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Accounting Definitions > J-K-L Accounting Definitions > Flashcards

J-K-L Accounting Definitions Flashcards

1
Q

<p>Job Order Costing</p>

A

<p>A method of cost accounting that accumulates costs for individual jobs or lots. (IMA)</p>

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2
Q

<p>Joint Probability</p>

A

<p>The probability of two or more events all occurring together. The joint probability of two independent events is calculated as the probability of the first event multiplied by the probability of the second event. (HOCK)</p>

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3
Q

<p>Joint Product Costing</p>

A

<p>A method of cost accounting used when simultaneously producing or otherwise acquiring two or more products (joint products) that must, by the nature of the process, be produced or acquired together. (Also called Common Cost.) (IMA)</p>

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4
Q

<p>Joint Venture</p>

A

<p>A business enterprise jointly undertaken by two or more companies, who share the initial investment, risks, and profits. (IMA)</p>

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5
Q

<p>Journal</p>

A

<p>A record of original entry that records transactions in chronological sequence. (IMA)</p>

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6
Q

<p>Junk Bonds</p>

A

<p>Bonds issued in leveraged buyouts and mergers and are very risky. However, they also carry the potential of very high rewards because they pay a high interest rate. (HOCK)</p>

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7
Q

<p>Just-In-Time Inventory Management</p>

A

<p>An inventory management system that is based on a manufacturing philosophy that combines purchasing, production and inventory control into one function. This reduces the level of inventory that is held within the company at all stages of production, and thereby also reduces the cost of carrying the inventory. (HOCK)</p>

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8
Q

<p>Just-In-Time Manufacturing (JIT)</p>

A

<p>A manufacturing process where products are produced or procured as they are needed rather than when they can be made. (IMA)</p>

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9
Q

<p>Kaizen</p>

A

<p>A Japanese word that means "improvement." As used in business, it implies "continuous improvement," or slow but constant incremental improvements being made in all areas of business operations. (HOCK)</p>

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10
Q

<p>Kanban</p>

A

<p>A manufacturing strategy wherein parts are produced or delivered only as needed. (IMA)</p>

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11
Q

<p>Kinked Demand Curve</p>

A

<p>A demand curve that is highly elastic for a price increase but inelastic for a price decrease, based on the assumption that rival firms will match a price reduction but not a price increase. (IMA)</p>

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12
Q

<p>Labor Efficiency Variance</p>

A

<p>Measures how much of the total variance was due to a difference in the quantity of hours that we expected to use and that quantity that was actually used. (HOCK)</p>

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13
Q

<p>Labor Rate Variance</p>

A

<p>Measures how much of the total variance was due to a difference in the labor rate between what we expected it to be per hour and what was the rate that was actually paid was. (HOCK)</p>

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14
Q

<p>Last-In-First-Out (LIFO)</p>

A

<p>A method of inventory valuation and cost flow assumption, where ending inventory is measured by assigning the most recent costs incurred to costs of goods sold, and the earliest costs to ending inventory. (IMA)</p>

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15
Q

<p>Law of Diminishing Returns</p>

A

<p>The principle that states that as increasingly more units of a variable resource are combined with a fixed amount of other resources, use of additional units of the variable resource will eventually increase output at a decreasing rate. (IMA)</p>

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16
Q

<p>Lead Time</p>

A

<p>The time expected to elapse between the date an order is placed and the date the goods or services are received. (IMA)</p>

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17
Q

<p>Leadership by Example</p>

A

<p>Leaders living and acting by the company's code of ethics, setting a good example, keeping promises and commitments, and supporting others in adhering to the code of ethics. (Also called "Tone at the Top.")</p>

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18
Q

<p>Learning Curve</p>

A

<p>A mathematical expression of the phenomenon that incremental unit costs to produce decrease as managers and labor gain experience from practice and as better methods are developed. (IMA)</p>

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19
Q

<p>Learning Rate</p>

A

<p>The rate at which learning takes place in learning curve analysis. They are developed by analyzing historical data. (HOCK)</p>

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20
Q

<p>Lease</p>

A

<p>A contract between the owner of property (Lessor) and the user (Lessee) concerning the financial and operating arrangements for the property. (IMA)</p>

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21
Q

<p>Leasehold</p>

A

<p>An asset representing the right of a Lessee (User) to use property. (IMA)</p>

22
Q

<p>Least-Squares Method</p>

A

<p>A statistical method for defining a line that best fits the data points and reflects the relationship between variables. (Also called Linear Regression.) (IMA)</p>

23
Q

<p>Ledger</p>

A

<p>A book of accounts; any book of final entry. (IMA)</p>

24
Q

<p>Legal Risk</p>

A

<p>Potential for loss arising from the uncertainty of legal proceedings, such as bankruptcy, trademark challenges, liability claims, etc. (IMA)</p>

25
Q

<p>Letter of Credit</p>

A

<p>A binding document from a bank guaranteeing that a buyer's payment will be received on time and for the correct amount. Often used in international trade to eliminate perceived risks. (IMA)</p>

26
Q

<p>Letter Of Deficiency</p>

A

<p>When there are substantial deficiencies in the registration statement, the SEC will issue a letter of deficiency, identifying the problems and informing the issuer on how to correct them. (HOCK)</p>

27
Q

<p>Leverage</p>

A

<p>The extent to which a firm is financed by debt. (IMA)</p>

28
Q

<p>Leveraged Buyout (LBO)</p>

A

<p>Form of ownership change where a company is taken private; the investor finances a significant percentage of the purchase price of the controlling interest with borrowing. (IMA)</p>

29
Q

<p>Leveraged Recapitalization</p>

A

<p>A takeover defense in which the company borrows money to pay a large, one-time dividend to shareholders. The increased debt discourages any would-be acquirer, because it inhibits them from borrowing against the company's assets to finance the acquisition. (HOCK)</p>

30
Q

<p>Liability</p>

A

<p>Probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events. (IMA)</p>

31
Q

<p>Life-Cycle Costing</p>

A

<p>The accumulation of costs for activities that occur over the entire life cycle of a product, including design and development, acquisition, operation, maintenance, and service. (IMA)</p>

32
Q

<p>Line Item Budget</p>

A

<p>A budget that classifies items of expense by the nature of the expense, such as salaries, fringe benefits, travel, etc. (IMA)</p>

33
Q

<p>Line of Business</p>

A

<p>A set of operations directed to the production and sale of a distinctive type of goods or services to customers</p>

34
Q

<p>Line of Credit</p>

A

<p>An agreement usually by a bank to make loans, not to exceed a specified total amount, when needed by a customer</p>

35
Q

<p>Linear Programming</p>

A

<p>A mathematical tool used to optimize a function (the objective function) subject to various constraints, all of which are linear. Often used to find the combination of products that will maximize profits or minimize costs</p>

36
Q

<p>Liquidation</p>

A

<p>A form of bankruptcy in which the assets of the debtor are sold (liquidated) to pay the creditors. (HOCK)</p>

37
Q

<p>Liquidity</p>

A

<p>Ability to convert an asset into cash quickly. (IMA)</p>

38
Q

<p>Liquidity Risk</p>

A

<p>The possibility that an investment cannot be sold (converted into cash) for its market value. Whenever an investment must be discounted significantly in order to be sold, the investment has a high level of liquidity risk. (HOCK)</p>

39
Q

<p>Loan Covenants</p>

A

<p>Clauses in a loan agreement that require one party to do, or refrain from doing, certain things. (IMA)</p>

40
Q

<p>Lockbox System</p>

A

<p>A system where a financial entity collects and deposits payments on behalf of an entity thereby reducing the mail and processing float. (IMA)</p>

41
Q

<p>Logical Security</p>

A

<p>Consists of access and ability to use the equipment and data. It includes Internet security (firewalls) and virus protection procedures; access controls for users to minimize actions they can perform; authentication processes to verify the identity of users; and cryptographic techniques such as encryption of messages and digital signatures. (HOCK)</p>

42
Q

<p>Long Position</p>

A

<p>The purchase of a security with the expectation that the security will rise in value. (IMA)</p>

43
Q

<p>Long Run</p>

A

<p>A time period of sufficient length to enable decision makers to adjust fully to a market change; the period of time in which all costs are variable. (IMA)</p>

44
Q

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

A

<p>Measure of the financial leverage of a firm. (IMA)</p>

45
Q

<p>Long-Term Investments</p>

A

<p>Investments that are expected to be held for more than one year. (HOCK)</p>

46
Q

<p>Long-Term Liabilities</p>

A

<p>Debts due for repayment more than one year in the future or beyond the normal operating cycle. (IMA)</p>

47
Q

<p>Loss Frequency</p>

A

<p>The measurement of how often the loss occurs, on average. (HOCK)</p>

48
Q

<p>Loss Severity</p>

A

<p>A measure of how serious a loss is when it occurs, in terms of cost. (HOCK)</p>

49
Q

<p>Losses</p>

A

<p>Decreases in equity as a result of transactions that are not part of the company's main or central operations and that do not result from expenses or distributions made to owners of the entity. (HOCK)</p>

50
Q

<p>Lower of Cost or Market Rule</p>

A

<p>A method of valuation that results in an asset being valued at either acquisition cost or market value, whichever is lower. (IMA)</p>

51
Q
A

Accounting Definitions (15 decks)

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