We’ve put together a list of terms we find helpful together with accompanying links to help you as you go through your business improvement process.
Accounts (114)
allocate definition or meaning
An allocation is where two or more accounting transactions are allocated against each other. This may be perhaps a payment to a supplier or a reconciliation of an account
balance forward definition or meaning
Previous balance on an account which is carried forward over to the next billing period.
batch definition or meaning
A quantity or consignment of goods produced at one time or to arrange things in sets or groups.
definition or meaning of best and final offer
Term used in bids to indicate that no further negotiation on the amount or terms is possible. BAFO is issued often in response to the request a customer sends to the contractors or suppliers whose bids are within a close range of one another.
definition or meaning of billback
A cost recovery system in which the client or payer is charged a percentage of the total cost of equipment, services and venues of which they have already used.
definition or meaning of burden rate
The indirect costs that are associated with either employees or the inventory of the company.
cash discount definition or meaning
An incentive in the form of a percentage or fixed amount discount offered by a seller to a buyer for paying an invoice ahead of the scheduled due date.
explain what a commitment report is
You can report the total costs of a project by reporting the committed costs along with the actual costs. Committed costs are the outstanding requisitions and purchase orders charged to a project , which are not yet invoiced.
control account definition or meaning
A account used to record the balances of a number of subsidiary accounts and to provide a cross – check on them.
controllable spending definition or meaning
Costs over which the company has full authority
cost object definition or meaning
A project or department for which costs are accumulated or measured.
explain cost performance index
A measure of the financial effectiveness and efficiency of a project. It divides the budgeted cost of work completed ,or earned value , by the actual cost of the work performed.
cost plus definition or meaning
A method of establishing a selling price in which an agreed percentage is added to the cost price to cover profit.
explain credit memorandum
Document issued by the seller of goods or services to the buyer, reducing the amount that the buyer owes to the seller under the terms of an earlier invoice.
explain credit memos from the bank
A note a financial institution sends a client, informing the customer about an incremental change in account balances. Generally good news.
explain cross price elasticity
The responsiveness of demand for good X following a change in the price of a related good Y.
explain declining balance depreciation
A method in which a constant rate of depreciation is applied to an assets declining book value each year.
definition or meaning of balance depreciation formula
Declining balance method =( Net Book Value-Residual Value)*Rate of Depreciation(in *)
definition or meaning of balance method
An accelerated depreciation method that records large depreciation expenses during the earlier years of an asset’s useful life, and smaller ones in later years.
definition or meaning of agi
Artificial general intelligence. The intelligence of a machine that could successfully perform any intellectual task that a human being can.
definition or meaning of arrears
Money that is owed and should have been paid earlier.
definition or meaning of blanket
A blanket purchase order is a contractual arrangement between a buyer and a supplier, for the supplier to deliver goods and services to the buyer, at a pre- set price, for a period of time.
definition or meaning of commitment
Earmarking or setting aside of funds in response to a purchase requisition.
definition or meaning of conversion factor
The manufacturing cost of a product relative to the cost of raw materials.
definition or meaning of demand schedule
Tabulation of the quantity of a good that all consumers in a market will purchase at a given price.
definition or meaning of direct deposit
A deposit of money by a payer directly into a payee’s bank account.
definition or meaning of dunning
The process of methodically communicating with customers to ensure the collection of accounts receivable. Communications progress from gentle reminders to more demanding and firmer collection options.
definition or meaning of flex
A flex budget itemizes different expense levels depending upon changes in the amount of actual revenue.
An individual article or unit.
definition or meaning of rebate
Return of a portion of a purchase price by a seller to a buyer after the payment of the full invoice amount.
definition or meaning of retainer
A fee paid in advance to someone to secure their services for use when required.
definition or meaning of retention
Payment for a service or product that is withheld pending the completion of some specified condition.
definition or meaning of withholding tax
An amount that an employer withholds from employee’s wages and pays directly to the government.
depreciation expense formula definition or meaning
The annual depreciation expense equals the cost of the asset minus the salvage value, divided by the useful life (number of years).
double declining balance definition or meaning
A form of accelerated depreciation.
what is a double declining balance calculator
Calculate double declining balance depreciation rate and expense amount for an asset for a given year based on it’s acquisition cost, salvage value and expected useful life.
expain double declining balance depreciation
Expenses are recorded in the same period as the revenue that is earned as a result of those expenses. So when a company purchases an expensive asset that will be used for many years, it does not deduct the entire purchase price as a business expense in the year of purchase but instead deducts the price over several years.
explain double declining balance formula
Divide 100% by the number of years in the asset’s useful life, this is your straight -line depreciation rate. then multiply that number by 2 and that is your Double Declining Depreciation rate.
explain dunning notices
A collection letter sent to defaulting debtor demanding payment by the creditor.
what is estimate at completion
The forecasted cost of a project as the project progresses.
exponential smoothing calculator definition or meaning
Exponential Smoothing is used to forecast the business volume for taking appropriate decisions. This is a way of ‘Smoothing’ out the data by eliminating much of random effects.
finance charge definition or meaning
Any fee representing the cost of credit, or the cost of borrowing.
explain forecast error
The difference between the actual or real value of a product and the predicted or forecast value.
definition or meaning of functional currency
The main currency used by a business or unit of business. The currency of the primary economic environment in which the company operates.
explain geo tax
Tax authorities have jurisdiction over sales tax in a specific area. The address’s geographic area determines the tax jurisdiction and as a result the tax to be paid and the authority it is payable to.
what is a gl code
A number used to record business transactions in the general ledger
what is a gln number
Global Location Number can be used by companies to identify their locations, giving them complete flexibility to identify any type or level of location required
definition or meaning of grade range
A grading scheme is a set of criteria that measures varying levels of achievement in a course. Account-level grading schemes are grading schemes that can be defined at the account or sub-account level for the entire institution.
definition or meaning of half year convention
A way to calculate depreciation for tax purposes. A fixed asset is assumed to have been in service for one-half of it’s first year,irrespective of the actual purchase date. The remaining half year of depreciation is deducted from earnings in the final year of depreciation.
explain how to calculate accumulated depreciation
The depreciation expense charged during the current period is added to the accumulated depreciation at the beginning of the period while deducting the depreciation expense for a disposed asset.
explain how to calculate mean absolute deviation
To find the mean absolute deviation of the data, start by finding the mean of the data set. Find the sum of the data values, and divide the sum by the number of the data values. Find the absolute value of the difference between each data value and the mean. Find the sum of the absolute values of the difference.
explain how to cancel a check
The bank should be directed to put a stop payment on the check.
explain income summary
An account that receives all the temporary accounts of a business upon closing them at the end of every accounting period.
intrastat definition or meaning
The system for collecting information and producing statistics on the trade in goods between countries of the European Union.
explain inventory cost
All costs associated with holding or storing inventory for sale.
explain inventory write off
The formal recognition of a company’s inventory that no longer has value.
job level definition or meaning
Job levels are catagories of authority in an organization. Each level is typically associated with a sale ray range and a series of job titles.
definition or meaning of landed cost
The total price of a product or shipment once it has arrived at a buyer’s doorstep.
explain ledger definition
The principal book or computer file for recording and totaling
definition or meaning of macrs table
The Modified Accelerated Cost Recovery System (MACRS) is the current tax depreciation system in the US. The capital cost of tangible property is recovered over a specified life by annual deductions for depreciation .
definition or meaning of the mad formula
Mean Absolute Deviation is the average of the absolute value, or the difference between actual values and their average value, and is used for the calculation of demand variability.
order processing definition or meaning
The workflow associated with the picking, packing and delivery of the packed items to a shipping carrier.
explain outbound meaning
Outbound cash flow is any money a company or individual must pay out when conducting a transaction with another party.
payed definition or meaning
To settle (a debt, obligation,etc.), as by transferring money or goods. To give over (a certain amount of money) in exchange for something.
explain payment advice
A document sent by a customer to the supplier of a product or a service informing the supplier of the payment of their invoice or bill.
explain prenote direct deposit
A test transaction that gets sent to the bank to make sure that the provided employee account information is valid before setting up a direct deposit transfer to pay the employee.
what is prorated salary
The proportion or percentage a part-time employee would receive if he worked full-time.
recurring definition or meaning
A type of business transaction that is repeated frequently, often at fixed intervals. For example monthly rent.
replenish definition or meaning
Inventory replenishment is an operation that consists in making the stock full again in order to avoid stock -out.
safety stock definition or meaning
An additional quantity of an item held in inventory in order to reduce the risk that the item will be out of stock.
explain the sum of the years digits
An accelerated method for calculating an asset’s depreciation.
explain the sum of the years digits formula
The remaining useful life of the asset is divided on a particular date by the sum of the year’s digits.
explain the sum of years digits depreciation
The method used to accelerate the recognition of depreciation. Most of the depreciation is recognized in the first few years of iuse
what is a suspense account
An account in the books of an organization in which items are entered temporarily before allocation to the correct or final account.
definition or meaning of the contribution margin ratio
The difference between a company’s sales and variable expenses, expressed as a percentage.
unrealized definition or meaning
A transaction that has occurred but has not been consummated by a payment.
utilization formula definition or meaning
The proportion of the available time ( expressed usually as a percentage ) that a piece of equipment or a system is operating. Formula : Operating hours x 100 / available hours.
explain voided check definition
A check that has been cancelled and therefore rendered null and void.
ex[plain what retro pay means
Retroactive pay is compensation you owe an employee for work performed during a previous pay period when you have paid them less than you should.
explain what is a burden
The burden rate is the allocation rate at which indirect costs are applied to the direct costs of either labor or inventory.
explain what is a calendar
The period for which books are balanced and the financial statements are prepared.
explain what is a debit memo
A commercial document issued by a buyer to a seller as a means of formally requesting a credit note.
A check written by the drawer for a date in the future.
explain what is a receiver
Someone who is appointed by a court of law to manage the affairs of a business, usually when it is facing financial failure.
explain what is absence
Employees time off with pay for vacations, holidays and sick day.
explain what is an allocation
To spread an expense over more than one accounting period.
explain what is an encumbrance
A claim against a property by a party that is not the owner.
definition or meaning of arrears
Money that is owed and should have been paid earlier.
definition or meaning of capitalization
The provision of capital for a company or the conversion of income or assets into capital.
definition or meaning of currency
A system of money in general use in a particular country.
explain what is eoq
Economic order quantity is the order quantity that minimizes the total holding costs and ordering costs.
explain what is ers
Evaluated Receipt Settlement ( ERS) is a procedure for the automatic settlement of goods receipts.
explain what is labor
The employees and temporary help who work directly on a manufacturer’s products.
explain what is override
Commission received by a sales manager on the sales made by sales persons working under him or her.
Stated value or face value.
explain what is a reference number
A unique identifier assigned to any financial transaction.
explain what is a remittance advice
A letter sent by a customer to a supplier to inform the supplier that their invoice has been paid.
explain what is retro pay
Retroactive or back pay is income owed to an employee from a previous pay period. This can be for a number reasons i.e. Incorrect salary compensation or a pay increase.
explain what is triangulation
A situation that involves a sale of goods, where three different member states in the EU are invoved and where there are two sales transactions but one transport transaction.
explain what type of account is accumulated depreciation
An asset account with credit balance. This means that it appears on the balance sheet as a reduction from the gross amount of fixed assets reported.
definition or meaning of lump sum contracts
A lump sum contract (or stipulated sum contract) is the traditional means of procuring construction, and still the most common form of construction contract. Under a lump sum contract, a single ‘lump sum’ price for all the works is agreed before the works begin.
definition or meaning of work assignment
A specified task or amount of work assigned or undertaken.
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Accounts (114)
allocate definition or meaning
An allocation is where two or more accounting transactions are allocated against each other. This may be perhaps a payment to a supplier or a reconciliation of an account
balance forward definition or meaning
Previous balance on an account which is carried forward over to the next billing period.
batch definition or meaning
A quantity or consignment of goods produced at one time or to arrange things in sets or groups.
definition or meaning of best and final offer
Term used in bids to indicate that no further negotiation on the amount or terms is possible. BAFO is issued often in response to the request a customer sends to the contractors or suppliers whose bids are within a close range of one another.
definition or meaning of billback
A cost recovery system in which the client or payer is charged a percentage of the total cost of equipment, services and venues of which they have already used.
definition or meaning of burden rate
The indirect costs that are associated with either employees or the inventory of the company.
cash discount definition or meaning
An incentive in the form of a percentage or fixed amount discount offered by a seller to a buyer for paying an invoice ahead of the scheduled due date.
explain what a commitment report is
You can report the total costs of a project by reporting the committed costs along with the actual costs. Committed costs are the outstanding requisitions and purchase orders charged to a project , which are not yet invoiced.
control account definition or meaning
A account used to record the balances of a number of subsidiary accounts and to provide a cross – check on them.
controllable spending definition or meaning
Costs over which the company has full authority
cost object definition or meaning
A project or department for which costs are accumulated or measured.
explain cost performance index
A measure of the financial effectiveness and efficiency of a project. It divides the budgeted cost of work completed ,or earned value , by the actual cost of the work performed.
cost plus definition or meaning
A method of establishing a selling price in which an agreed percentage is added to the cost price to cover profit.
explain credit memorandum
Document issued by the seller of goods or services to the buyer, reducing the amount that the buyer owes to the seller under the terms of an earlier invoice.
explain credit memos from the bank
A note a financial institution sends a client, informing the customer about an incremental change in account balances. Generally good news.
explain cross price elasticity
The responsiveness of demand for good X following a change in the price of a related good Y.
explain declining balance depreciation
A method in which a constant rate of depreciation is applied to an assets declining book value each year.
definition or meaning of balance depreciation formula
Declining balance method =( Net Book Value-Residual Value)*Rate of Depreciation(in *)
definition or meaning of balance method
An accelerated depreciation method that records large depreciation expenses during the earlier years of an asset’s useful life, and smaller ones in later years.
definition or meaning of agi
Artificial general intelligence. The intelligence of a machine that could successfully perform any intellectual task that a human being can.
definition or meaning of arrears
Money that is owed and should have been paid earlier.
definition or meaning of blanket
A blanket purchase order is a contractual arrangement between a buyer and a supplier, for the supplier to deliver goods and services to the buyer, at a pre- set price, for a period of time.
definition or meaning of commitment
Earmarking or setting aside of funds in response to a purchase requisition.
definition or meaning of conversion factor
The manufacturing cost of a product relative to the cost of raw materials.
definition or meaning of demand schedule
Tabulation of the quantity of a good that all consumers in a market will purchase at a given price.
definition or meaning of direct deposit
A deposit of money by a payer directly into a payee’s bank account.
definition or meaning of dunning
The process of methodically communicating with customers to ensure the collection of accounts receivable. Communications progress from gentle reminders to more demanding and firmer collection options.
definition or meaning of flex
A flex budget itemizes different expense levels depending upon changes in the amount of actual revenue.
An individual article or unit.
definition or meaning of rebate
Return of a portion of a purchase price by a seller to a buyer after the payment of the full invoice amount.
definition or meaning of retainer
A fee paid in advance to someone to secure their services for use when required.
definition or meaning of retention
Payment for a service or product that is withheld pending the completion of some specified condition.
definition or meaning of withholding tax
An amount that an employer withholds from employee’s wages and pays directly to the government.
depreciation expense formula definition or meaning
The annual depreciation expense equals the cost of the asset minus the salvage value, divided by the useful life (number of years).
double declining balance definition or meaning
A form of accelerated depreciation.
what is a double declining balance calculator
Calculate double declining balance depreciation rate and expense amount for an asset for a given year based on it’s acquisition cost, salvage value and expected useful life.
expain double declining balance depreciation
Expenses are recorded in the same period as the revenue that is earned as a result of those expenses. So when a company purchases an expensive asset that will be used for many years, it does not deduct the entire purchase price as a business expense in the year of purchase but instead deducts the price over several years.
explain double declining balance formula
Divide 100% by the number of years in the asset’s useful life, this is your straight -line depreciation rate. then multiply that number by 2 and that is your Double Declining Depreciation rate.
explain dunning notices
A collection letter sent to defaulting debtor demanding payment by the creditor.
what is estimate at completion
The forecasted cost of a project as the project progresses.
exponential smoothing calculator definition or meaning
Exponential Smoothing is used to forecast the business volume for taking appropriate decisions. This is a way of ‘Smoothing’ out the data by eliminating much of random effects.
finance charge definition or meaning
Any fee representing the cost of credit, or the cost of borrowing.
explain forecast error
The difference between the actual or real value of a product and the predicted or forecast value.
definition or meaning of functional currency
The main currency used by a business or unit of business. The currency of the primary economic environment in which the company operates.
explain geo tax
Tax authorities have jurisdiction over sales tax in a specific area. The address’s geographic area determines the tax jurisdiction and as a result the tax to be paid and the authority it is payable to.
what is a gl code
A number used to record business transactions in the general ledger
what is a gln number
Global Location Number can be used by companies to identify their locations, giving them complete flexibility to identify any type or level of location required
definition or meaning of grade range
A grading scheme is a set of criteria that measures varying levels of achievement in a course. Account-level grading schemes are grading schemes that can be defined at the account or sub-account level for the entire institution.
definition or meaning of half year convention
A way to calculate depreciation for tax purposes. A fixed asset is assumed to have been in service for one-half of it’s first year,irrespective of the actual purchase date. The remaining half year of depreciation is deducted from earnings in the final year of depreciation.
explain how to calculate accumulated depreciation
The depreciation expense charged during the current period is added to the accumulated depreciation at the beginning of the period while deducting the depreciation expense for a disposed asset.
explain how to calculate mean absolute deviation
To find the mean absolute deviation of the data, start by finding the mean of the data set. Find the sum of the data values, and divide the sum by the number of the data values. Find the absolute value of the difference between each data value and the mean. Find the sum of the absolute values of the difference.
explain how to cancel a check
The bank should be directed to put a stop payment on the check.
explain income summary
An account that receives all the temporary accounts of a business upon closing them at the end of every accounting period.
intrastat definition or meaning
The system for collecting information and producing statistics on the trade in goods between countries of the European Union.
explain inventory cost
All costs associated with holding or storing inventory for sale.
explain inventory write off
The formal recognition of a company’s inventory that no longer has value.
job level definition or meaning
Job levels are catagories of authority in an organization. Each level is typically associated with a sale ray range and a series of job titles.
definition or meaning of landed cost
The total price of a product or shipment once it has arrived at a buyer’s doorstep.
explain ledger definition
The principal book or computer file for recording and totaling
definition or meaning of macrs table
The Modified Accelerated Cost Recovery System (MACRS) is the current tax depreciation system in the US. The capital cost of tangible property is recovered over a specified life by annual deductions for depreciation .
definition or meaning of the mad formula
Mean Absolute Deviation is the average of the absolute value, or the difference between actual values and their average value, and is used for the calculation of demand variability.
order processing definition or meaning
The workflow associated with the picking, packing and delivery of the packed items to a shipping carrier.
explain outbound meaning
Outbound cash flow is any money a company or individual must pay out when conducting a transaction with another party.
payed definition or meaning
To settle (a debt, obligation,etc.), as by transferring money or goods. To give over (a certain amount of money) in exchange for something.
explain payment advice
A document sent by a customer to the supplier of a product or a service informing the supplier of the payment of their invoice or bill.
explain prenote direct deposit
A test transaction that gets sent to the bank to make sure that the provided employee account information is valid before setting up a direct deposit transfer to pay the employee.
what is prorated salary
The proportion or percentage a part-time employee would receive if he worked full-time.
recurring definition or meaning
A type of business transaction that is repeated frequently, often at fixed intervals. For example monthly rent.
replenish definition or meaning
Inventory replenishment is an operation that consists in making the stock full again in order to avoid stock -out.
safety stock definition or meaning
An additional quantity of an item held in inventory in order to reduce the risk that the item will be out of stock.
explain the sum of the years digits
An accelerated method for calculating an asset’s depreciation.
explain the sum of the years digits formula
The remaining useful life of the asset is divided on a particular date by the sum of the year’s digits.
explain the sum of years digits depreciation
The method used to accelerate the recognition of depreciation. Most of the depreciation is recognized in the first few years of iuse
what is a suspense account
An account in the books of an organization in which items are entered temporarily before allocation to the correct or final account.
definition or meaning of the contribution margin ratio
The difference between a company’s sales and variable expenses, expressed as a percentage.
unrealized definition or meaning
A transaction that has occurred but has not been consummated by a payment.
utilization formula definition or meaning
The proportion of the available time ( expressed usually as a percentage ) that a piece of equipment or a system is operating. Formula : Operating hours x 100 / available hours.
explain voided check definition
A check that has been cancelled and therefore rendered null and void.
ex[plain what retro pay means
Retroactive pay is compensation you owe an employee for work performed during a previous pay period when you have paid them less than you should.
explain what is a burden
The burden rate is the allocation rate at which indirect costs are applied to the direct costs of either labor or inventory.
explain what is a calendar
The period for which books are balanced and the financial statements are prepared.
explain what is a debit memo
A commercial document issued by a buyer to a seller as a means of formally requesting a credit note.
A check written by the drawer for a date in the future.
explain what is a receiver
Someone who is appointed by a court of law to manage the affairs of a business, usually when it is facing financial failure.
explain what is absence
Employees time off with pay for vacations, holidays and sick day.
explain what is an allocation
To spread an expense over more than one accounting period.
explain what is an encumbrance
A claim against a property by a party that is not the owner.
definition or meaning of arrears
Money that is owed and should have been paid earlier.
definition or meaning of capitalization
The provision of capital for a company or the conversion of income or assets into capital.
definition or meaning of currency
A system of money in general use in a particular country.
explain what is eoq
Economic order quantity is the order quantity that minimizes the total holding costs and ordering costs.
explain what is ers
Evaluated Receipt Settlement ( ERS) is a procedure for the automatic settlement of goods receipts.
explain what is labor
The employees and temporary help who work directly on a manufacturer’s products.
explain what is override
Commission received by a sales manager on the sales made by sales persons working under him or her.
Stated value or face value.
explain what is a reference number
A unique identifier assigned to any financial transaction.
explain what is a remittance advice
A letter sent by a customer to a supplier to inform the supplier that their invoice has been paid.
explain what is retro pay
Retroactive or back pay is income owed to an employee from a previous pay period. This can be for a number reasons i.e. Incorrect salary compensation or a pay increase.
explain what is triangulation
A situation that involves a sale of goods, where three different member states in the EU are invoved and where there are two sales transactions but one transport transaction.
explain what type of account is accumulated depreciation
An asset account with credit balance. This means that it appears on the balance sheet as a reduction from the gross amount of fixed assets reported.
definition or meaning of lump sum contracts
A lump sum contract (or stipulated sum contract) is the traditional means of procuring construction, and still the most common form of construction contract. Under a lump sum contract, a single ‘lump sum’ price for all the works is agreed before the works begin.
definition or meaning of work assignment
A specified task or amount of work assigned or undertaken.
