10-k
Form 10-K is the primary annual filing for many U.S. public companies. It includes audited financial statements, detailed management discussion (MD&A), business risks, and other disclosures required b...
OpenFinancial Dictionary
Accounting & Finance Terms (English)
Accounting and Finance Terms Explained
Explore accounting, finance, auditing, taxation, and economics terms explained in clear English. Each entry provides a definition, a detailed explanation, practical uses, and examples where available.
Use the search box below to find a term by its name, definition, application, or related financial concept.
10-Q
Form 10-Q is a quarterly filing that provides interim (usually unaudited) financial statements and updates on operations, risks, and management discussion during the year. It is filed for the first th...
Open13TH PERIOD
The 13th period is an additional accounting period used at year-end for adjusting and closing entries. It helps separate regular monthly activity (periods 1–12) from year-end adjustments and audit ent...
Open15 Minute Rule
The “15-minute rule” is an informal guideline used to delay or limit time spent waiting or acting impulsively. In business settings it can be used as a small control to improve discipline and time eff...
Open2-WAY MATCHING
Two-way matching is a purchasing control that compares the supplier invoice (voucher) with the purchase order (PO) to confirm price and quantities before payment.
Open3% RULE
The 3% rule (in certain pension vesting contexts) is a minimum benefit accrual requirement tied to years of participation. It is used to ensure participants earn at least a baseline benefit over time ...
Open3-WAY MATCHING
Three-way matching strengthens controls by comparing the supplier invoice, the purchase order, and the receiving report (goods received note). Payment is approved only when the three documents agree.
Open4 C's OF CREDIT
The 4 C’s of credit are key factors lenders evaluate before granting credit: Capacity (ability to pay), Character (willingness/track record), Collateral (security pledged), and Capital (net worth/fina...
Open4-4-5 Calendar
A 4-4-5 calendar is a fiscal calendar that groups the year into quarters of 13 weeks (4 weeks, 4 weeks, 5 weeks). It standardizes period comparisons for retailers and businesses that track weekly acti...
Open401 (K) PLAN
A 401(k) plan is a U.S. defined contribution retirement plan that allows employees to contribute part of their salary (often with employer matching). Contributions may receive tax advantages depending...
Open401(k) expense: delivery
This account represents the employer’s 401(k) expense for delivery department employees for the reporting period. It is typically classified as an operating expense.
Open401(k) expense: selling & admin
This account represents the employer’s 401(k) expense related to selling and administrative employees for the reporting period and is generally shown within operating expenses.
Open401(k) expense: warehouse
This account represents the employer’s 401(k) expense related to warehouse employees for the reporting period and is typically reported as an operating expense.
Open401(k) payable
401(k) payable is a current liability representing amounts withheld and/or owed by the employer that must be remitted to the 401(k) plan provider or trustee.
Open8-K
Form 8-K is a current report filed to announce material events or significant corporate changes (e.g., mergers, bankruptcy, auditor changes). It helps investors receive timely information.
Open80 - 20 Rule (Pareto Principle/Law)
The Pareto Principle (80/20 rule) suggests that a small proportion of causes often accounts for a large proportion of results—e.g., a minority of products or customers generate most sales or issues. I...
Open940 Form
IRS Form 940 is the annual employer return for federal unemployment tax (FUTA) in the United States. Employers use it to report and pay FUTA tax, subject to credits and rules.
Open941 Form
IRS Form 941 is a quarterly employer tax return in the U.S. used to report federal income tax withheld and payroll taxes (such as Social Security and Medicare) for employees.
OpenA Misstatement is Inconsequential
An inconsequential misstatement is clearly trivial, even when combined with possible undetected misstatements. Auditors may use a threshold for “clearly trivial” items that do not require accumulation...
OpenA traceable fixed cost
A traceable fixed cost is a fixed cost that exists because a specific segment exists (product line, department, region). If the segment is removed, the cost would be eliminated, unlike common fixed co...
OpenA&E
A&E can refer to Appropriation & Expense (budgeted allocations and spending) or Analysis & Evaluation, depending on the context of reporting.
OpenA&G
A&G stands for Administrative & General expenses, which are overhead costs that support the business as a whole rather than a specific product or service.
OpenA&M
A&M commonly means Additions and Maintenance, used to describe capital additions or routine maintenance spending depending on how an organization classifies costs.
OpenA&P
A&P is an acronym for Administrative and Personnel, often used to group employee-related and administrative support costs.
OpenABA
ABA is a professional credential in the U.S. related to accounting and advisory services for individuals and small/medium businesses. It differs from CPA in licensing scope and audit authority.
OpenAbatement
Abatement is a reduction or full cancellation of an amount due, commonly referring to tax, penalty, or interest relief granted under specific conditions.
OpenABC
Activity-Based Costing (ABC) assigns overhead and indirect costs to products/services based on activities that drive costs. It improves cost accuracy compared to traditional volume-based allocations.
OpenABC inventory system
The ABC inventory system classifies inventory into A, B, and C categories based on value/importance. “A” items are few but high value and require tight control; “C” items are many but low value.
OpenABM
Activity-Based Management (ABM) uses ABC information to improve processes, control cost drivers, and enhance performance. It links activity costs to strategic decisions and continuous improvement.
OpenAbnormal Returns
Abnormal return is the difference between an investment’s actual return and its expected return based on a benchmark or risk model, often used in event studies.
OpenAbnormal Spoliage
Abnormal spoilage is spoilage beyond normal operating levels and is recorded as a period loss rather than being included in inventory or product costs. This highlights inefficiencies and unusual event...
OpenAbove The Line
“Above the line” often refers to deductions or items that are included in calculating a subtotal before a key line (e.g., adjusted gross income in some tax contexts). In financial reporting, it can al...
OpenAbsorb
To absorb means to assign or incorporate costs into another account or into product cost, such as absorbing overheads into inventory or cost of production.
OpenABSORBED COSTS
Absorbed costs are costs included in product cost under absorption costing, meaning both variable costs and fixed manufacturing overhead are allocated to units produced.
OpenAbsorption Costing
Absorption costing treats all manufacturing costs (variable and fixed) as product costs. Non-manufacturing costs (selling and admin) are treated as period costs.
OpenAbsoult Change
Absolute change is the simple numerical difference between two values (new minus old) without expressing it as a percentage.
OpenACAT
ACAT (Accreditation Council for Accountancy and Taxation) is a U.S. organization that grants certain accounting and tax credentials and supports continuing professional education and ethical standards...
OpenACB
ACB usually refers to Adjusted Cost Base, which represents the tax cost of an asset after adjustments such as additions, improvements, or certain deductions, used to determine taxable gains.
OpenAccelerated Depreciation
Accelerated depreciation is a depreciation method that recognizes higher depreciation expense in the early years of an asset’s life and lower expense later, reflecting faster consumption of benefits.
Openaccount
An account is a record in the general ledger used to accumulate transactions of a similar type (cash, receivables, revenue, expenses). Each account has a running balance based on debits and credits.
Openaccount Aging
Account aging classifies receivables or payables by how long they have been outstanding (e.g., 0–30, 31–60, 61–90, 90+ days). It supports collection priorities, credit risk assessment, and provisionin...
OpenAccount Analysis
Account analysis is a technique used to estimate cost behavior by reviewing past account data and separating costs into fixed and variable components based on expected activity levels.
OpenAccount Balance
An account balance is the net amount in an account at a point in time after offsetting debits and credits, indicating whether the account is in debit or credit position.
OpenAccount Current
A current account is an ongoing account relationship (often bank or between parties) where transactions are recorded continuously and the balance changes with each movement.
OpenAccount Distribution
Account distribution is the process of allocating amounts (debits/credits) to the appropriate accounts or cost centers, ensuring transactions are posted to the correct classifications.
OpenAccount Group
An account group is a set of related accounts classified under a common heading, used to organize the chart of accounts and facilitate reporting and analysis.
OpenAccount Payable
Accounts payable are amounts owed to suppliers for goods or services purchased on credit, representing short-term obligations to be settled according to agreed terms.
OpenAccount Receivable
Accounts receivable are amounts owed by customers for credit sales or services on account, representing expected cash inflows and requiring follow-up for collection.
OpenAccountable Plan
An accountable plan is a reimbursement arrangement where employees must substantiate expenses and return any excess advances, allowing proper tax treatment of business expenses.
OpenAccountant's Opinion
An accountant’s opinion is the professional conclusion expressed in a signed report about whether financial statements are presented fairly in accordance with an applicable reporting framework.
Open