Accounting Term Glossary
ACCOUNTING TERMS GLOSSARY ACCOUNTING Recording and reporting of financial transactions, including the origination of the transaction, its recognition, processing, and summarization in the FINANCIAL STATEMENTS. ACCOUNTING PERIOD The time period for which accounts are prepared, usually one year. ... BOND One type of long term PROMISSORY NOTE, frequently issued to the public as a SECURITY regulated under federal securities laws or state BLUE SKY LAWS. ... CREDIT An accounting entry system that either decreases assets or increases liabilities. ... Such assets include cash, accounts receivable and money due usually within one year, short term investments, US government bonds, inventories, and prepaid expenses. ... DISCLOSURE Process of divulging accounting information so that the content of FINANCIAL STATEMENTS is understood. ... FINANCIAL LEASE Long term, non cancelable rental agreement / a form of secured long term debt. FINANCIAL YEAR Any accounting period of 12 months FIXED ASSETS Assets of a permanent nature required for the normal conduct of a business, and which will not normally be converted into cash during the ensuring fiscal period. ... HISTORICAL COST ACCOUNTING An accounting principle requiring all financial statement items to be based on original cost. ... INFLATION ACCOUNTING A system of accounting which, unlike historical cost accounting, takes into account changing prices. ... RESERVE An accounting entry that properly reflects contingent liabilities. ... SHORT TERM DEBT Liabilities requiring payment within the year.