Part 3 Flashcards
The banking system that is made up of the European Central Bank and the local central banks of the 27 member states of the European Union.
European System of Central Banks (ESCB)
A method of mitigating risks by matching the maturities of liabilities to the maturities of assets.
Maturity matching
A set of standards used as the basis for many countries’ national accounting requirements.
International financial reporting standards (IFRS)
A tax that applies the equivalent of a sales tax to every operation that creates value.
Value-added tax (VAT)
In a database, the field used to identify an entity, such as employee number.
Key field
An accounting system in which an organization recognizes revenue only when cash is received and expenses only when cash is paid out.
Cash basis accounting
A computer network of local-area networks for a city, campus, or other medium-sized area.
Metropolitan-area network (MAN)
Reducing and eliminating variations (defects) from a desired outcome (the target value).
Conformance
Securities traded on an organized exchange with standardized contracts.
Exchange-traded securities
A type of unemployment caused by ups and downs in the business cycle, specifically by a lack of demand for labor.
Cyclical unemployment
Liabilities that satisfy two criteria: the amount of the loss can be estimated reasonably, and all available information implies that it is probable a liability will exist on or before the financial statement date.
Contingent liabilities
IT controls that determine and mitigate risks to critical assets, sensitive data, or operations, including standards, organizational structure, and physical and environmental controls.
Management controls
A cost measurement system that records the actual costs incurred for direct materials, direct labor, and overhead (by allocating actual amounts).
Actual costing system
When the US Federal Reserve System buys or sells government securities (bonds, notes, and bills) in the open market from the public.
Open market operations
An IT control related to the specific functioning of an application system that supports a specific business process.
Application control
A measurement of the amount of resources consumed by an activity.
Resource cost driver
Existing situations or circumstances with an uncertain potential for gain or loss; tied to certain future events that may or may not occur.
Contingencies
The accumulated net incomes (losses) that have been retained in an organization.
Undistributed earnings
The software interface between the hardware and the applications and end user.
Operating system (O/S)
A project scheduling technique that divides a project into sequential activities with estimated start and completion times.
Horizontal bar chart
Quotations of the number of units of one currency needed to exchange for a unit of a different currency.
FX rates
A legal minimum on the price of a good or service.
Price floor
A hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction.
Foreign currency exposure hedge
A product pricing strategy that uses a relatively low market entry price in order to attract large numbers of buyers to win a large market share.
Market penetration pricing
The maximum amount of a good that may be imported to a country in a given time period.
Import quotas
Any tax for which the tax base is the value of a good, service, or property.
Ad valorem tax
In terms of networking hardware, a physical connection point to a device.
Port
A type of contract that requires a contractor to successfully perform the contract and deliver supplies or services for a price agreed to up front.
Lump sum contract
Determined by deducting the weighted average cost of capital from after-tax net income plus interest expense.
Economic value added (EVA)
Dividends that pay shares of stock, reclassifying a portion of retained earnings as paid-in capital instead of reducing total assets or shareholders’ equity.
Stock dividends
A transfer pricing model that sets transfer prices at the unit’s variable cost, or the actual cost to produce the good or service less all fixed costs.
Variable cost model
Contract that provides a lessee (the renter) less than total interest in a property or good owned by the lessor (the lender of the item).
Lease
A type of pension plan that defines the required annual contribution to the plan but makes no guarantee of the ultimate benefit level paid.
Defined contribution plan
The excess of the price paid for a subsidiary over the fair value of the subsidiary’s net assets.
Goodwill
The difference in costs between any two alternatives.
Incremental costs
A system of internal controls for managing the availability of computer and other resources and data after a processing disruption.
Contingency planning
A costing system that assigns costs to a specific job (a distinct unit, batch, or lot of a product or service).
Job costing
A government’s use of taxes and spending to achieve its macroeconomic goals.
Fiscal policy
Costs yet to be incurred that differ between alternatives.
Relevant costs
Detective controls that find errors and verify the accuracy and reasonableness of output data after processing is complete.
Output controls
Type of analysis that helps managers understand the interrelationships among cost, volume, and profit by focusing on the interactions among prices of products, volume or level of activity, per unit variable costs, total fixed costs, and mix of products sold.
Cost-volume-profit (CVP) analysis
Any factor that has a cause-and-effect relationship with costs, such as a rise in sales volume that affects a rise in sales commissions.
Allocation base
A type of analysis that looks at the gap between the organization and benchmark competitor that has the best quality in the industry.
Gap analysis
Bonds issued by tax-exempt state or local governments to finance public projects.
Industrial revenue bonds
A type of budget that is used when a project is completely separate from other elements of an organization or is the only element of a company.
Project budget
The existence of barriers to free trade.
Protectionism
The historical costs paid for goods or services.
Actual costs
Prudence and adequate consideration of the risks and uncertainty in business situations when presented with situations that require judgment.
Conservatism
A hardware control in which a process is done twice and compared.
Duplicate process check
Bonds secured by real estate.
First mortgage bonds
A network topology in which each device is wired to a central device that routes data to or from other devices, eliminating the need to wire between devices.
Star network
Trade barriers such as licensing requirements, unrealistic quality standards, or undue amounts of red tape in customs.
Nontariff trade barriers (NTBs)
A method of theoretically making a risk-free profit from the price differences between markets through the simultaneous purchase of an investment in one market and sale in another.
Arbitrage
A type of conformance that requires all products or services to meet a target value exactly, with no variation.
Robust quality conformance
Bonds that have staggered maturity dates.
Serial bonds
A budget that includes the total and per unit production cost for a period.
Cost of goods sold budget
An online tool set for employees.
Business-to-employee (B2E) e-commerce
A smoothing method that uses the average of the most recent data value set of a given time period.
Moving averages method
Government protection granted to authors and artists of all types.
Copyright
The party in a derivative transaction who is attempting to reduce an underlying business risk (usually loss of profitability).
Hedger
Type of asset-backed security in which finance companies (acting as factors) purchase receivables and collect payments from customers directly, also charging a fee to the seller to compensate for bad debts.
Pledging receivables/factoring
A comprehensive manufacturing production and inventory control methodology in which materials arrive exactly as they are needed for each stage of the production process.
Just-in-time (JIT) manufacturing
A system for pricing products or services that are transferred from one organizational subunit to another within the same organization.
Transfer pricing
Policies that address factors that will, over time, increase the potential of full-capacity output of the economy.
Supply-side policies
A learning curve analysis model that measures increased efficiency by adding the incremental time for each unit to the previous total time; average time per unit is then calculated by dividing total time by the number of units.
Incremental unit-time learning model
A pricing approach that uses the average product or service cost as the base and then adds a percentage to cover additional costs and provide a profit.
Cost-based pricing
A balance that is prepared after closing to show that debits and credits of the real accounts (assets, liabilities, and shareholders’ equity) are equal.
Post-close trial balance
The installation of released bug fixes to applications that are already in production.
Patch management
A method of defining how messages should be sent through a network so that unrelated products can work together.
Open Systems Interconnection (OSI) reference model
A project scheduling technique that divides a project into sequential activities with estimated start and completion times.
Milestone chart
A network that is similar to an intranet but is designed for customers, external partners, or suppliers.
Extranet
Being able to conduct transactions within a firm; facilitates transfer of technology from one branch of the company to another without selling the technology.
Internalization
A type of budget that starts with zero dollars allocated to budget items rather than making incremental changes to already existing allocations.
Zero-based budget
All the items that cannot be included in product costs and must be expensed in the period in which they occur.
Nonmanufacturing costs
A type of budget that determines the required materials and the quality level of the materials used to meet production.
Direct materials budget
Software that allows multiple perspectives for a set of data to be analyzed.
Online analytical processing (OLAP)
The use of similar standards and techniques across organizations so that users can differentiate real similarities and differences from those caused by divergent accounting rules.
Comparability
A pricing approach that takes competitors’ prices into account.
Competition-based pricing
A type of chart that illustrates trends and results over a specified period of time.
Run chart
A type of evidence that is the result of an experiment conducted outside or inside the court under circumstances similar to those giving rise to the issue in the case.
Experimental evidence
The illegal use of sensitive information to impersonate an individual over computer networks in order to defraud the person or commit a crime without the perpetrator’s true identity being known.
Identity theft
The process of reducing all temporary or nominal accounts to zero so they are ready to be used in the next period.
Closing
The amount an asset could be acquired for (or sold) or a liability incurred (or settled), assuming willing parties that are not involved in a liquidation.
Fair market value
An accounting principle that states that when practical to do so, expenses should be recognized in the period in which the corresponding revenues are recognized.
Matching principle
The amount of additional time an activity can consume without delaying a project past the expected completion date.
Slack time
Bonds that carry zero or very low interest but are instead issued at a substantial discount from par value, resulting in amortized discounts (a tax deduction) to maturity and no payments until maturity.
Zero-coupon bonds
A type of budget that includes all production costs other than direct materials and direct labor.
Manufacturing overhead budget
IT controls that are used once errors, fraud, or other control issues have been detected.
Corrective controls
Regulations regarding the minimum amount of resources that banks must hold against deposits.
Reserve requirements
A type of firewall that serves as an intermediary for communications between the external world and private internal servers; intercepts external packets and, after inspection, relays a version of the information, called a proxy, to the private server, and vice versa.
Application gateway/proxy server
Tax levied on the profit released upon the sale of a capital asset.
Capital gains tax
Payments a government makes to a business that exports goods; the firm will export the good up to the point at which the domestic price exceeds the foreign price by the amount of the subsidy.
Export subsidies
The sales price of an asset, usually inventory, less the costs of completion and transportation or disposal that can be predicted within reason.
Net realizable value (NRV)
A forecasting model that attempts to develop forecasts through group consensus.
Delphi method
An encryption method in which a sender creates an encryption key and sends it to a trusted receiver, who can use it to decrypt all messages in that session.
Symmetric encryption
The exclusive right to sell, use, or manufacture something for a period of 20 years.
Patent
A system in which the exchange rates for currencies are determined by market supply and demand as are the prices of other financial assets such as stocks and bonds.
Floating exchange rate
An appraisal method that encourages employees to help set objectives for themselves by defining what they hope to achieve within a specific period of time.
Management by objectives (MBO) appraisal method
A type of computer network that is a direct connection between two computers.
Peer-to-peer network
Disbursement accounts that are maintained at a zero balance.
Zero-balance accounts (ZBAs)
The European Union’s financing institution; provides financing for capital investment furthering European Union policy objectives.
European Investment Bank (EIB)
A language used for Internet applications; it is accessible by any type of computer platform, allows new tags to be defined, has interactive elements, and eases interapplication communication.
Extensible markup language (XML)
An analytical method in which random fluctuations from the irregular component of the time series are averaged out.
Smoothing
Unpaid expenses that accrue as a liability until paid, including salaries, rents, etc.
Accrued expenses
A secure and expensive type of electronic funds transfer; operated by Federal Reserve System.
Fedwire
Assigning costs to a cost object.
Allocation
A period of at least six months after a peak and before a trough during which the economy declines as measured by gross domestic product.
Recession
Sets both a maximum and a minimum value for an adjustable interest rate, with one end protecting the buyer and the other end the seller.
Collar
A strategic measurement and management system that links long-term strategic planning objectives with day-to-day activities; measures financial performance, customer knowledge, internal business processes, and learning and growth.
Balanced scorecard (BSC)
In a database, a collection of related records.
File
Use open Internet protocols and standards to create stand-alone, modular software called services that are capable of describing themselves and integrating with other similar services.
Web services
A hybrid costing system that incorporates elements of job costing and process costing; assigns direct materials to each job or batch but assigns direct labor and overhead in a manner similar to process costing.
Operation costing
The absence of artificial barriers to trade among different nations.
Free trade
Analyzing past and present data in order to project the future.
Forecasting
An economic element applied or used to perform activities (such as salaries and materials).
Resource
A regular pattern of expansion (recovery) and contraction (recession) in the level of economic activity.
Business cycle
A type of budget that is concerned with direct purchases of material components and finished goods.
Direct materials purchase budget
A projection of expected sales in units and expected selling prices.
Sales budget
A cost measurement system in which costs are assigned to products using quantity and price standards for direct materials, direct labor, and overhead using a predetermined (standard) rate.
Standard costing system
A quality tool that uses a visual to map out a list of factors that are thought to affect a problem or a desired outcome.
Cause-and-effect diagram
In a database, the specific data in fields.
Data items
Evidence produced by expert scientific techniques such as experiments, chemical evaluation, and other tests.
Scientific evidence
Stock that has been repurchased by the issuing organization, reducing both assets and stockholders’ equity.
Treasury stock
In a database, a record that relates to a person, place, or thing.
Entity
Performance appraisal methods in which the appraiser directly compares the performance of each employee with that of others.
Comparative methods
All the items that cannot be included in product costs and must be expensed in the period in which they occur.
Period costs
Evidence in the form of a representation of an object, such as photos, x-rays, movies, maps, etc., that clarifies a witness’s testimony and that is substantially similar to the “real” object at issue in the case.
Demonstrative evidence
A type of firewall that enhances packet filtering by monitoring packet flows in general.
Stateful inspection
The decrease in the purchasing power of money and the increase in the general price level for goods and services.
Inflation
An independent, nonprofit group under authority of the US Securities and Exchange Commission that sets accounting standards.
Financial Accounting Standards Board (FASB)
A percentage of the amount paid for some purchases of goods and services.
Sales tax
A type of control that involves a check to see if information in an entry field is complete.
Field check
An integrated quality management system that involves managers and employees and uses quantitative methods to continually improve an organization’s processes.
Total quality management (TQM)
The sum of all infrastructure and applications required to connect two or more network nodes (computers and devices).
Computer network
A rate of exchange for currency that does not rise or fall.
Fixed exchange rate
An issue of bonds that all have the same maturity date.
Term bonds
The amount remaining from sales revenue after variable expenses are deducted.
Contribution margin
Any assets that do not qualify as current assets.
Noncurrent assets
A collection of analytical techniques that examine and measure the basic elements of processes in order to understand their activities, relationships, and contributions to organizational goals.
Process analysis
The practice of manufacturers inducing their wholesalers to carry more inventory than they can reasonably sell.
Trade loading
A financial ratio that includes all outstanding obligations a company owes its creditors.
Accounts payable turnover ratio
A two-dimensional graphic representation of an operation in terms of the flow of activity through the process.
Process-flow analysis
Two-dimensional graphic representations of an operation in terms of the flow of activity through a process using graphic elements to represent tasks, flow, and inventory (storage).
Process flowcharts
Allows transfer of large files between computers on a network or the Internet.
File Transfer Protocol (FTP)
The use of fixed interest in the form of debt or preferred equity stock with the expectation of earning a greater return than the cost of the fixed interest.
Trading on the equity
A smoothing method that assumes that the most recent data has more power of prediction than data that came before, so more weight is given to the most recent data.
Weighted moving average
A secure method of connecting two points on the Internet, often run by an Internet service providers.
Virtual private network (VPN)
An organization that provides connection to the Internet via a TCP/IP (Transmission Control Protocol/Internet Protocol) connection or provides network services (IP network).
Internet service provider (ISP)
A method of determining the impact of warrants and other options that assumes that they are converted at the start of the year or when they become available but that the proceeds are used by the organization to repurchase as many shares as possible.
Treasury stock method
A period characterized by an expansion in the economy during which employment and economic output increase.
Recovery
Cash and cash equivalents and assets held for sale or expected to be realized in the current operating cycle or within one year of the balance sheet date.
Current assets
An asset’s original cost less its salvage value.
Depreciable base
A type of unemployment that exists when there is enough demand to provide full employment but the types of demand don’t match the available labor force.
Structural unemployment
The combination of the present values of separate cash flows.
Yield-to-maturity (YTM)
Statements that express the results for the same organization over several periods as a percentage of a base year, with other years shown as the percentage increase or decrease from the base year.
Horizontal common-size financial statements
Networking hardware that combines multiple channels into a single channel, such as multiple phone lines sharing a single physical phone line.
Multiplexer
A powerful computer with high bandwidth dedicated to a specific task such as providing access to files or managing the common application needs of an organization.
Server
The executive body of the European Union.
European Commission (EC)
An IT control that applies generally to the IT environment or overall mix of systems, networks, data, people, and processes.
General control
A type of firewall that stops traffic flowing to a specific application such as File Transfer Protocol.
Gateway firewall
Sets a minimum value for an adjustable interest rate.
Floor
Symbols or words that distinguish an organization or product.
Trade names
An agreement to buy foreign currency in the future at a price determined by the forward market, often as a fair value hedge against the cash flow variability from changes in exchange rates.
Forward exchange contract
