Glossary of Terms
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- Data processing:
- The means by which an accounting system gathers data, organizes them into useful forms, and issues the resulting information to users.
- Debit:
- The left side of an account.
- Debt to equity:
- A ratio that measures the relationship of assets provided by creditors to those provided by owners; total liabilities divided by owner’s equity.
- Deferral:
- The postponement of the recognition of an expense that already has been paid or incurred or of a revenue that already has been received.
- Deposit ticket:
- A form filled out by a depositor listing the amounts of coin and currency and each check being deposited in the bank.
- Depreciable Cost:
- Depreciable cost of an asset is its cost less its residual value. For example, a truck that cost $12,000 and has a residual value of $3,000 would have a depreciable cost of $9,000. Depreciable cost must be allocated over the useful life of the asset.
- Depreciation:
- The periodic allocation of the cost of a tangible long-lived asset over its estimated useful life. Also called depreciation expense.
- Direct charge-off method:
- A method of accounting for uncollectible accounts by debiting expenses directly when bad debts are discovered instead of using the allowance method; this method violates the matching rule is required for federal income tax computations.
- Direct costs:
- Production costs that can be traced easily to specific products.
- Direct labor costs:
- All labor costs for specific work performed on products that can be conveniently and economically traced to a product unit.
- Direct materials:
- Materials that become part of the finished product and that can be conveniently and economically traced to a product unit.
- Discount:
- (Verb) to take out interest in advance;
(Noun) the interest amount deducted in advance. - Dishonored note:
- A promissory note that maker cannot or will not pay at the maturity date.
- Double-Declining-Balance Depreciation Method:
- An accelerated depreciation method that computes annual depreciation by multiplying the assets decreasing book value by a constant percentage.
- Double-entry system:
- The account system in which each transaction is recorded with at least one debit and one credit so that the total dollar amount of debits and the total dollar amount of credits equal each other.
- Due care:
- The act of carrying out professional responsibilities competently and diligently.
- Duration of note:
- Length of time in days between the issue date of a promissory note and its maturity date.