CPA Glossary

• Book Value
  The current value of a fixed asset as shown by the records; the difference between the original cost of the asset and the accumulated depreciation. (2) The difference between the accounts receivable and the allowance for bad debts. (3) The value of a share of stock as shown by the corporate books.
  
• Book of Original Entry
  A journal in which transactions are recorded for the first time before summarizing and/or posting to ledger accounts, for example, purchase journal, cash receipts journal, accounts payable journal, disbursements journal, general journal and payroll journal. See General Journal and Journal.
  
• Bill of Lading
  Written document issued by the carrier of goods. Also, a receipt for goods and a contract to deliver goods.
  
• Bankruptcy
  State of being bankrupt.
  
• Bankrupt
   Legal status of a person/corporation who/which is unable to pay its debts as they become due and who/which has made a transfer of property or of a right or interest in property to a trustee for the benefit of creditors.
  
• Bank Reconciliation
  Analysis that accounts for the difference between the balance shown on the bank statement and the balance shown in the accounting records on a given date.
  
• Bank Overdraft
   Balance of a bank account when funds withdrawn exceed funds deposited.
  
• Balance Sheet
   Statement, at a particular point In time, of the financial position of a business or organization-divided into three parts: assets, liabilities and ownership (equity). Also known as Statement of Financial Position.
  
• Balance
  Amount arrived at by adding all debits and subtracting all credits. To ensure total debits equal the total credits.
  
• Bad Debts
  Accounts receivable that are un-collectable Used in Accrual Method accounting.
  
• Authorized Shares or Stock
   The total number of shares a corporation is authorized to sell. This number is specified in the articles of incorporation. All of the shares authorized need not be issued.
  
• Assumed Name
  A name under which a corporation conducts business that is not the legal name of the corporation as shown in its articles of incorporation. If a corporation does business under an assumed name, it may be required to file registration of the assumed name with the state. Also known as a Fictitious Business Name.
  
• Asset
  Anything of value owned or controlled by a corporation or individual. An asset may be tangible or intangible.
  
• Articles of Organization
  LLCs must file the articles with the proper state authorities to begin existence. The articles of organization are very similar to a corporation’s articles of incorporation.
  
• Articles of Incorporation (Certificate of incorporation or charter)
  The articles are the primary legal document of a corporation; they serve as a corporation’s Constitution. The articles are filed with the state government to begin corporate existence. The articles contain basic information on the Corporation as required by state law.
  
• Appreciation
  Increase in value. Often used with reference to an asset, such as land, building, stocks or bonds.
  
• Annuities
  A tax-deferred product that mixes features of an investment and an insurance policy. There are generally two types- fixed annuities (pay a fixed rate of interest) or variable (your return is not guaranteed but you have freedom to choose how your money is invested). Among the advantages: unlike a 401(k) or IRA, there’s no dollar limit on how much you can invest. Among the disadvantages: annuities typically carry relatively high fees and penalties.
  
• Annuity
  A sequence of equal payments, usually made at regular intervals of time.
  
• Annual Meeting of Shareholders
  Nearly all states require a corporation to hold an annual meeting of shareholders at which time directors are elected and other corporate issues are voted on.
  
• Amortization
  Accounting or financial process of reducing an amount by periodic payments or write-downs. Refers to liquidation, writing off or extinguishing of a debt over a period of time.