G TO L
G
GAAP
GAAP is the acronym for Generally Accepted Accounting Principles, which is an accepted set of accounting procedures, policies and rules. Read on for more about the U.S. GAAP - Generally Accepted Accounting Principles
G & A
G & A is the acronym for General and Administrative Overheads.
Gain
Gain is the excess of total revenue over total expenses. Gain may also be used to refer to a rise in value, rate or prices.
Garnish
Garnish is to claim the debtor's wages/salary under a court order for previously defaulted debts.
Gearing Ratio
Gearing ratio is the ratio that measures the percentage of the total capital employed financed by long term debt.
Generally Accepted Auditing Standards
Generally Accepted Auditing Standards are the standards, rules and guidelines set by the Auditing Standards Board of the American Institute of Certified Public Accountants.
Gilt
Gilt, in general use, is a bond issued by the government.
Global Bond
Global bond is a bond which can be traded outside the country of its issue.
Global Funds
Global Fund is a type of mutual fund where the fund company can invest in companies located anywhere in the world
GMROI
GMROI is the acronym for Gross Margin Return on Investment.
Going Concern Concept
Going Concern Concept of Accounting assumes that the business will remain in existence for all the foreseeable future.
Going Public
Going public is used to indicate that a certain business is going to issue publicly traded share capital.
Going Rate
Going rate is the average cost of the products or services.
Golden Rules of Accounting
The Golden Rules of Accounting govern the treatment of various types of accounts in case of an economic event.
- For personal accounts, the rule is Debit the receiver; credit the giver.
- For real accounts the rule is Debit what comes in; Credit what goes out.
- For Nominal Accounts the rule is Debit all expenses or losses; Credit all incomes and gains.
Goods
The commodity in which a business trades, is collectively known as goods.
Goodwill
Goodwill is an intangible benefit one business enjoys over its competitor as the market is ready to absorb the goods of the former company even at a higher price.
Governance
Governance is the act of exercising authority or simply governing which is performed by the Board of Directors.
GP Ratio
GP Ratio is the acronym for Gross Profit Ratio. The Gross Profit ratio measures the relationship between the gross profit and sales. GP Ratio = (Gross Profit * 100) / Sales
Gross
Gross is an amount before any deductions or additions are made to it.
Gross Debt
Gross debt is the total of all the debt obligations of the business.
Gross Margin
Gross Margin is used synonymously with Gross Profit or Gross Profit Ratio.
Gross Profit
Gross profit is the excess of sales over production costs.
Gross Profit Method
Gross Profit Method is the inventory estimated that is based on gross margin.
Gross Revenue
Gross revenue is the money earned from sales of goods.
Gross Sales
Gross sales is the total value of sales prior to any discounts, deductions or returns.
H
Hard Assets
Hard Assets include physical assets and financial assets and do not include intangible assets.
Hard Costs
Hard costs are the total costs incurred on the purchase of assets.
Hidden Assets
Hidden assets are any value generating assets in the business that are not included in the balance sheet of the company.
High Credit
High Credit is the highest that a debtor has ever taken from any one creditor.
High Low Method
High-Low method is a method of approximating cost method is one which considers only the highest and lowest points of the given data and the activity in the given range.
High Yield Debt
High Yield Debt is a debt instrument that gives a higher yield/return as it is a higher risk instrument.
Hire and Purchase Agreement
Hire and Purchase agreement is an agreement where the buyer hires an asset/goods at a rate of rent and at the end of the renting period and after paying all the installments, receives ownership of the asset or goods.
Holding Company
A holding company is one that holds more than 50% stake in another company (known as subsidiary company).
Horizontal Financial Analysis
Horizontal Financial Analysis is the analysis of the ratios of one company with those of the competitors and with those of the industry.
Hostile Takeover
A hostile takeover is when one company buys out the other company whether the board approves of it or not. It is usually done by buying the majority stake of the company from the publicly traded share, thus becoming the majority stakeholder, bypassing the board of directors.
Human Capital
Human capital is the intellectual capital of the employees which the company enjoys.
Hybrid Instrument
Hybrid instrument is a bundled instrument containing two or more different types of risk management instruments.
I
Identifiable Assets and Liabilities
Identifiable assets and liabilities include both tangible and intangible items in the balance sheet.
Idle Time
Idle time is the time for which production activity gets suspended.
Immovable
Immovable is generally used in the context of assets which are permanent and stationary, like land and buildings.
Impairment of Value
Impairment of value is the permanent loss of value of an asset.
Implicit Rate of Interest
The rate of interest is said to be implicit when the stated interest rate is different from the market rate.
Implied Costs
Implied costs are the hidden costs incurred on the assets that have already been paid for.
Imprest Basis
Imprest basis means that the cash balance for expenditure in the cash account is replaced at the end of every period.
Income
Income is the amount of money received during a period of time on account of anything.
Income Gearing Ratio
Income Gearing Ratio = Interest Expense / Operating Profit.
Income Tax
Income tax is the tax paid as a percentage of business or personal income.
Income Taxes Payable
Income taxes payable is the amount of money payable as income tax, but is not paid yet.
Incorporated
Incorporated is a type of business entity that has been allowed to operate as a corporation by the approval of the state government.
Incremental
Incremental means additional.
Incremental Budget
Incremental budget is the budget for the fixed overhead costs.
Incremental Cost
Incremental cost is the cost incurred for producing one additional unit of output.
Incremental Cost of Capital
Incremental cost of capital is the weighted cost of the additional capital raised.
Indirect Cost
Indirect costs are those costs which are not directly related to the process of production.
Indirect Shareholding
Indirect shareholding is when a company A holds a direct shareholding in company B and company B holds a direct shareholding in company C, company A is said to have an indirect shareholding in company C.
Industry Analysis
Industry analysis is the analysis of the financial performance of an industry as a whole.
Inflation Accounting
Inflation accounting is a form of accounting where the amounts are adjusted to the changing prices.
Inflation Adjustment
Inflation adjustment is to adjust the figure on an amount for increase or decrease in inflation.
Inherent Risk
Inherent risk is the risk that is intrinsic to any activity, investment etc.
Insolvency
Insolvency is a situation where an entity's liabilities exceed its assets and cannot be paid off.
Installation
Installation is the cost incurred to put an asset into use.
Installment Sale
Installment sale is selling a commodity and receiving the payments for it over successive periods instead of a lump sum.
Insurance Claim
Insurance claim is the written notification which the insured gives to the insurer to ask for the amount due under the policy.
Intangible Asset
An Intangible asset is an asset that cannot be physically seen or felt, but its presence benefits the company, e.g goodwill.
Intellectual Capital
Intellectual capital is the resource of specialized knowledge that a company has and is recognized as an asset to the company.
Interest
Interest is a fixed charge that is given as compensation for parting with immediate liquidity.
Interest-Bearing
Interest bearing is used to describe something that gives interest.
Interest Coverage
Interest Coverage Ratio = Net Interest Expense / EBIT
Interest Earnings
Interest earning is the total interest received by the company on various investments.
Interest Expense
Interest expense is the total interest paid by the company for various debts.
Interest Rate
Interest rate is a percentage of the total investment/debt at which the interest amount is given/paid.
Interim Audit
Interim audit is an audit that is conducted at some time during the year.
Interim Dividend
Interim Dividend is the dividend that is paid at some time during the year
Interim Statement
Interim statement gives the financial position of the business at some time during the year.
Internal Audit
Internal audit is the audit carried out by the audit committee in the company itself.
Internal Rate of Return
Internal rate of return is the rate of return, expressed as a percentage, the net present value for which is zero.
Intrinsic Value
Intrinsic value is the value of something by itself, irrespective of its use and whether it is used.
Inventory
Inventory is the stock of raw materials, work in progress or finished goods
Inventory Accumulation
Inventory accumulation is the extra inventory that was stored on account of unplanned events.
Inventory and Purchases Budget
Inventory and purchases budget is the budget set by the company for purchasing and storing inventory.
Inventory Control
Inventory Control is to maintain the optimum amount of inventory in the stores of the company.
Inventory Obsolescence
Inventory is said to be obsolete when it is no longer usable or salable.
Inventory Profits
Inventory profit is the profit that the company earns due to the rise in the prices of inventory.
Inventory Transfer
Inventory transfer is a process that physically tracks the transfer of inventory from one place to another.
Inventory Turnover Ratio
Inventory turnover ratio gives the number of times the inventory is purchased and used up for production or sold in a given period.
Inventory Valuation
Inventory valuation is the process of assigning monetary value to inventory.
Investment
Investment is purchasing something with an intention to gain a profit from its sale or getting income for it at regular intervals. Read on for Types of Investments
Investment Capital
Investment capital is the capital raised by the issue of shares or long term debt instruments like debentures.
Investment Expense
Investment expense is the expenses incurred on the inventory other than those expenses which are incurred for purchasing the inventory, like installation costs, brokerage etc.
Investment Tax Credit
Investment tax credit is a tax credit that is given to the businesses to write off a portion of the cost of purchasing equipment.
Investment Turnover
Investment turnover is the ratio used to measure the number of times an asset or investment revolves.
Invoice
An invoice is an itemized bill which gives the details of the items purchased or sold.
IPO
IPO is the acronym for Initial Public Offering. It is the first time that a business goes public with the issue of shares.
J
JIT
JIT is the acronym for Just-in-Time.
Job Costing
Job Costing is the allocation of time, material and expenses to an individual job or project.
Joint Account
Joint Account is the financial account that is used and run by two or more account holders.
Joint Payee Endorsement
Joint Payee endorsement is when a bank draft is made out to two parties, and both parties are required to endorse the back of the bank draft before it is honored by the bank.
Joint Stock Company
Joint Stock Company is a type of company that enjoys some features of a partnership and some features of a corporation.
Joint Venture
Joint Venture is a business activity started by two or more people, who invest capital for that business activity. Read on for more about Venture Capital
Joint Ventures and Investments
Joint Ventures and Investments is the total investments and equity in a joint venture.
Journal
Journal is the first record of transactions of the business as they occur.
Journal Entry
Journal entry is a record of the transactions made by the business.
K
Kaizen Budgeting
Kaizen Budgeting is the budgeting approach which takes into consideration projected future costs rather than current practices.
Kaizen Costing
Kaizen costing is reducing the cost of production in small steps.
L
Lag Time
Lag time is the time between two closely related phenomena such as stimulus and response.
Land
Land is the asset account in which the details and the costs of land holding for the business are given.
Leasehold Improvements
Leasehold improvements are repairs and improvements made to leasehold land by the lessee.
Ledger
Ledger is the book which consists of various individual accounts to which the journal entries are posted.
Ledger Group
Ledger group is a group of ledgers that consist of a primary ledger and a number of secondary ledgers.
Leverage
Leverage is the property rising or falling at a greater proportion than the comparable investments.
Leverage Ratios
Leverage ratios measure the impact of equity and debt capital on profitability.
Levied
Levied is a charge that is imposed or collected.
Liability
Liability is a loan or a debt for the business that needs to be discharged.
LIFO
LIFO is the acronym for Last In First Out. It means that the inventory which is purchased last is used or sold first.
LIFO Liquidation
LIFO Liquidation is the process of reducing the reported value of the inventory.
LIFO Reserve
LIFO reserve is the difference between the LIFO level of inventory and the FIFO level of inventory.
Lifting and Operating expenses
Lifting and Operating expenses are generally incurred in the oil and energy industry, in the running and maintenance of oil wells.
Limited Company
Limited Company is a legal entity that is owned by shareholders. Read more on Corporation Types.
Limited Liability
Limited liability is when the owner's liability for the business is restricted to his share in the business. Read on for An Explanation of LLC (Limited Liability Company).
Line of Credit
Line of Credit is an agreement between a financial institution and a business where the financial institution agrees an upper limit on the amount sanctioned without having to take another loan.
Liquid Assets
Liquid assets are cash and those assets that are easily convertible to cash.
Liquidating Dividends
Liquidating dividends are those dividends that are paid by the company at the time of liquidation/bankruptcy
Liquidation
Liquidation is selling off all the assets of the business to pay off the debts of the business.
Liquidity
Liquidity is the ability of the business to meet all current debt obligations.
Liquidity Ratio
Liquidity Ratio = (Cash + Marketable Securities) / Current Liabilities
Loaded Labor Rate
Loaded labor rate is the total of the employee remuneration, benefits, capital expenses and other overheads on labor.
Loan
Loan is when a lender allows the borrower to take some of the assets owned by the lender for a specified amount of time, that will be returned at the end of the specified period along with interest. Read on to know about Mortgage Loan Underwriting
LOC
LOC is the acronym for Letter of Credit.
Long-Lived Assets
Long-lived assets are those which are not consumed in the normal course of business.
Long Term Debt
Long term debt is a type of financing that is taken by a business and the maturity of which is several years hence.
Long Term Debt-to-Equity
Long term Debt-to-Equity Ratio = Long Term Liabilities / Shareholder Equity
Long Term Liabilities
Long term liabilities are those which are due for over a year.
Long Term Receivables
Long term receivables are those receivables which will be received after a year.
Loss
Loss is the excess of expenses over incomes in any context.