Accounting Definitions - Accounting Definitions Accountant...

Accounting Definitions
Accountant
an individual trained and knowledgeable in the profession
of accountancy; and preferably a member of a
professional accounting organization (e.g., a CGA, CMA
or CA).
Accountant’s Communication
the accountant’s written communication that prefaces the
financial statements;
and
additionally, see Auditors’ Report, Review Engagement
Report and Notice to Reader.
Accounting (Accountancy)
functions include analyzing, interpreting and examining the
results of the
bookkeeping process; and
information system design and development of controls
and procedures.
Accounting Equation
a description of the relationship between a company’s
assets, liabilities and
equity; expressed as Assets = Liabilities + Owner’s Equity;
and
also known as the balance sheet equation.
Accrued Expense
liability, created by consumption of economic benefit that
has not been invoiced
and does not require payment until a later date (e.g.,
accrued property taxes).
Accrued Revenue
an asset, created by realization of economic benefit, which
normally is not due
or invoiced until a later date (e.g., accrued interest
income).
Amortization
systematic allocation of cost over a related time period
the expensing of both tangible and intangible assets; and
often referred to as “depreciation.”
Annuity
a sequence of equal payments, usually made at regular
intervals of time.
Articles of Incorporation
legal documents that recognize a corporation as a legal
entity
additionally, are granted by the federal or provincial
jurisdiction in which the
company is incorporated; and
the documents would include the name of the company,
the nature of business
activities, and the number and types of capital stock it can
sell.
Asset
anything of value owned or controlled by a corporation or
individual—may be
tangible or intangible; and
anything owned by the company that provides a future
benefit.
Audit
an examination of records or financial accounts to verify
their accuracy; and
additionally, see Audit (External); Compliance Audit;
Environmental Audit;
Forensic Audit; Internal Audit; and Operational Audit.
Auditor
see External Auditor; and
see Internal Auditor.
Auditors’ Report
the report that prefaces financial statements and
expresses the opinion of the
external auditor as to the fairness of the financial
statements attached.
Balance
amount arrived at by adding all debits and subtracting all
credits; and
to ensure total debits equal total credits.
Balance Sheet
statement, at a particular point in time, of the financial
position of a business
or organization—divided into three parts—assets, liabilities
and ownership
(equity); and
also known as statement of financial position.
Bank Indebtedness
balance of a bank account when funds withdrawn exceed
funds deposited.