Copy of `NYSSPCA - Accounting title`
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NYSSPCA - Accounting title
Category: Economy and Finance > Accountaning Terminology
Date & country: 23/08/2008, USA
Words: 510
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RepairsEXPENDITURES made in order to keep property in good condition but that do not appreciably prolong the life or increase the value of the property.
ReplacementsEXPENDITURES for making good or whole the portions of property that have deteriorated through use or have been destroyed through accident.
Report Release DateThe date the company's financial statements are issued.
Repos- See REPURCHASE AGREEMENT.
Repurchase Agreement (Repos)- Agreement whereby an institution purchases SECURITIES under a stipulation that the seller will repurchase the securities within a certain time period at a certain price.
Research and Development (R&D)- Research is a planned activity aimed at discovery of new knowledge with the hope of developing new or improved products and services. Development is the translation of research findings into a plan or design of new or improved products and services.
Reserve- ACCOUNT used to earmark a portion of EQUITY or fund balance to indicate that it is not available for expenditure. An obsolete term in the United States. More commonly used in Europe.
Resident AlienThis is an individual that is not a citizen, but who has a residence in the United States. They are taxed on all of their INCOME worldwide in the same manner a citizen of the United States is.
Restricted Assets- Cash or other ASSETS whose use in whole or in part is restricted for specific purposes bound by virtue of contracted agreements.
Restricted Fund- Fund established to account for assets whose income must be used for purposes established by donors or grantors of such ASSETS. (See FUND ACCOUNTING and UNRESTRICTED FUNDS.)
Restructuring- Reorganization within an entity. Restructuring may occur in the form of changing the components of CAPITAL, renegotiating the terms of DEBT agreements, etc.
Retained Earnings- Accumulated undistributed earnings of a company retained for future needs or for future distribution to its owners.
Return on Investment (ROI)- Ratio measure of the profits achieved by a firm through its basic operations. An indicator of management's general effectiveness and efficiency. The simplest version is the ratio of NET INCOME to total ASSETS.
Revenue Recognition- Method of determining whether or not income has met the conditions of being earned and realized or is realizable.
Revenues- Sales of products, merchandise, and services; and earnings from INTEREST, DIVIDEND, rents.
Review- Accounting service that provides some assurance as to the reliability of financial information. In a review, a CERTIFIED PUBLIC ACCOUNTANT (CPA) does not conduct an examination under GENERALLY ACCEPTED AUDITING STANDARDS (GAAS).
Review Engagement- Agreement between a CERTIFIED PUBLIC ACCOUNTANT (CPA) and his or her client to perform a review. (See ACCOUNTANTS' REPORT.)
Review Report- See ACCOUNTANTS' REPORT.
Right to Setoff- DEBTOR'S legal right, to discharge all or a portion of the DEBT owed to another party by applying against the debt an amount that the other party owes to the debtor.
Risk Management- Process of identifying and monitoring business risks in a manner that offers a risk/return relationship that is acceptable to an entity's operating philosophy.
ROI- See RETURN ON INVESTMENT.
Routine TransactionsRecurring financial activities reflected in the accounting records in the normal course of business.
Safe Harbor Rule- Concept in statutes and regulations whereby a person who meets listed requirements will be preserved from adverse legal action. Frequently, safe harbors are used where a legal requirement is somewhat ambiguous and carries a risk of punishment for an unintended violation.
Sale-Leaseback Transaction- Sale of property by a seller who simultaneously leases the property back from the purchaser.
Salvage Value- Selling price assigned to retired FIXED ASSETS or merchandise unsalable through usual channels.
SAS- See STATEMENTS ON AUDITING STANDARDS.
SEC- See SECURITIES AND EXCHANGE COMMISSION.
SEC Filings- Financial and informational DISCLOSURES required by the SEC in order to comply with certain sections of the Securities Act of 1933 and the Securities and Exchange Act of 1934. Some of the more common filings that publicly owned companies must submit are the FORM 10-K, FORM 10-Q and FORM 8-K.
SEC Registration Statement- DISCLOSURE document that must be filed with the SEC in connection with a public offering of SECURITIES, unless the offering is exempt.
Security- Any kind of transferable certificate of ownership including EQUITY SECURITIES and DEBT SECURITIES.
Securitization-Source of financing whereby an entity's ASSETS (typically mortgage loans, lease obligations or other types of RECEIVABLES) are placed in a special purpose vehicle that issues SECURITIES collateralized by such assets.
Security Interest- Legal interest of one person in the property of another to assure performance of a second person under a contract.
Settlement Method- Method of ACCOUNTING for SECURITIES whereby transactions are recorded on the date the securities settle by the delivery or receipt of securities and the receipt or payment of cash.
SFAS- See STATEMENT OF FINANCIAL ACCOUNTING STANDARDS.
Short Sale- Sale of an item before it is purchased. A person entering into a short sale believes the price of the item will decline between the date of the short sale and the date he or she must purchase the item to deliver the item under the terms of the short sale.
Short-Term- Current; ordinarily due within one year.
Significant Findings or IssuesSubstantive matters that are important to the procedures performed, evidence obtained, or conclusions reached and include but are not limited to:
Single Audit Act- The Single Audit Act of 1984 and the Single Audit Act Amendments of 1996 establish requirements for audits of states, local governments, and nonprofit organizations that administer federal financial assistance programs above a certain threshold.
Simple PlansAn employer may adopt a simplified retirement plan called a SIMPLE Plan (Savings incentive match plan for employees) if it has fewer than 100 employees that received at least $5,000 in compensation in the preceding year.
Simple TrustThis type of TRUST is required to distribute all its income currently, whether or not the TRUSTEE actually does so, and it has no provision in the trust instrument for charitable contributions. It is to be distinguished from a COMPLEX TRUST. A trust may be a simple trust in one year and a complex trust in another year. In the year in which the trus...
Small Business StockNoncorporate investors may exclude up to 50 percent of the GAIN they realize on the disposition of qualified small business stock issued after Aug. 10, 1993, and held for more than five years. The amount of gain eligible for the 50 percent exclusion is subject to per-issuer limits. In order to qualify for the EXCLUSION, the CORPORATION issuing the ...
Sole Proprietorship- See PROPRIETORSHIP.
Special Assessment- Charge made by a local government for the cost of an improvement or service. It is usually levied on those who will benefit from the service.
Special Report- Special report is a term applied to AUDITORs' reports issued in connection with various types of financial presentations, including: Financial statements that are prepared in conformity with a comprehensive basis of accounting other than generally accepted accounting principles. Specified elements, accounts or items of a financial statement. Comp...
Spinoff- Transfer of all, or a portion of, a subsidiary's stock or other ASSETS to the stockholders of its parent company on a PRO RATA basis.
Spot Market- Market for buying and selling commodities or financial instruments for immediate delivery and payment based on the settlement conventions of the particular market.
Spread- Difference between two prices, usually a buying and selling price.
SSARS- See STATEMENTS ON STANDARDS FOR ACCOUNTING AND REVIEW SERVICES.
Standard DeductionIndividual taxpayers who do not itemize their deductions are entitled to a standard deduction amount by which to reduce ADJUSTED GROSS INCOME in arriving at taxable income. The amount of the standard deduction varies by the type of the taxpayer and changes each year. A schedule of standard deductions is easily found in the instructions for the fede...
Start-up Costs- (1) Costs, excluding acquisition costs, incurred to bring a new unit into production. (2) Costs incurred to begin a business.
Stated Value- Per share amount set by the BOARD OF DIRECTORS to be placed in the CAPITAL STOCK account upon issuance of NO-PAR VALUE.
Statement of Cash Flows- A statement of cash flows is one of the basic financial statements that is required as part of a complete set of financial statements prepared in conformity with generally accepted accounting principles. It categorizes net cash provided or used during a period as operating, investing and financing activities, and reconciles beginning and ending c...
Statement of Financial Condition- Basic FINANCIAL STATEMENT, usually accompanied by appropriate DISCLOSURES that describe the basis of ACCOUNTING used in its preparation and presentation as of a specified date, the entity's ASSETS, LIABILITIES and the EQUITY of its owners. Also known as BALANCE SHEET.
Statute of LimitationsThis sets out the period within which actions may be brought upon claims or within which rights may be enforced. As it pertains to tax returns, the statute of limitations is generally three years from the date a return is due or filed.
Stepped Up BasisGenerally, the basis of property acquired by INHERITENCE, BEQUEST or device from a DECENDANT is the FAIR MARKET VALUE of the property on the date of the decendant's death. Thus if the fair market value is more than the decedent's basis, a taxpayers basis in the property received is stepped-up.
Stock Compensation Plan- FRINGE BENEFIT that gives employees the option to purchase the employer's stock at a specified price during a specified period.
Stock Option- Right to purchase or sell a specified number of shares of stock at specified prices and times.
Stock RightsStock rights are rights issued to stockholders of a CORPORATION that entitle them to purchase new shares of stock in the corporation for a stated price that is often substantially less than the FAIR MARKET VALUE of the stock. These rights may be exercised by paying the stated price, may be sold, or may be allowed to expire or lapse. Stock rights ar...
Stock Split- Increase in the number of shares of a company's COMMON STOCK outstanding that result from the issuance of additional shares proportionally to existing stockholders without additional capital investment. The PAR VALUE of each share is reduced proportionally.
Straight-Line Depreciation- ACCOUNTING method that reflects an equal amount of wear and tear during each period of an ASSET'S useful life. For instance, the annual STRAIGHT-LINE DEPRECIATION of a $2,500 asset expected to last five years is $500. (See ACCELERATED DEPRECIATION.)
Strike Price- Price of a financial instrument at which conversion or exercise occurs.
Subsequent Event- Material event that occurs after the end of the accounting period and before the publication of an entity's FINANCIAL STATEMENTS. Such events are disclosed in the notes to the financial statements. (See MATERIALITY.)
Surviving SpouseThis is a person whose husband or wife died during the tax year. A surviving spouse may file a JOINT RETURN for the year in which the death occurred. In addition a joint return may be filed for the two succeeding tax years if during that time the surviving spouse:
Swap- Financial contract in which two parties agree to exchange net streams of payments over a specified period. The payments are usually determined by applying different indices (e.g., interest rates, foreign exchange rates, equity indices) to a NOTIONAL amount. The term notional is used because swap contracts generally do not involve exchanges of PRI...
Tangible Asset- ASSETS having a physical existence, such as cash, land, buildings, machinery, or claims on property, investments or goods in process. (See INTANGIBLE ASSETS.)
Tax- Charge levied by a governmental unit on income, consumption, wealth, or other basis.
Tax CourtThe U.S. Tax Court is a legislative court functioning to adjudicate controversies between taxpayers and the IRS arising out of deficiencies assessed by the IRS for INCOME, GIFT, ESTATE, windfall profit and certain EXCISE TAXES. It has no jurisdiction over other taxes such as employment taxes. Various sales taxes and certain excise taxes.
Tax Lien- ENCUMBRANCE placed on property as security for unpaid taxes.
Tax Shelter- Arrangement in which allowable tax deductions or EXCLUSIONS result in the deferral of tax on INCOME that would otherwise be payable currently.
Taxable IncomeTaxable income is generally equal to a taxpayer's ADJUSTED GROSS INCOME during the TAX YEAR less any allowable EXEMPTIONS and deductions.
Tenancy-in-Common- Co-ownership of property. In a valid tenancy-in-common, a deceased co-owner's title passes to his or her heirs without being included in the estate of the deceased co-owner.
Term Loan- Loan for a specified time period.
Total Gain- Excess of the proceeds realized on the sale of either INVENTORY or noninventory goods.
Trade Date- Date when a SECURITY transaction is entered into, to be settled on at a later date. Transactions involving financial instruments are generally accounted for on the trade date.
Transferred BasisA transferred basis is the basis of property in the hands of a transferor, donor or GRANTOR. In this sense a prior owner's basis in the property is transferred to the taxpayer. Transferred basis occurs in the following transactions: GIFTS, transfers in trusts, certain transfers to controlled CORPORATIONS, contributions to PARTNERSHIPS and LIQUIDATI...
Transferee LiabilityA person may be held LIABLE for another taxpayer's delinquent taxes if:
Treasury Bill- Short-term obligation that bears no INTEREST and is sold at a discount.
Treasury Bond- Long-term obligation that matures more than five years from issuance and bears INTEREST.
Treasury Instruments- Direct financial obligations of the United States government. (See TREASURY BILL; TREASURY BOND; TREASURY NOTE; TREASURY STOCK.)
Treasury Note- Intermediate-term obligation that matures one to five years from issuance and bears INTEREST.
Treasury Stock- Stock reacquired by the issuing company. It may be held indefinitely, retired, issued upon exercise of STOCK OPTIONS or resold.
Troubled Debt Restructuring- Agreement between DEBTOR and CREDITOR which amends the terms of a DEBT that has little chance of being paid in accordance with its contractual terms. The agreement may involve the transfer of ASSETS in full or partial satisfaction of the debt.
Trust- Ancient legal practice where one person (the GRANTOR) transfers the legal title to an ASSET, called the principal or corpus, to another person (the TRUSTEE), with specific instructions about how the corpus is to be managed and disposed.
Trustee- Person who is given legal title to, and management authority over, the property placed in a trust.
Unaudited Financial Statements- FINANCIAL STATEMENTS which have not undergone a detailed AUDIT examination by an independent CERTIFIED PUBLIC ACCOUNTANT (CPA).
Unearned Income- Payments received for services which have not yet been performed.
Uniform Accountancy Act (UAA)- The UAA is the proposal for a new regulatory framework for the public accounting profession which was developed jointly by the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA). The new framework is intended to enhance interstate reciprocity and practice across state lin...
Uniform Capitalization RulesThese are a set of rules intended to be a single comprehensive set of rules to govern the capitalization, or inclusion in INVENTORY of direct and indirect cost of producing, acquiring and holding property. Under the rules, taxpayers are required to capitalize the direct costs and an allocable portion of the indirect costs attributable to real and t...
Unqualified Opinion- AUDIT opinion not qualified for any material scope restrictions nor departures from GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP). The AUDITOR may issue an unqualified opinion only when there are no identified material weaknesses and when there have been no restrictions on the scope of the auditor's work. Also known as CLEAN OPINION.
Unrestricted Funds- Resources of a not-for-profit entity that have no restrictions as to use or purpose. (See FUND ACCOUNTING and RESTRICTED FUND.)
Valuation Allowance- Method of lowering or raising an object's CURRENT VALUE by adjusting its acquisition cost to reflect its market value by use of a CONTRA ACCOUNT.
Variable Rate Loan- Loan whose interest rate changes over its life in relation to the level of an index.
Variance- Deviation or difference between an estimated value and the actual value.
Venture Capital- Investment company whose primary objective is capital growth. New ASSETS invested largely in companies that are developing new ideas, products, or processes.
Vesting- Point at which certain benefits available to an employee are no longer contingent on the employee continuing to work for the employer.
WalkthroughsThe most effective means for an AUDITOR to confirm his understanding how internal control over financial reporting is designed and operates to evaluate and test its effectiveness. It includes making inquiries of and observing the personnel who actually perform the controls; reviewing documents that are used in, and that result from, the application...
Warrant- Option to purchase additional SECURITIES from the issuer.
Wash Sale -A wash sale occurs if stock or securities are sold at a LOSS and the seller acquires substantially identical stock or SECURITIES 30 days before or after the sale. Stock or securities for this purpose includes contracts or operations to acquire or sell stock or securities. Losses incurred in a wash sale cannot be deducted. It does not matter if the ...
Withholding- Amount withheld or deducted from employee salaries by the employer and paid by the employer, for the employee, to the proper authority.
Withholding AllowanceEach taxpayer is allowed to claim a withholding allowance, which exempts a certain amount of wages from being subject to WITHHOLDING. The allowance is designed to prevent too much taxes being withheld from a taxpayers wages and a person can compute this by completing form W-4 and submitting it to their employer.
