p>A method where the transfer price is set at different levels for the supplying and receiving divisions of an organization. (IMA)</p>

80
Q

<p>Due Diligence Engagement</p>

A

<p>An engagement to confirm company records, both financial and those of ownership of property, utilized especially when a unit is being acquired, merged or sold. (HOCK)</p>

81
Q

<p>Dumping</p>

A

<p>Occurs when a company sets the price of the product artificially low and then sells it in another country. Though this may not be illegal, it is unethical and will often lead to retaliatory tariffs and taxes by the country in which the product was dumped. (HOCK)</p>

82
Q

<p>DuPont Model</p>

A

<p>A method used to analyze the components of Return on Equity (ROE), where ROE is expressed as the product of Profit Margin, Total Asset Turnover and the Equity Multiplier (Financial Leverage Ratio). (IMA)</p>

83
Q

<p>Duration</p>

A

<p>A measure of the volatility of fixed income securities or of a portfolio of fixed income securities to changes in interest rates (i.e., the weighted average number of years until cash flows are received). (IMA)</p>

84
Q
A

Accounting Definitions (15 decks)

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