International Financial Statement Analysis, 3rd Edition

GLOSSARY

Accelerated methods Depreciation methods that allocate a relatively large proportion of the cost of an asset to the early years of the asset's useful life.

Account With the accounting systems, a formal record of increases and decreases in a specific asset, liability, component of owners’ equity, revenue, or expense.

Accounting profit Income as reported on the income statement, in accordance with prevailing accounting standards, before the provisions for income tax expense. Also called income before taxes or pretax income.

Accounts payable Amounts that a business owes to its vendors for goods and services that were purchased from them but which have not yet been paid.

Accounts receivable Amounts customers owe the company for products that have been sold as well as amounts that may be due from suppliers (such as for returns of merchandise). Also called commercial receivables or trade receivables.

Accrued expenses Liabilities related to expenses that have been incurred but not yet paid as of the end of an accounting period—an example of an accrued expense is rent that has been incurred but not yet paid, resulting in a liability “rent payable.” Also called accrued liabilities.

Accrued revenue Revenue that has been earned but not yet billed to customers as of the end of an accounting period.

Accumulated benefit obligation (from Chapter 14 page 701)

Accumulated depreciation An offset to property, plant, and equipment (PPE) reflecting the amount of the cost of PPE that has been ...