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Accounting Definitions > S Accounting Definitions > Flashcards

S Accounting Definitions Flashcards

1
Q

<p>Safety Stock</p>

A

<p>A quantity of inventory held to meet unanticipated demand during the time between placement of an order and its receipt into inventory, or unanticipated delays in receiving the replenishment. (IMA)</p>

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2
Q

<p>Sales Budget</p>

A

<p>A projection of sales for a given period of time. (IMA)</p>

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3
Q

<p>Sales on Installment</p>

A

<p>Arrangements in which the buyer takes possession of the property immediately but does not receive the deed and title until a series of payments (installments) have been made. (IMA)</p>

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4
Q

<p>Sales Price Variance</p>

A

<p>Measures how much of the variance between the actual Total Revenue and the static budget Total Revenue was due to the actual sales prices for each product being different from their planned sales prices. (HOCK)</p>

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5
Q

<p>Sales Variances</p>

A

<p>Variances that explain the differences between actual and budgeted amounts of revenue, variable costs, and contribution margin caused by differences between actual sales results and planned or budgeted sales results. (HOCK)</p>

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6
Q

<p>Sales-Mix Variance</p>

A

<p>The difference between budgeted and actual sales caused by a difference between the budgeted and actual proportions of products with different profit margins. (IMA)</p>

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7
Q

<p>Sales-Volume Variance</p>

A

<p>The difference between the flexible budget units and the static budget units multiplied by the budgeted unit contribution margin. (IMA)</p>

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8
Q

<p>Salvage Value</p>

A

<p>The expected value of an asset at the end of its useful life. (IMA)</p>

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9
Q

<p>Sarbanes-Oxley</p>

A

<p>A U.S. law enacted in 2002 to specify the requirements of corporate governance, including accounting issues. It addresses the regulation of the accounting profession, the standards for audit committees of public companies, the certifications management must make, and standards of internal control that companies must meet. (IMA)</p>

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10
Q

<p>Scenario Analysis</p>

A

<p>The process of estimating the expected value of a portfolio, assuming changes in key factors that would affect security values; more broadly, the process of analyzing possible future events by considering alternative possible outcomes. (IMA)</p>

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11
Q

<p>Seasonal Trend</p>

A

<p>A consistent rise or drop in business activity that occurs due to predictable changes in the calendar. (IMA)</p>

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12
Q

<p>Secondary Markets</p>

A

<p>Markets that facilitate the trading of existing securities. (HOCK)</p>

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13
Q

<p>Secondary Offering</p>

A

<p>The issuance of new stock for public sale from a company that has already made its initial public offering. (Also called Subsequent Offering.) (IMA)</p>

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14
Q

<p>Securities and Exchange Commission (SEC)</p>

A

<p>The U.S. federal agency empowered to regulate U.S. financial markets in order to protect investors. All publicly-traded companies have to comply with SEC rules and regulations, including the filing of annual, quarterly, and other disclosure reports. (IMA)</p>

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15
Q

<p>Security Market Line</p>

A

<p>The graphical representation of the CAPM equation, this line tells us what investors' required rates of return are at each level of risk. (HOCK)</p>

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16
Q

<p>Segment</p>

A

<p>One of two or more divisions, product departments, plants, or other subdivisions of an entity reporting directly to a home office, usually identified with responsibility for profit and/or producing a product or service. (IMA)</p>

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17
Q

<p>Segment Margin</p>

A

<p>A measure of the performance of each business unit. It may also be used as a measure of the long-term performance of the manager, if the manager can control the noncontrollable traceable fixed costs over a long-term period. (HOCK)</p>

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18
Q

<p>Segregation of Duties</p>

A

<p>A basic key internal control used to ensure that errors or irregularities are prevented or detected on a timely basis by employees in the normal course of business. It requires that no single individual should have control over two or more phases of a transaction or operation. (IMA)</p>

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19
Q

<p>Selling and Administrative Budget</p>

A

<p>A budget for costs related to selling or marketing (e.g., sales representatives' salaries, commissions, traveling expense, and advertising) and for the general administration of the corporation (e.g., salaries of top officers, rent, and other general office expense). (IMA)</p>

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20
Q

<p>Selling Costs</p>

A

<p>Any expense or class of expense incurred in selling or marketing. (IMA)</p>

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21
Q

<p>Selling Price Variance</p>

A

<p>A flexible budget variance for a revenue item. It is called a selling price variance, because it is caused exclusively by differences between the actual selling price and the budgeted selling price. (HOCK)</p>

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22
Q

<p>Semi-Fixed Cost</p>

A

<p>A cost that is fixed over a given, small range of activity, and above that level of activity, the cost suddenly jumps. (HOCK)</p>

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23
Q

<p>Semi-Strong-Form Efficiency</p>

A

<p>A market efficiency theory that says that security prices reflect not only historical price and trading volume information but also all other published information. An efficient market will adjust immediately to earnings announcements and other information released by a company or that could affect a company. (HOCK)</p>

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24
Q

<p>Semi-Variable Cost</p>

A

<p>A cost that has both a fixed component and a variable component. (HOCK)</p>

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25
Q

<p>Sensitivity Analysis</p>

A

<p>A technique that identifies and analyzes alternative outcomes of an investment resulting from the alteration of one or more of the variables in the analysis (Also known as What-if analysis). (IMA)</p>

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26
Q

<p>Separable Costs</p>

A

<p>For products produced in a joint process, the costs incurred beyond the split-off point that are assignable to one or more individual products. (IMA)</p>

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27
Q

<p>Serial Bonds</p>

A

<p>Bonds issued so that they mature over a period of time. Some of the bonds mature each year. This enables the issuer of the bonds to retire the bonds over a period of time without the need for a single, large cash payment and investors are able to choose the maturity period that fits their needs. (HOCK)</p>

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28
Q

<p>Service Cost Allocation</p>

A

<p>The allocation of the service departments (non-production departments) to the production departments. After these costs are allocated to the production departments, the production departments will allocate these costs along with their own overhead costs to the finished products. (HOCK)</p>

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29
Q

<p>Service Department</p>

A

<p>A unit (department) within an entity that provides services to other departments of the entity. (IMA)</p>

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30
Q

<p>Shareholder</p>

A

<p>The owner of shares in a company. (IMA)</p>

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31
Q

<p>Shareholders' Equity</p>

A

<p>The owner's equity in a corporation. (Also called Stockholders' Equity.) (IMA)</p>

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32
Q

<p>Shelf Registration</p>

A

<p>When a company goes through the registration process, but does not actually issue the shares. Rather, they will keep the shares ("on the shelf") until the market conditions are correct or the company needs to raise capital, and then the shares will be issued and sold. (HOCK)</p>

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33
Q

<p>Short Position</p>

A

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

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34
Q

<p>Short Run</p>

A

<p>A time period of insufficient length to allow decision makers to adjust fully to a change in market conditions. In the short run, producers may be able to increase output by using more labor or raw materials, but they will not have time to expand the size of their plants. (IMA)</p>

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35
Q

<p>Short-Term Credit</p>

A

<p>Credit extended to an entity by a financial institution (Bank Loan), investors (Commercial Paper) or suppliers (Trade Credit). (IMA)</p>

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36
Q

<p>Shrinkage</p>

A

<p>The loss of raw materials, work-in-process, or finished goods in terms of weight or volume due to the nature of the product or the methods employed for production, transportation, and storage. (IMA)</p>

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37
Q

<p>Sight Draft</p>

A

<p>A draft which is payable on demand. (IMA)</p>

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38
Q

<p>Simple Interest</p>

A

<p>Interest on a loan in which the interest is calculated only on the original principal amount. (HOCK)</p>

39
Q

<p>Simple Regression</p>

A

<p>A regression model that uses only one independent variable to estimate the dependent variable. (IMA)</p>

40
Q

<p>Simulation</p>

A

<p>A method of studying an operational problem, whereby a model of the system or process is subjected to a series of recalculations of possible outcomes to reflect varying assumptions. (IMA)</p>

41
Q

<p>Single-Purpose Plans</p>

A

<p>Plan developed for a specific event and that is unlikely to be used again. (HOCK)</p>

42
Q

<p>Slack</p>

A

<p>In budgeting, the difference between the costs or expenses actually required in the operation of a responsibility center and the costs or expenses that have been proposed or approved in the budget. (IMA)</p>

43
Q

<p>Smoothing</p>

A

<p>A forecasting technique that attempt to eliminate or reduce the impact of ("smooth out") random fluctuations caused by the irregular component of a time series. (HOCK)</p>

44
Q

<p>Software</p>

A

<p>A collection of computer programs and related data that provide the instructions telling a computer what to do and how to do it. (IMA)</p>

45
Q

<p>Solvency</p>

A

<p>The ability to pay all debt obligations as they become due. (IMA)</p>

46
Q

<p>Special Purpose Entity</p>

A

<p>Entities created by corporations, usually as subsidiaries but sometimes as partnerships or trusts, for a single, well-defined, and narrow purpose, usually the acquisition and financing of specific assets. (Also known as Special Purpose Vehicles.) (IMA)</p>

47
Q

<p>Speculative Risk</p>

A

<p>In investing, this is the variability of actual returns from expected returns, and this variability may be a gain or a loss. (HOCK)</p>

48
Q

<p>Spending Variance</p>

A

<p>Actual amount of overhead incurred less the expected amount based on the flexible budget for actual inputs. (IMA)</p>

49
Q

<p>Spin-Off</p>

A

<p>A new independent company created by divesting part of a parent company's assets and operations, and distributing shares in the new company to the parent company's shareholders. (IMA)</p>

50
Q

<p>Split-Off Point</p>

A

<p>The point of production beyond which the cost of separate products can be measured. Up to this point, the products were either joint products or byproducts. (IMA)</p>

51
Q

<p>Split-Up</p>

A

<p>Reorganizing a corporation whereby all capital stock and assets are exchanged for the stock of two or more newly established companies, resulting in the liquidation of the parent corporation. (IMA)</p>

52
Q

<p>Spoilage</p>

A

<p>Units that are defective and not transferred to the next process in the production process. (HOCK)</p>

53
Q

<p>Spot Rate</p>

A

<p>The exchange rate for immediate delivery of currencies or commodities exchanged; the rate of interest or price being charged currently. (IMA)</p>

54
Q

<p>Spreadsheet</p>

A

<p>A work sheet organized in the form of a matrix with rows and columns</p>

55
Q

<p>Stand-Alone Allocation Method</p>

A

<p>Costs are allocated proportionately among all users on some basis that relates to each user's proportion of the entire organization. (HOCK)</p>

56
Q

<p>Standard Cost</p>

A

<p>The anticipated cost of producing a unit of output; a predetermined cost to be assigned to products produced. Standard cost implies a norm, or what costs should be. (IMA)</p>

57
Q

<p>Standard Costing System</p>

A

<p>A cost allocation system that allocates overhead costs based on the standard number of the allocation base that should have been used in production. (HOCK)</p>

58
Q

<p>Standard Deviation</p>

A

<p>A statistical measure of the spread or dispersion of a set of data, calculated as: the square root of the arithmetic mean of the squares of the deviation of each of the class frequencies from the arithmetic mean of the frequency distribution. (IMA)</p>

59
Q

<p>Standard Error</p>

A

<p>A measure of the statistical accuracy of an estimate, equal to the standard deviation of the theoretical distribution of a large population of such estimates. (HOCK)</p>

60
Q

<p>Standing Purpose Plans</p>

A

<p>Have relevance and use for many different items and will be used more than once. (HOCK)</p>

61
Q

<p>Stars</p>

A

<p>One of the classifications of products by the Boston Consulting Group. A star is in an industry that has a high market growth rate, and the product has a high share of the market. A star generates a lot of cash because it has a high share of its market. However, because the market is growing rapidly, the star's sales are also growing rapidly. As a result, it has a high need for cash for investment. Therefore, the net amount of cash a star generates is not great. (HOCK)</p>

62
Q

<p>Start-Up Costs</p>

A

<p>The costs of preparing to operate facilities which can include costs of designing, tooling, recruiting, and training the labor force before production starts; moving; preparation of facilities; and related general and administrative costs. (IMA)</p>

63
Q

<p>Statement of Cash Flow</p>

A

<p>A statement that classifies cash receipts and payments according to whether they are the result of operating, investing, or financing activities. (IMA)</p>

64
Q

<p>Statement of Changes in Shareholders' Equity</p>

A

<p>An accounting statement presenting the individual components of Shareholders' Equity at various points in time and the changes that occurred within the individual components. (IMA)</p>

65
Q

<p>Statement of Earnings (Income Statement)</p>

A

<p>A financial statement that reports revenues, expenses, gains, and losses for an accounting period, usually compared with amounts in one or more earlier periods. (IMA)</p>

66
Q

<p>Statement of Financial Position (Balance Sheet)</p>

A

<p>The statement of financial position that discloses the assets, liabilities, and equity accounts of an entity at a particular date. Comparable information from one or more prior periods may be included. (IMA)</p>

67
Q

<p>Statement on Management Accounting (SMA)</p>

A

<p>Practice-basedmonographs on critical issues that affect the profession of management accounting, published by IMA.</p>

68
Q

<p>Static Budget</p>

A

<p>A static budget is a budget that does not change as volume changes. (IMA)</p>

69
Q

<p>Step-Down Method</p>

A

<p>The method of allocating service department costs that begins by allocating one service department's costs to production departments and to all other service departments. A second service department's costs, including costs allocated from the first, are then allocated to production departments and to all other service departments except the first one, etc. The costs of all service departments are ultimately allocated to production departments. (IMA)</p>

70
Q

<p>Stock Dividends</p>

A

<p>The payment of a dividend to shareholders in the form of stock instead of cash. (IMA)</p>

71
Q

<p>Stock Exchanges</p>

A

<p>Physical locations where buyers and sellers of stocks come together. (HOCK)</p>

72
Q

<p>Stock Option</p>

A

<p>The right to purchase or sell a specified number of shares of stock in a company for a specified price at a specified time. (IMA)</p>

73
Q

<p>Stock Rights</p>

A

<p>The right to buy newly-issued stock from the issuing company at a given price. (HOCK)</p>

74
Q

<p>Stock Split</p>

A

<p>An increase in the number of common shares outstanding resulting from the issuance of additional shares to existing shareholders without requiring payment from the shareholders. (IMA)</p>

75
Q

<p>Stock-Out Costs</p>

A

<p>The contribution margin or other measure of profits not earned because a seller has run out of inventory and is unable to fill a customer's order. (IMA)</p>

76
Q

<p>Stop Order</p>

A

<p>When a share registration statement contains untrue statements of material fact, omits material facts required, fails to provide required current and historical financial information, or has other major problems, a stop order is issued to stop the registration statement from becoming effective. (HOCK)</p>

77
Q

<p>Storage Controls</p>

A

<p>Internal controls for computer data and business information; e.g. off-site storage, locked rooms, passwords, backups, etc. (IMA)</p>

78
Q

<p>Straight-Line Method</p>

A

<p>A method of depreciating assets in which an equal amount of depreciation is taken each year over the estimated economic life of the asset. (IMA)</p>

79
Q

<p>Strategic Business Unit (SBU)</p>

A

<p>A business unit within the overall corporate entity which is distinguishable from other business units because it serves a defined external market where management can conduct strategic planning in relation to products and markets. (IMA)</p>

80
Q

<p>Strategic Planning</p>

A

<p>A process used to make decisions about the long-term goals and strategies of an organization. (IMA)</p>

81
Q

<p>Strategic Risk</p>

A

<p>The possible impact on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes. (IMA)</p>

82
Q

<p>Strike Price</p>

A

<p>Price at which a call option or put option may be exercised (carrying out the terms of agreement). (Also called Exercise Price.) (IMA)</p>

83
Q

<p>Strong-Form Efficiency</p>

A

<p>A market efficiency theory that suggests that security prices reflect all possible information, including the private information known only to insiders. This hypothesis assumes that even insider trading will not result in abnormal returns for insiders who trade, because the information they have is also already reflected in the stock's price. (HOCK)</p>

84
Q

<p>Subsidiary</p>

A

<p>A corporation that is controlled, directly or indirectly, by another corporation. The usual condition for control is ownership of a majority of the outstanding voting stock. (IMA)</p>

85
Q

<p>Sunk Costs</p>

A

<p>A past cost which cannot now be changed and therefore should not enter into current decisions for increasing or decreasing present profit levels. (IMA)</p>

86
Q

<p>Supply</p>

A

<p>The total amount of a good or service available for purchase. One of the two key determinants of price along with demand. (IMA)</p>

87
Q

<p>Sustainable Equity Growth</p>

A

<p>The maximum growth rate that a firm can sustain without having to increase financial leverage. (IMA)</p>

88
Q

<p>Sustainable Growth Rate</p>

A

<p>Maximum growth rate a firm can sustain without increasing financial leverage. (IMA)</p>

89
Q

<p>Swaps</p>

A

<p>An arrangement whereby two companies lend to each other on different terms; e.g., one at a fixed interest rate and the other at a variable interest rate. (IMA)</p>

90
Q

<p>System</p>

A

<p>In data processing, a collection of people, machines, and methods organized to accomplish a set of specific functions. (IMA)</p>

91
Q

<p>System Security Audit</p>

A

<p>An engagement that involves auditing the controls in place for information systems. (HOCK)</p>

92
Q

<p>Systematic Risk</p>

A

<p>The portion of stock price (or portfolio) movement that is attributable to the movement of the market as a whole. (Also called Market Risk.) (IMA)</p>

93
Q

<p>Systems Development</p>

A

<p>A process used to determine the needs of an information system and then designing and implementing the system to meet those needs</p>

94
Q
A

Accounting Definitions (15 decks)

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