Glossary of Terms
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- Receiving report:
- A form prepared by the receiving department of a company that describes the quantity and condition of goods received.
- Recognition:
- The determination of when a business transaction should be recorded.
- Recognition point:
- The predetermined time at which a transaction should be recorded; usually, the point at which title passes to the buyer.
- Relevance:
- Bearing directly on the outcome of a decision; a qualitative characteristic of accounting makers.
- Relevant range:
- The span of activity in which a company expects to operate.
- Reliability:
- Having the traits of representational faithfulness, verifiability, and neutrality; a qualitative characteristic of accounting information.
- Residual Value:
- Residual value of an asset is its estimated net scrap, salvage, or trade-in value as of the estimated date of disposal.
- Retail method:
- A method of inventory estimation used in retail businesses by which inventory at retail value is reduced by the ratio of cost to retail price.
- Retained Earnings:
- The account that reflects the stockholders' claim to the assets earned from operations and reinvested in corporate operations. Also called Earned Capital.
- Return on assets:
- A measure of profitability that shows how efficiently a company is using its assets; net income divided by average total assets.
- Return on equity:
- A measure of profitability related to the amount earned by a business in relation to the owner's investment in the business; net income divided by average owner's equity.
- Revenue recognition:
- In accrual accounting, the process of determining when a sale takes place.
- Revenues:
- The price of goods sold and services rendered over a specific period of time. Increases in owner's equity that result from operating a business.
- Revenues from sales:
- The amount received for the goods sold during an accounting period.
- Reversing entry:
- An entry made on the first day of a new accounting period that is used to reverse certain adjusting entries and designed to simplify the bookkeeping process for the next accounting period.