Accounting dictionary A–Z
Every term defined across our reference guides, in one alphabetical index. Each entry links through to the guide where it is defined in full context.
231 entries across 6 guides
1
- 150-hour ruleCPA Glossary
- The requirement in most US jurisdictions that a candidate complete 150 semester hours of education to be licensed as a CPA — more than a standard four-year bachelor's degree.
A
- ABCFinance Acronyms
- Allocating overhead according to the activities that consume resources rather than by a single volume measure.
- Above-the-line deductionUS Tax Dictionary
- A deduction subtracted from gross income to arrive at adjusted gross income, available whether or not the taxpayer itemises.
- ACCAFinance Acronyms
- A global professional accountancy body headquartered in the UK, offering an internationally recognised qualification.
- Accounting equationAccounting Terms
- Assets = Liabilities + Equity. The identity that must hold on every balance sheet, and the basis of double-entry bookkeeping.
- Accounting equationAccounting Formulas
- The identity underpinning double-entry bookkeeping. It must hold after every transaction.
- Accounts payableAccounting Terms
- Amounts a business owes suppliers for goods or services already received but not yet paid for. A current liability.
- Accounts receivableAccounting Terms
- Amounts customers owe a business for goods or services already delivered but not yet paid for. A current asset.
- Accrual basis accountingAccounting Terms
- Recognising revenue when it is earned and expenses when they are incurred, regardless of when cash moves. Required under both US GAAP and IFRS for general-purpose financial statements.
- Accumulated depreciationAccounting Terms
- The total depreciation charged against a fixed asset since acquisition. A contra-asset account that reduces the asset's carrying amount.
- Active vs inactive licenceCPA Glossary
- An active licence permits practice and requires ongoing continuing education; an inactive licence restricts practice and typically carries reduced CPE obligations.
- Activity-based costingCMA Glossary
- ABC. Assigning overhead to products based on the activities that drive those costs, rather than a single volume-based allocation rate.
- Adjusted gross incomeUS Tax Dictionary
- AGI. Total gross income less specific above-the-line deductions. Used as the basis for many phase-outs and limitations.
- AGIFinance Acronyms
- Total gross income less specified above-the-line deductions, used as the basis for many US tax limitations.
- AICPACPA Glossary
- The American Institute of Certified Public Accountants. The professional body that develops and scores the Uniform CPA Examination.
- AICPAFinance Acronyms
- The US professional body that develops and scores the Uniform CPA Examination.
- AmortisationAccounting Terms
- The systematic allocation of the cost of an intangible asset over its useful life. The intangible-asset equivalent of depreciation.
- APFinance Acronyms
- Amounts a business owes its suppliers for goods or services already received.
- APRFinance Acronyms
- The yearly cost of borrowing expressed as a percentage, including certain fees as well as interest.
- ARFinance Acronyms
- Amounts owed to a business by its customers for goods or services already delivered.
- AssetAccounting Terms
- A resource controlled by an entity as a result of past events, from which future economic benefits are expected to flow.
- Asset turnoverAccounting Formulas
- Revenue generated per unit of assets. Measures how intensively the asset base is used.
- AUDCPA Glossary
- Auditing and Attestation. The CPA exam section covering audit engagements, ethics, internal control, evidence and reporting.
- AUDFinance Acronyms
- The CPA exam core section covering audit engagements, ethics, internal control and reporting.
- AuditUS Tax Dictionary
- An IRS examination of a return and supporting records to verify that income, deductions and credits have been reported correctly.
- Authorization to TestCPA Glossary
- The ATT. Confirmation from a state board that a candidate is approved to sit specified exam sections, issued before the Notice to Schedule.
B
- Balance sheetAccounting Terms
- A financial statement showing an entity's assets, liabilities and equity at a single point in time. Also called the statement of financial position.
- Balanced scorecardCMA Glossary
- A performance management framework measuring an organisation across financial, customer, internal process, and learning and growth perspectives.
- BARCPA Glossary
- Business Analysis and Reporting. A CPA discipline section covering financial statement analysis, technical accounting and government accounting.
- BARFinance Acronyms
- A CPA exam discipline section covering financial analysis, technical accounting and government accounting.
- BasisUS Tax Dictionary
- A taxpayer's investment in an asset for tax purposes, used to compute gain or loss on disposal and limits on deductible losses.
- Below-the-line deductionUS Tax Dictionary
- A deduction taken from adjusted gross income, comprising either the standard deduction or itemised deductions.
- Book valueAccounting Terms
- The value of an asset as recorded in the accounts: original cost less accumulated depreciation and any impairment.
- Break-even point in salesAccounting Formulas
- The sales revenue at which operating profit is zero.
- Break-even point in unitsAccounting Formulas
- The sales volume at which total revenue equals total costs and operating profit is zero.
C
- C corporationUS Tax Dictionary
- A corporation taxed as a separate entity under Subchapter C, with earnings potentially taxed again as dividends when distributed to shareholders.
- Capital expenditureAccounting Terms
- Spending to acquire or improve a long-term asset. Capitalised on the balance sheet and expensed over time rather than charged to the current period.
- Capital gainUS Tax Dictionary
- The gain on disposal of a capital asset. Classified as short-term or long-term depending on the holding period, with different rates applying.
- CAPMFinance Acronyms
- A model estimating an asset's expected return from the risk-free rate, its beta and the market risk premium.
- Carrying amountAccounting Terms
- The amount at which an asset or liability is recognised in the balance sheet after deducting accumulated depreciation, amortisation and impairment losses.
- Cash basis accountingAccounting Terms
- Recognising revenue and expenses only when cash is received or paid. Simpler than accrual accounting but not permitted under US GAAP or IFRS for most reporting entities.
- CFAFinance Acronyms
- An investment-management credential awarded by the CFA Institute.
- CFOFinance Acronyms
- The executive responsible for an organisation's financial planning, reporting and risk management.
- Chart of accountsAccounting Terms
- The structured list of every account an entity uses to record transactions, organised by assets, liabilities, equity, revenue and expenses.
- CIAFinance Acronyms
- The internal audit credential awarded by the Institute of Internal Auditors.
- Circular 230US Tax Dictionary
- Treasury Department regulations governing practice before the IRS, setting the duties and restrictions applying to enrolled agents, CPAs and attorneys.
- CMACMA Glossary
- Certified Management Accountant. An IMA credential focused on management accounting and financial management rather than public accounting and audit.
- CMAFinance Acronyms
- The IMA credential focused on management accounting and financial management.
- CMA entrance feeCMA Glossary
- The one-time fee paid to enter the CMA program, separate from the per-part exam registration fees.
- COGSFinance Acronyms
- The direct costs of producing the goods sold during a period.
- Contra accountAccounting Terms
- An account that offsets the balance of a related account, such as accumulated depreciation against a fixed asset or allowance for doubtful accounts against receivables.
- Contribution marginCMA Glossary
- Sales revenue less variable costs. The amount available to cover fixed costs and contribute to profit.
- Contribution marginAccounting Formulas
- The amount available to cover fixed costs and then contribute to profit.
- Contribution margin ratioAccounting Formulas
- The proportion of each sales dollar available to cover fixed costs and profit.
- Core sectionsCPA Glossary
- The three sections every CPA candidate must pass: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Taxation and Regulation (REG).
- COSOFinance Acronyms
- The body whose framework is the standard reference for internal control and enterprise risk management.
- Cost of capitalCMA Glossary
- The return an organisation must earn on an investment to maintain the value of its equity and satisfy its providers of finance.
- Cost of goods soldAccounting Terms
- The direct costs of producing the goods a business sold during a period, including materials and direct labour. Subtracted from revenue to give gross profit.
- Cost-volume-profit analysisCMA Glossary
- CVP. Analysis of how changes in volume, selling price, variable cost and fixed cost affect operating profit, including break-even determination.
- CPAFinance Acronyms
- The US accounting licence granted by a state board of accountancy.
- CPECPA Glossary
- Continuing Professional Education. The ongoing training licensed CPAs must complete to maintain an active licence, with requirements set by each state board.
- CPEFinance Acronyms
- Ongoing training required to maintain a professional accounting licence.
- CreditAccounting Terms
- An entry on the right side of a ledger account. Credits increase liabilities, equity and revenue, and decrease assets and expenses.
- Credit evaluationCPA Glossary
- Assessment of a candidate's academic transcripts against a state board's education requirements. Internationally educated candidates typically need an evaluation from an approved agency.
- Credit windowCPA Glossary
- The period during which a candidate must pass the remaining sections after passing their first, before the earliest passed section expires. The length is set by the jurisdiction.
- Current ratioAccounting Formulas
- Short-term liquidity. A ratio below 1 indicates current liabilities exceed current assets.
- CVPFinance Acronyms
- Analysis of how volume, price and cost structure interact to determine operating profit.
D
- Days inventory outstandingAccounting Formulas
- The average number of days inventory is held before sale.
- Days sales outstandingAccounting Formulas
- The average number of days taken to collect payment after a sale.
- DCFFinance Acronyms
- A valuation method computing present value by discounting projected future cash flows.
- DebitAccounting Terms
- An entry on the left side of a ledger account. Debits increase assets and expenses, and decrease liabilities, equity and revenue.
- Debt-to-equity ratioAccounting Formulas
- Financial leverage. Higher values mean greater reliance on borrowing relative to owners' capital.
- Deferred revenueAccounting Terms
- Cash received before the related goods or services have been delivered. Recorded as a liability until the revenue is earned.
- Degree of operating leverageAccounting Formulas
- How sensitive operating profit is to a change in sales. Higher leverage magnifies both gains and losses.
- DependentUS Tax Dictionary
- A qualifying child or qualifying relative who meets the relationship, residency, support and other tests, entitling the taxpayer to certain benefits.
- DepreciationAccounting Terms
- The systematic allocation of a tangible fixed asset's cost over its useful life, reflecting consumption of its economic benefits.
- Depreciation recaptureUS Tax Dictionary
- The rule requiring gain on disposal of depreciable property to be treated as ordinary income to the extent of depreciation previously deducted.
- Direct costCMA Glossary
- A cost that can be traced economically and unambiguously to a specific cost object, such as direct materials or direct labour.
- Discipline sectionCPA Glossary
- The fourth CPA exam section, chosen by the candidate from Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP).
- Double-declining balance depreciationAccounting Formulas
- An accelerated method charging more depreciation in early years, applied to book value rather than depreciable base.
- Double-entry bookkeepingAccounting Terms
- The convention that every transaction is recorded in at least two accounts, with total debits equal to total credits, keeping the accounting equation in balance.
E
- EAFinance Acronyms
- A tax practitioner licensed by the US Treasury with unlimited IRS representation rights.
- Earnings per shareAccounting Formulas
- Profit attributable to each ordinary share.
- EBITFinance Acronyms
- Operating profit before financing costs and income tax.
- EBITDAFinance Acronyms
- A measure of operating performance excluding financing, tax and non-cash charges.
- Economic value addedCMA Glossary
- EVA. Net operating profit after tax less a charge for the capital employed, measuring value created above the cost of capital.
- Economic value addedAccounting Formulas
- Profit remaining after charging for the capital used. Positive EVA means value has been created.
- Enrolled AgentUS Tax Dictionary
- A tax practitioner licensed by the US Department of the Treasury with unlimited rights to represent taxpayers before the IRS in any state.
- EPSFinance Acronyms
- Net income attributable to ordinary shareholders divided by the weighted average shares outstanding.
- EquityAccounting Terms
- The residual interest in an entity's assets after deducting its liabilities. Comprises contributed capital and retained earnings.
- ERPFinance Acronyms
- Integrated software managing an organisation's core processes, including finance and accounting.
- Essay sectionCMA Glossary
- The written portion of each CMA exam part, presented after the multiple-choice section, requiring constructed responses to scenario-based prompts.
- Estimated taxUS Tax Dictionary
- Quarterly payments of tax on income not subject to withholding, required where liability would otherwise exceed a threshold at filing.
- Ethics examCPA Glossary
- A separate ethics examination required by many state boards in addition to the Uniform CPA Examination, usually taken after passing all four sections.
- EVAFinance Acronyms
- Net operating profit after tax less a charge for capital employed.
- ExpenseAccounting Terms
- A decrease in economic benefits during a period through outflows or depletion of assets, or the incurring of liabilities, that decreases equity.
- Experience requirementCPA Glossary
- The period of supervised, verified professional accounting experience a candidate must complete before a state board will issue a licence.
F
- Fair valueAccounting Terms
- The price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.
- FARCPA Glossary
- Financial Accounting and Reporting. The CPA exam section covering the financial reporting framework, financial statement accounts and transactions.
- FARFinance Acronyms
- The CPA exam core section covering the financial reporting framework and financial statement accounts.
- FASBFinance Acronyms
- The body that sets US Generally Accepted Accounting Principles.
- FIFOAccounting Terms
- First-in, first-out. An inventory costing method assuming the earliest units purchased are the first sold, leaving the most recent costs in closing inventory.
- FIFOFinance Acronyms
- An inventory costing method assuming the earliest units acquired are sold first.
- Filing statusUS Tax Dictionary
- The category determining a taxpayer's standard deduction and rate brackets: single, married filing jointly, married filing separately, head of household, or qualifying surviving spouse.
- Fixed costCMA Glossary
- A cost that does not change in total within a relevant range of activity, though it changes per unit as volume changes.
- Flexible budgetCMA Glossary
- A budget restated for the actual level of activity achieved, allowing variances to be separated from the effect of volume differences.
- Form 1040US Tax Dictionary
- The US Individual Income Tax Return, the primary form on which individuals report income and compute federal income tax.
- Form 1065US Tax Dictionary
- The US Return of Partnership Income, an information return through which a partnership reports results that flow through to its partners.
- Form 1120US Tax Dictionary
- The US Corporation Income Tax Return, filed by C corporations to report income and compute corporate income tax.
G
- GAAPFinance Acronyms
- The financial reporting framework applicable in a jurisdiction; in the US, set by the FASB.
- Going concernAccounting Terms
- The assumption that an entity will continue operating for the foreseeable future and is not intending or required to liquidate. Underpins the basis on which financial statements are prepared.
- GoodwillAccounting Terms
- The excess of consideration transferred in a business combination over the fair value of the identifiable net assets acquired. Tested for impairment rather than amortised under US GAAP.
- Gross profitAccounting Terms
- Revenue less cost of goods sold, before operating expenses, interest and tax.
- Gross profitAccounting Formulas
- Profit before operating expenses, showing how much each sales dollar contributes after direct production costs.
- Gross profit marginAccounting Formulas
- The proportion of revenue remaining after direct costs. Indicates pricing power and production efficiency.
I
- IASBFinance Acronyms
- The body that issues International Financial Reporting Standards.
- IFRSFinance Acronyms
- The accounting standards issued by the IASB and used in much of the world outside the United States.
- IIAFinance Acronyms
- The global professional body for internal auditors and awarding body of the CIA.
- IMACMA Glossary
- The Institute of Management Accountants. The professional body that awards and administers the CMA (Certified Management Accountant) certification.
- IMAFinance Acronyms
- The professional body that awards the CMA certification.
- IMA membershipCMA Glossary
- Active IMA membership, which is a prerequisite for entering the CMA program and for sitting the exam parts.
- ImpairmentAccounting Terms
- A reduction in an asset's recoverable amount below its carrying amount, recognised as a loss in the income statement.
- Income statementAccounting Terms
- A financial statement reporting revenue, expenses and profit or loss over a period. Also called the profit and loss account or statement of operations.
- Installment agreementUS Tax Dictionary
- An arrangement permitting a taxpayer to pay an outstanding tax liability in periodic payments over time rather than in a single sum.
- Intangible assetAccounting Terms
- An identifiable non-monetary asset without physical substance, such as a patent, trademark, licence or software.
- Interest coverage ratioAccounting Formulas
- How many times operating profit covers interest obligations. Lower values signal greater default risk.
- Internal rate of returnCMA Glossary
- IRR. The discount rate at which an investment's net present value equals zero, used to compare project returns.
- International testingCPA Glossary
- Delivery of the Uniform CPA Examination at Prometric centres outside the United States, available to candidates who meet a participating jurisdiction's eligibility rules.
- InventoryAccounting Terms
- Goods held for sale in the ordinary course of business, in the process of production, or as materials to be consumed in production.
- Inventory turnoverAccounting Formulas
- How many times inventory is sold and replaced in a period. Low turnover may indicate obsolete stock.
- IPOFinance Acronyms
- The first sale of a company's shares to the public on a stock exchange.
- IRRFinance Acronyms
- The discount rate at which an investment's net present value is zero.
- IRSFinance Acronyms
- The US federal agency responsible for tax collection and enforcement.
- ISCCPA Glossary
- Information Systems and Controls. A CPA discipline section covering IT audit, data management, security and system controls.
- ISCFinance Acronyms
- A CPA exam discipline section covering IT audit, data management and system controls.
- Itemised deductionsUS Tax Dictionary
- Specific deductible expenses — such as qualifying mortgage interest, state and local taxes and charitable contributions — claimed in place of the standard deduction.
J
- Journal entryAccounting Terms
- The record of a single transaction in the accounting system, listing the accounts debited and credited and the amounts.
K
- KPIFinance Acronyms
- A quantified measure used to track progress against an objective.
L
- Labour efficiency varianceAccounting Formulas
- The portion of the labour variance caused by using more or fewer hours than standard.
- Labour rate varianceAccounting Formulas
- The portion of the labour variance caused by paying a different wage rate than standard.
- LiabilityAccounting Terms
- A present obligation arising from past events, the settlement of which is expected to result in an outflow of economic benefits.
- LicensureCPA Glossary
- The grant of the CPA licence by a state board, permitting use of the CPA designation. Distinct from passing the exam, which alone does not confer the title.
- LIFOFinance Acronyms
- An inventory costing method assuming the most recently acquired units are sold first. Permitted under US GAAP but not IFRS.
- LiquidityAccounting Terms
- How readily an asset can be converted to cash, or how well an entity can meet its short-term obligations as they fall due.
M
- MACRSUS Tax Dictionary
- The Modified Accelerated Cost Recovery System. The prescribed method for depreciating most tangible business property for US federal tax purposes.
- Margin of safetyAccounting Formulas
- How far sales can fall before the business reaches break-even.
- Marginal tax rateUS Tax Dictionary
- The rate applied to the last dollar of taxable income. Distinct from the effective rate, which is total tax divided by total income.
- Master budgetCMA Glossary
- The comprehensive set of interrelated budgets covering operations, capital spending and financing, culminating in budgeted financial statements.
- Matching principleAccounting Terms
- The principle that expenses should be recognised in the same period as the revenues they helped generate.
- MaterialityAccounting Terms
- The threshold above which an omission or misstatement could reasonably be expected to influence the decisions of users of the financial statements.
- Materials price varianceAccounting Formulas
- The portion of the materials variance caused by paying more or less than standard per unit.
- Materials quantity varianceAccounting Formulas
- The portion of the materials variance caused by using more or less material than standard.
- MobilityCPA Glossary
- The ability of a CPA licensed in one jurisdiction to practise in another without obtaining an additional licence, where the jurisdictions recognise substantial equivalency.
- Multistage adaptive testingCPA Glossary
- The design under which the difficulty of a later multiple-choice testlet depends on performance in an earlier one. Applies to the multiple-choice portion of the exam.
N
- NASBACPA Glossary
- The National Association of State Boards of Accountancy. Coordinates between the individual state boards, operates CPA Central and issues the Notice to Schedule.
- NASBAFinance Acronyms
- The body coordinating between US state boards of accountancy on CPA examination administration.
- Net incomeAccounting Terms
- Total revenue less total expenses, including interest and tax, for a period. The bottom line of the income statement.
- Net present valueCMA Glossary
- NPV. The present value of an investment's expected cash inflows less the present value of its outflows, discounted at the required rate of return.
- Net present valueAccounting Formulas
- Present value of future cash flows less the outlay. A positive NPV indicates the project adds value at the chosen discount rate.
- Net profit marginAccounting Formulas
- The proportion of revenue converted to profit after all expenses, interest and tax.
- Notice to ScheduleCPA Glossary
- The NTS. The document issued after an application is approved that authorises a candidate to book a specific exam section at Prometric. It carries an expiry date.
- NPVFinance Acronyms
- The present value of an investment's cash inflows less the present value of its outflows.
- NTSFinance Acronyms
- The document authorising a CPA candidate to book a specific exam section.
O
- Offer in compromiseUS Tax Dictionary
- An agreement settling a tax liability for less than the amount owed, available where collection in full is doubtful or would cause economic hardship.
- Operating expensesAccounting Terms
- Costs incurred in normal business operations that are not directly attributable to producing goods, such as rent, salaries and marketing.
- Operating marginAccounting Formulas
- The proportion of revenue remaining after operating expenses, before interest and tax.
P
- P&LFinance Acronyms
- The income statement, reporting revenue, expenses and profit over a period.
- Part 1CMA Glossary
- Financial Planning, Performance and Analytics. The CMA exam part covering external reporting, planning and budgeting, performance management, cost management, internal controls and technology and analytics.
- Part 2CMA Glossary
- Strategic Financial Management. The CMA exam part covering financial statement analysis, corporate finance, decision analysis, risk management, investment decisions and professional ethics.
- Pass-through entityUS Tax Dictionary
- An entity — such as a partnership, S corporation or LLC taxed as either — whose income is not taxed at entity level but flows through to its owners' returns.
- PCAOBFinance Acronyms
- The body overseeing audits of US public companies.
- Penalty abatementUS Tax Dictionary
- Relief from an assessed penalty where the taxpayer demonstrates reasonable cause, or qualifies for administrative relief such as first-time abatement.
- Power of attorneyUS Tax Dictionary
- Authorisation, filed on Form 2848, permitting a representative to act on a taxpayer's behalf before the IRS.
- Prepaid expenseAccounting Terms
- A payment made for goods or services to be received in a future period. Recorded as an asset and expensed as the benefit is consumed.
- Price-to-earnings ratioAccounting Formulas
- What the market pays per unit of current earnings. Reflects growth expectations as well as risk.
- PrometricCPA Glossary
- The testing provider that operates the centres where the CPA exam is delivered, including international locations.
- PTINUS Tax Dictionary
- Preparer Tax Identification Number. The identifier the IRS requires of anyone who prepares federal tax returns for compensation.
- PTINFinance Acronyms
- The IRS identifier required of paid federal tax return preparers.
Q
- Qualified business income deductionUS Tax Dictionary
- A deduction available to owners of pass-through businesses, computed as a percentage of qualified business income and subject to income-based limitations.
- Quick ratioAccounting Formulas
- Liquidity excluding inventory, which may not convert to cash quickly. Also called the acid-test ratio.
R
- Receivables turnoverAccounting Formulas
- How many times receivables are collected in a period. Measures credit control effectiveness.
- ReciprocityCPA Glossary
- The process by which a CPA licensed in one US jurisdiction obtains a licence in another, typically on the basis of substantially equivalent requirements.
- Refundable creditUS Tax Dictionary
- A credit that can reduce tax liability below zero, producing a refund. A non-refundable credit can only reduce liability to zero.
- REGCPA Glossary
- Taxation and Regulation. The CPA exam section covering federal taxation, business law, and ethics and professional responsibilities.
- REGFinance Acronyms
- The CPA exam core section covering federal taxation, business law and professional responsibilities.
- Relevant costCMA Glossary
- A future cost that differs between alternatives and is therefore relevant to a decision. Sunk costs are never relevant.
- Responsibility centreCMA Glossary
- An organisational unit whose manager is accountable for a defined set of outcomes — cost, revenue, profit or investment.
- Retained earningsAccounting Terms
- Cumulative net income not distributed to owners as dividends, carried forward as part of equity.
- Return on assetsAccounting Formulas
- How efficiently the asset base generates profit, independent of financing structure.
- Return on equityAccounting Formulas
- The return generated on owners' capital. Can be inflated by leverage rather than operating performance.
- Return on investmentAccounting Formulas
- The proportional return on an outlay. Ignores timing, so it is not directly comparable across different horizons.
- RevenueAccounting Terms
- Income arising in the course of an entity's ordinary activities, from the sale of goods or provision of services.
- ROAFinance Acronyms
- Net income divided by average total assets, measuring how efficiently assets generate profit.
- ROEFinance Acronyms
- Net income divided by average shareholders' equity, measuring return generated on owners' capital.
- ROIFinance Acronyms
- Gain from an investment relative to its cost, expressed as a percentage.
S
- S corporationUS Tax Dictionary
- A corporation electing Subchapter S treatment, passing income through to shareholders and avoiding entity-level federal income tax, subject to eligibility restrictions.
- Scaled scoreCPA Glossary
- A CPA exam score reported on a standardised scale rather than as a raw percentage of questions answered correctly, so scores are comparable across exam versions.
- Schedule K-1US Tax Dictionary
- The statement issued by a partnership, S corporation or trust reporting each owner's or beneficiary's share of income, deductions and credits.
- SECFinance Acronyms
- The US regulator of securities markets and public company reporting.
- Section 179 deductionUS Tax Dictionary
- An election to expense the cost of qualifying business property in the year it is placed in service, rather than depreciating it over time, subject to limits.
- Self-employment taxUS Tax Dictionary
- Social Security and Medicare tax paid by self-employed individuals on net earnings from self-employment, covering both the employer and employee portions.
- SOXFinance Acronyms
- US legislation of 2002 imposing corporate governance, internal control and reporting requirements on public companies.
- Standard costCMA Glossary
- A predetermined cost per unit of input or output, used as a benchmark against which actual costs are measured.
- Standard deductionUS Tax Dictionary
- A fixed deduction from adjusted gross income available to taxpayers who do not itemise, with the amount depending on filing status.
- State board of accountancyCPA Glossary
- The government body in each US jurisdiction that grants CPA licences. Eligibility rules, experience requirements and licensure are set at state level, not nationally.
- Statement of cash flowsAccounting Terms
- A financial statement classifying cash movements during a period into operating, investing and financing activities.
- Statute of limitationsUS Tax Dictionary
- The period within which the IRS may assess additional tax or a taxpayer may claim a refund. The general assessment period runs from the filing date, with extensions in defined circumstances.
- Straight-line depreciationAccounting Formulas
- An equal depreciation charge in each period of an asset's useful life.
- Sunk costCMA Glossary
- A cost already incurred that cannot be recovered and is therefore irrelevant to future decisions.
T
- Task-based simulationCPA Glossary
- A TBS. A condensed case-study question requiring the candidate to complete forms, perform calculations or research authoritative literature, rather than select an answer.
- Tax creditUS Tax Dictionary
- A dollar-for-dollar reduction of tax liability. More valuable per dollar than a deduction, which only reduces taxable income.
- Taxable incomeUS Tax Dictionary
- Adjusted gross income less the standard or itemised deductions and any qualified business income deduction. The amount to which tax rates are applied.
- TBSFinance Acronyms
- A case-style CPA exam question requiring completion of a task rather than selection of an answer.
- TCPCPA Glossary
- Tax Compliance and Planning. A CPA discipline section covering advanced individual and entity taxation and personal financial planning.
- TCPFinance Acronyms
- A CPA exam discipline section covering advanced individual and entity taxation.
- Testing windowCMA Glossary
- The defined periods during the year in which CMA exam parts can be scheduled at Prometric centres.
- TestletCPA Glossary
- A block of questions within a CPA exam section. Each section is delivered as a series of testlets containing multiple-choice questions or task-based simulations.
- Transfer pricingCMA Glossary
- The price charged when one division of an organisation supplies goods or services to another, affecting each division's reported performance.
- Trial balanceAccounting Terms
- A listing of all ledger account balances at a point in time, used to check that total debits equal total credits before preparing financial statements.
U
- Uniform CPA ExaminationCPA Glossary
- The single national examination all CPA candidates must pass, administered at Prometric test centres. Uniform across jurisdictions even though licensure requirements are not.
- Units of production depreciationAccounting Formulas
- Depreciation charged in proportion to actual output rather than time elapsed.
V
- Variable costCMA Glossary
- A cost that changes in total in proportion to activity, while remaining constant per unit within the relevant range.
- Variance analysisCMA Glossary
- Comparison of actual results against budget or standard, with the difference decomposed into price, rate, efficiency and volume components to identify causes.
W
- WACCFinance Acronyms
- The average rate an entity pays to finance its assets, weighted by the proportion of debt and equity.
- Weighted average cost of capitalAccounting Formulas
- The blended after-tax cost of an entity's debt and equity funding, weighted by their proportions of total capital.
- WithholdingUS Tax Dictionary
- Tax deducted at source from wages and certain other payments and remitted to the IRS on the recipient's behalf.
- Working capitalAccounting Terms
- Current assets less current liabilities. A measure of the short-term resources available to fund day-to-day operations.
- Working capitalAccounting Formulas
- The absolute buffer of short-term resources funding day-to-day operations.
- Working capital managementCMA Glossary
- Managing current assets and current liabilities — cash, receivables, inventory and payables — to maintain liquidity while minimising the cost of funding.
- Write-offAccounting Terms
- Removing an asset's carrying amount from the accounts when it is no longer recoverable, such as an uncollectible receivable.
Y
- YTDFinance Acronyms
- The period from the start of the current financial or calendar year to the present date.