GLOSSARY
Annuity – Series of payments,
usually payable at specified time intervals.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Account Number – An account
number is the six-digit number assigned to each unique “Purpose”
specified in each fund
group: endowment fund, restricted fund,
unrestricted fund, and life income funds.
Appreciation – The increase
in the value of an asset in excess of its depreciable cost, which is due
to economic, and other
conditions, as distinguished from increases in value due to improvements
or additions made to it.
Source: http://www.ventureline.com/glossary.htm#sectF
Asset Class – The financial
statements report amounts separately by three classes of net assets –
permanently
restricted net assets,
temporarily restricted net assets, and unrestricted net assets (based on the
existence or
absence of donor imposed
restrictions) as required by the Statement of Financial Accounting Standards
(SFAS) No. 117, Financial Statements of Not-for-Profit
Organizations.
Assets – Anything owned by an
individual or a business, which has commercial or exchange value.
Assets may consist of
specific property or claims against others, in contrast to obligations due
others.
Source: http://www.ventureline.com/glossary.htm#sectF
Audit – The result of an
independent accountant’s review of the statements and footnotes to ensure
compliance with generally
accepted accounting principles and to render an opinion on the fairness of
the financial statements.
Source: http://www.finet.com.hk/accounting/a.htm
Board of Directors – Persons
elected by the stockholders to govern a corporation.
Source: http://www.finet.com.hk/accounting/a.htm
Business Entity – A selection
of the legal form under which a business is to operate: sole proprietorship,
general partnership,
corporation, S corporation (in the
Source: http://www.ventureline.com/glossary.htm#sectF
Cash – Coins, currency, money
orders, checks, and funds on deposit with financial institutions; the
most liquid of assets.
Source: http://www.finet.com.hk/accounting/c.htm
Cash Equivalents – Short-term
(generally less than three months), highly liquid INVESTMENTS that are
convertible to known amounts
of cash.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Charitable Lead Unitrust – In
considering this trust, keep in mind that, basically, the charitable lead
unitrust
is a mirror image of a
charitable remainder unitrust. The
difference that income from the trust is first distributed
to the qualified charity.
When the trust terminates,
the principal is distributed to remainder beneficiaries, who are usually the
grantor’s
children or
grandchildren. Income paid by the trust
to the charity is a fixed percentage of the trust’s principal,
revalued each year. Additional contributions can be made to a
charitable lead unitrust.
Source: http://www.msdw.com/
Chart of Accounts – A list of
ledger account names and associated numbers arranged in the order in which
they normally appear in the
financial statements. The Chart of
Accounts are customarily arranged in the following
order: Assets, Liabilities, Owners’ Equity
(Stockholders’ Equity for a corporation), Revenue, and Expenses.
Source: http://www.ventureline.com/glossary.htm#sectF
Cost/Book Value – BOOK COST,
normally, is the cost at the time an asset is purchased or realized, i.e. the
total amount paid to acquire
an asset.
Source: http://www.ventureline.com/glossary.htm#sectF
Deficit – Financial shortage
that occurs when LIABILITIES exceed ASSETS.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Deferred – In accounting, any
account where the asset or liability is not realized until a future date, e.g.
annuities,
charges, taxes, income,
etc. The deferred item may be carried,
dependent on type of deferral, as either an asset
or liability.
Source: http://www.ventureline.com/glossary.htm#sectF
Depreciation – The value of
assets usually decreases as time goes by.
The amount or percentage it decreases
by is called
depreciation. This is normally
calculated at the end of every accounting period (usually a year) at
a typical rate of 25% of its
last value. It is shown in both the
profit and loss account and balance sheet of a
business.
Source: http://www.accountz.com/glossary.html#depr
Disbursement – The paying out
of money to satisfy a debt or an expense.
Source: http://www.ventureline.com/glossary.htm#sectF
Discount Rate – Rate at which
INTEREST is deducted in advance of the issuance, purchasing, selling, or
lending of a financial
instrument. Also, the rate used to
determine the CURRENT VALUE, or present value,
of an ASSET or income stream.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Distribution – Payment by a
business entity to its owners of items such as cash ASSETS, stocks, or
earnings.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Endowment – A permanent fund
where gifts to the fund are held in perpetuity and where earnings are used
in accordance with the
donor’s specified wishes.
Entity – An organizational unit
(a person, partnership, or corporation) for which accounting records are kept
and about which accounting
reports are prepared.
Source: http://www.finet.com.hk/accounting/e.htm
Face Value – Amount due at
maturity from a BOND or note.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Fair Market Value – The price
at which a willing seller will sell and a willing buyer will buy, in an arms –
length
transaction, when neither is
under compulsion to sell or buy and both have reasonable knowledge of relevant
facts.
Source: http://www.ventureline.com/glossary.htm#sectF
FASB – Financial Accounting
Standards Board.
Source: http://www.ventureline.com/glossary.htm#sectF+A51
Fiduciary – Person who is
responsible for the administration of property owned by others. Corporate
management is a FIDUCIARY
with respect to corporate ASSETS which are beneficially owned by the
stockholders and
CREDITORS. Similarly, a TRUSTEE is the
fiduciary of a TRUST and partners owe
fiduciary responsibility to
each other and to their creditors.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Financial Accounting
Standards – Official promulgations, known as STATEMENTS OF FINANCIAL
ACCOUNTING STANDARDS, by the
FINANCIAL ACCOUNTING STANDARDS BOARD
(FASB) which are part of
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) in the
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Financial Accounting
Standards Board (FASB) – Independent, private, non-governmental authority for
the
establishment of ACCOUNTING
principles in the
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Fiscal Year – The declared
accounting year for a company, but it is not necessarily in conformance to a
calendar year (January
through December). However, it does
cover twelve months, 52 weeks, 365 day.
For example, the
is their fiscal or accounting
year.
Source: http://www.ventureline.com/glossary.htm#sectF
Fund Accounting – A method of
ACCOUNTING and presentation whereby ASSETS and LIABILITIES are
grouped according to the
purpose for which they are to be used.
Generally used by government entities and
not-for-profits.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
GASB – The Governmental
Accounting Standards Board
Source: http://www.ventureline.com/glossary.htm#sectF
General Ledger – A collection
of all ASSET, LIABITLITY, owners EQUITY, REVENUE, and expense
accounts.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Interest – Payment for the
use of forbearance of money.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Letter of Authorization (LOA)
– A form that permits a Donor to provide written instructions to transfer a
stock certificate in the
Donor’s name in full or in part to another party, such as a charitable
organization,
without using a transfer
agent. This form given to the charitable
organization with the designated stock
certificate and a separate
Stock Power is usually executed by the charitable organization’s brokerage to
expedite the sale and receipt
of proceeds from the gift of securities.
Loss – (in finance) is when
expenses exceed sales or revenues, i.e. goods or services are sold for less
than their cost.
Source: http://www.ventureline.com/glossary.htm#sectF
Municipal Bond – A BOND
issued by a government or public body, the INTEREST on which is typically
exempt from federal taxation.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Mutual Fund – An investment
company which generally offers its shares to the general public and invests
the proceeds in a diversified
portfolio of SECURITIES.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Net Present Value (NPV) – A
method used in evaluating investments, whereby the net present value of
all cash outflows (such as
the cost of the investment) and cash inflows (returns) is calculated using a
given discount rate, usually
REQUIRED RATE OF RETURN. An investment
is acceptable if the NPV
is positive.
Source: http://www.ventureline.com/glossary.htm#sectF
Non-Expendable – An asset
held by the State in a trustee capacity where only income derived from the
principal may be expended in
the course of the funds’ designated operations.
The principal must be
preserved intact.
Source: http://www.osc.state.nc.us/sigdocs/sig_docs/sigNonexpendable_Trust_Funds.html
Non-for-profit
Organization/Tax-Exempt Organization – An incorporated organization which exists
for
educational or charitable
purposes, and from which its shareholders or trustees do not benefit
financially.
Also called not-for-profit
organization.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Object Code – Designates the
type of expense or revenue to be charged to an account. It is the four
numbers following the account
number in the Foundation’s transaction records, e.g. 440001-0262,
Restricted Gift.
Pledge – “Promise to Give” –
A written or oral agreement to contribute cash or other assets.
Source: FASB
116
Principal – Face amount of a
SECURITY, exclusive of any PREMIUM or INTEREST.
The basis for
INTEREST computations.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Pro Rata – A term describing
an allocation that is based on a proportionate distribution of the total.
Source: http://www.finet.com.hk/accounting/e.htm
Quasi Endowment – Sometimes
called “Board Designated” endowments, certain funds (restricted or
unrestricted) are voluntarily
designated to be temporarily held to function like and be accounted for by
the principles attributed to
endowments.
Return on Investment (ROI) –
Ratio measure of the profits achieved by a firm through its basic operations.
An indicator of management’s
general effectiveness and efficiency.
The simplest version is the ratio of NET
INCOME to total ASSETS.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Realized Gains/Losses – Gains
and losses resulting from the sale of securities in an arm’s length
transaction.
Source: http://www.finet.com.hk/accounting/e.htm
Reconciling – The procedure
of checking entries made in a business’s books with those on a statement sent
by a third person (e.g.
checking a bank statement against your own records)
Source: http://www.accountz.com/glossary.html#f
Reserve – An ACCOUNT used to
earmark a portion of EQUITY or fund balance to indicate that it is not
available for
expenditure. An obsolete term in the
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Restricted Fund – A fund
established to account for assets whose income must be used for purposes
established by donors or grantors of such ASSETS. (See FUND ACCOUNTING and UNRESTRICTED FUNDS)
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Risk – The measurable
possibility of losing or not gaining value.
Risk is different from uncertainty.
Uncertainty
is not measurable.
Source: http://www.ventureline.com/glossary.htm#sectF
Stock Certificate – A
document issued by a corporation to stockholders evidencing ownership in the
corporation.
Source: http://www.ventureline.com/glossary.htm#sectF
Stock Dividend – A pro rata
distribution of additional shares of stock to shareholders.
Source: http://www.finet.com.hk/accounting/e.htm
Stock Power – A form that
permits a Donor to provide the authority to change the name on a stock certificate
from
the Donor’s name to the name
of another party, such as a charitable organization, without using a “transfer
agent”.
This form, together with the
designated stock certificate and Letter of Authorization, given to the
charitable
organization will expedite
the transfer of the Donor’s stock certificate by the charitable organization’s
brokerage
to expedite the sale and
receipt of proceeds from the gift of securities.
Stock Split – The replacement
of outstanding shares of stock with a greater number of new shares that have a
proportionately lower par or
stated value.
Source: http://www.finet.com.hk/accounting/e.htm
Subsidiary Ledgers – Ledgers
opened in addition to a business’s nominal ledger. They are used to keep sections
of a business separate from
each other (e.g. a Sales Ledger for the customers, and a Purchase Ledger for
the
suppliers)
Source: http://www.accountz.com/glossary.html#f
Term Endowment – Endowments
with time restrictions required by the donor such as a restriction that the
income from the endowment may
not be utilized until a future period or a specific date for condition is met.
Thirteenth Month (13th
Month) – The period used for fiscal year-end adjusting entries (periods 1-12
being the
months in the fiscal year).
Source: http://www.ventureline.com/glossary.htm#sectF
Trust – Ancient legal
practice where one person (the GRANTOR) transfers the legal title to an ASSET,
called
the principle or corpus, to
another person (the TRUSTEE), with specific instructions about how the corpus
is to be managed and
disposed.
Source: http://www.nysscpa.org/prof_library/guide.htm#A
Unrealized Gains/Losses –
Gains and losses resulting from changes in the value of securities that are
still being
held.
Source: http://www.finet.com.hk/accounting/e.htm
Unrestricted Funds –
Resources of a not-for-profit entity that have no restrictions as to use or
purpose.
(See FUND ACCOUNTING and
RESTRICTED FUND.)
Source: http://www.nysscpa.org/prof_library/guide.htm#A