Debasement is the act of deliberately rendering a currency less valuable, not through devaluation but by reducing the precious metal content of the coinage.
A debenture is the most common form of long-term loan taken by a company, offering a fixed date for repayment and often secured against the borrower's assets.
A capital reserve created to ensure that funds are available for the redemption of debentures at maturity, limiting profits available for distribution but not providing actual redemption funds directly.
An agreement specifying the rights of debenture holders, often including the power to appoint a receiver in cases of company default.
A debit is an entry on the left-hand side of an account in double-entry bookkeeping that increases assets or recorded expenditures of an organization. In the context of a bank account, a debit indicates an outflow of funds.
In accounting, a debit (DR) refers to any entry recording an addition to an asset or expense account, or a reduction from a liability or equity account.
Understanding the fundamental rules of debit and credit in double-entry bookkeeping is essential for accurate financial accounting.
A debit balance is the balance of an account where the total debit entries exceed the total credit entries. This typically indicates expenditures or assets on a company's financial statements.
A plastic card issued by a bank or building society that allows customers to pay for goods or services at retail outlets by directly debiting their accounts using a telephone network.
An essential accounting term used in double-entry bookkeeping to record increases in assets or expenses and decreases in liabilities, revenues, or equity.
A debit memorandum is a notice sent by a bank or financial institution indicating a deduction or charge made to an account, often due to reasons such as insufficient funds or returned checks.
A debit note is a document sent by an organization to a person, indicating the recipient's indebtedness to the organization for the amount shown. Debit notes are less common than invoices and are used in specific scenarios such as inter-company transfers other than the sale of goods or services.
Debt is an amount of money borrowed by one party from another, which is often incurred by businesses and individuals to finance specific activities or projects.
Debt administration refers to the process of managing and overseeing the repayment of debts, ensuring that they are correctly and timely settled in compliance with agreed terms and conditions.
Debt capital refers to borrowed funds that a firm utilizes to support its business operations, growth, or investment projects. These funds come with the obligation to pay back with interest and can be sourced from various lenders, such as banks, bond investors, or other financial institutions.
The debt ceiling is the maximum amount of money that the federal government is allowed to borrow. When the federal government approaches the ceiling, Congress must raise it in order to authorize additional borrowing and the issuance of new debt by the Treasury.
An organization that specializes in collecting the outstanding debts of its clients, typically charging a commission for their recovery services.
The Debt Coverage Ratio (DCR) is a financial metric used to evaluate the ability of an income property to cover its debt-related obligations, often applied in the underwriting of mortgage loans.
Debt Discharge Income refers to the forgiven portion of outstanding debt that becomes taxable income to the borrower, subject to specific exemptions.
Debt financing is the process of raising capital through borrowing, typically via the issuance of bonds. It contrasts with equity financing, where capital is raised through the sale of ownership stakes in the company (stock).
A debt instrument is a document used to raise non-equity finance, typically consisting of a promissory note, bill of exchange, or any other legally binding bond.
The debt limit refers to the maximum amount of debt that a municipality or other applicable entity can incur. It is a critical financial constraint that ensures entities do not exceed prudent borrowing levels.
Debt restructuring involves adjustments to the terms of debt, either through legal action or by agreement, to provide more favorable conditions for the debtor to meet financial obligations. It can involve both corporate and sovereign entities.
Debt retirement refers to the repayment of outstanding debt, which is often achieved through mechanisms such as sinking funds, amortization, or prepayment. It is essential for managing corporate and personal finance efficiently.
A security representing money borrowed that must be repaid, typically having a fixed amount, specific maturity, and usually a specific rate of interest or an original purchase discount.
Debt service refers to the cash required in a given period, usually one year, for payments of interest and current maturities of principal on outstanding debt. This includes obligations from mortgage loans, corporate bond issues, and government bonds. Understanding debt service is crucial for assessing the financial stability and repayment ability of an individual or entity.
Debt service coverage is a critical financial metric used in corporate, government, personal, and real estate finance to measure the availability of cash flow for meeting annual debt obligations.
A financial ratio illustrating the proportional relationship between a company's debt and its equity, reflecting its financial leverage and risk.
The Debt-to-Equity Ratio is a financial metric that indicates the relative proportion of shareholders' equity and debt used to finance a company's assets.
The debt/equity ratio is a financial metric that indicates the relative proportion of a company’s debt to its total equity. It demonstrates how leveraged a company is in terms of its debt financing compared to its equity financing.
A debtor is an individual or entity that owes money to another party, typically referred to as a creditor. In bankruptcy or similar legal proceedings, a debtor is the subject on whom the actions are primarily focused.
Debtor Collection Period, also known as Average Collection Period, is the average time it takes for a business to collect the money owed to it by its trade debtors. This period is critical for managing cash flow effectively.
Debtors refer to individuals or entities that owe money to an organization, often due to sales of goods or services. This concept is significant in accounting as it affects the balance sheet and requires careful management to ensure accurate financial reporting.
The Debtors' Ledger, also known as the Sales Ledger or Sold Ledger, is a memorandum ledger account where individual debtors' accounts are recorded. It is an essential component in the internal control system used to monitor sales, payments, discounts, and returns.
A nominal ledger control account recording the total of entries made to individual debtors' ledgers from the sales day book and the cash receipts journal, used to ensure internal accounting controls.
Debugging is the process of identifying, analyzing, and removing bugs or errors from computer programs. It is a critical aspect of software development, ensuring that programs run smoothly and efficiently.
A decedent is a term used in law and in financial contexts to refer to a person who has died. It is most commonly used in the context of estates, taxes, and legal proceedings.
The delegation of decision-making responsibilities to the subunits of an organization. The advantages claimed for decentralization are that local managers are more aware of immediate problems, are better motivated, and have greater control over local circumstances. The disadvantages are the possibility of wasteful competition between subunits, duplication of services, and the loss of central control and access to information.
Deceptive advertising refers to marketing practices that make false claims or misleading statements, creating a false impression about products or services.
Deceptive packaging refers to packaging that creates a misleading impression about the quantity or quality of the product it contains.
The act of deciding between alternative courses of action. In the running of a business, accounting information and techniques are used to facilitate decision making, employing models like discounted cash flow, critical-path analysis, marginal costing, and breakeven analysis.
A decision model is a mathematical simulation of the variables and elements inherent in business decisions, aimed at achieving the objectives of an organization by analyzing the relationships and constraints among those variables.
A Decision Package is a crucial procedure in Zero-Base Budgeting (ZBB) where a manager details recommended and alternative ways to undertake a proposed project, specifying the associated costs and time requirements.
A Decision Support System (DSS) is a computerized information system used to support decision-making activities in an organization, typically integrating various data sources and analytical models to assist in decision-making processes.
A computer-based program that aids managers in making decisions, particularly in situations where problem structures are not well-defined.
A Decision Support System (DSS) is an information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels of an organization and help in making decisions, which may be rapidly changing and not easily specified in advance.
A decision table is a tool used to aid decision making by listing problems that require actions, alongside the estimated probabilities of outcomes. When probabilities are hard to estimate, criterions like maximax and maximin are used to choose the most favorable action.
A decision tree is a diagram that illustrates all possible consequences of different decisions at various stages of decision-making, used primarily in decision analysis and machine learning to visualize decision paths.
A Decision Tree is a graphical representation used for making decisions and mapping possible outcomes based on different choices. The tree structure allows for evaluating the impact of decisions and estimating their probabilities and expected values.
A comprehensive term in law which can refer to formal pleadings, legal documents related to condominium creation, and statements made by an insured for insurance purposes.
A statement in which the directors of a company announce that a dividend of a certain amount is recommended to be paid to the shareholders, and the liability is recognized when declared.
A requirement for taxpayers who do not have adequate tax withheld regularly, often applicable to self-employed individuals. It ensures that taxpayers can manage their tax liability by paying estimated taxes quarterly.
This is a filed statement that a taxpayer must submit to the IRS that includes an estimate of the amount of income tax owed for a particular year. It is typically used by individuals who do not have their taxes automatically withheld from their paycheck.
A Declaration of Trust is a written statement by a trustee acknowledging that the property is held for the benefit of another party.
A declaratory judgment is a legal determination made by a court to establish the rights of the parties or provide a court's opinion on a question of law without requiring any action to be taken.
In various contexts, 'declare' means to announce formally or officially. It has distinct applications in finance, importation, and taxation.
The declining balance method is a commonly used depreciation technique in accounting where an asset loses value by a fixed percentage each year, reflecting the reality that assets tend to lose more value early in their useful lives.
A method of accelerated depreciation where a percentage rate of depreciation is applied to the undepreciated balance, rather than the original cost. It is commonly used to depreciate assets that lose value quickly early in their useful lives.
Decommissioning costs represent the expenditures associated with ending an operation or activity, which might include dismantling infrastructure such as an oil rig and restoring the affected environment.
An economic phenomenon where unit costs of production decline as the scale of operation or output volume increases, often due to factors like economies of scale and increased efficiency in production processes.
Decreasing returns to scale is a characteristic of the production of a good that requires proportionally higher amounts of inputs to produce each unit of output as the amount of output increases.
A decree is an authoritative order or official legal proclamation issued by a person or body with administrative or judicial jurisdiction. It primarily serves as a final court order or decision.
Decryption is the process of converting encoded or encrypted information into a readable and understandable format. It is the reverse of encryption, which is the process of converting readable data into an unreadable format to protect its integrity and confidentiality.
A dedicated line is a communication link used exclusively for a specific purpose, such as connecting a fax machine or modem, or providing a permanent connection to the Internet.
Dedication of land, also known as conveyance, is the practice of a private landowner granting a piece of land to the public, typically represented by a governmental entity, which accepts ownership. This is often done to promote goodwill or fulfill legal requirements.
In a tax return, applies to an expense that may be subtracted from income, and in insurance, signifies the initial amount the insured must pay before insurance reimbursement is made for a claim.
A deduction is an amount allowed to taxpayers under the Internal Revenue Code as an offset against gross income or adjusted gross income.
Deductions at Source, also known as withholding tax, involve a method of tax collection where a portion of income is deducted at the time of payment by the payer to ensure timely and efficient tax collection.
Deductions from Gross Income refer to the allowable reductions from an individual's gross income to arrive at their taxable income, applicable within the framework of personal income tax.
Deductive reasoning is a logical method of coming to a conclusion by deducing from established facts what actions to take or what assertions to accept.
A legal document in writing that conveys an interest in land (real estate) from the grantor to the grantee, primarily functioning to transfer the title of the land.
A deed in lieu of foreclosure is a legal process where a borrower voluntarily transfers the ownership of property to a lender to satisfy a loan that is in default and avoid foreclosure proceedings.
A written agreement between a debtor and their creditors, registered with the Insolvency Service, which outlines the repayment of debts or restructuring of debtor's affairs.
A Deed of Partnership is a formal agreement drawn up in the form of a deed which outlines the respective capital contributions, profit-sharing percentages, and other significant details among partners in a partnership business.
A legal document transferring the title of property from its owner to a trustee, who holds it as security for a performance of obligations by the owner or a third party.
A deed by which the beneficiary under a will or an intestacy redirects the gift to some other person (who may or may not be a beneficiary of the estate). Provided this is done within two years of the deceased's death and statutory requirements are complied with, the redirection is not treated as a gift for inheritance tax or capital gains tax purposes.
A deed restriction is a clause in a deed that limits the use or the disposition of real estate property. These restrictions can dictate various uses and modifications of land or property ownership transfers and are legally binding.
Deemed cost represents a substituted value for the net book value of an asset when an entity transitions to a new accounting regime. This approach allows entities to treat assets as if initially recognized at this value on the specified date.
A deep discount bond is a debt security that sells for a substantial amount below its face value, often at a discount of more than 25%. Unlike original issue discount bonds, these bonds were initially issued at their par value but have since declined in market value.
A marketplace characterized by a high volume of transactions for a security, commodity, or currency, featuring narrow bid-offer spreads and the ability to handle sizable transactions without significant price movement.
A term used to describe a person or entity with a substantial amount of financial resources or assets, making them a potential target for litigation due to their perceived ability to pay large settlements or awards.
Seemingly inexhaustible financial resources, permitting one to remain in business after a prolonged period of negative cash flow. Also, often in litigation, the party having money to pay the claim.
A loan stock or government security issued on terms that make the redemption value significantly higher than the issue price, often with more than 15% discrepancy or ½% per completed year.
Defalcation is a financial crime that involves the embezzlement of property or funds by an individual entrusted with its custody or control.
Default in the context of accounting refers to the failure to fulfill a contractual or other legal obligation, including settling debts, defending legal proceedings, or submitting and paying Value Added Tax (VAT) on time.
A judicial ruling in favor of the plaintiff when the defendant fails to respond to the legal action or fails to appear in court.
Interest that has not been paid on time. Implies a more serious state of delay than past-due or delinquent.
Irrevocably committing specific assets to meet long-term obligations, providing a method to eliminate liabilities from a company's balance sheet that cannot be repaid early.
Defective refers to something that is incomplete or faulty. In legal and consumer contexts, it signifies that an item is not reasonably safe for a use that can be reasonably anticipated.
Defective Accounts refer to financial records that do not comply with legislative or accounting standards, necessitating revision as per the Companies Act.
A defective title refers to an ownership right or claim on property, particularly real estate or negotiable instruments, that is legally flawed or encumbered in a manner that diminishes its marketability or validity.
In legal contexts, a defendant is a party against whom a lawsuit has been filed in a civil proceeding or an individual charged with a crime in a criminal proceeding.
In the context of legal proceedings, the defendant's principal pleading is a formal written response to the plaintiff's complaint, containing denials of the allegations, affirmative defenses, and any potential counterclaims.
A defended takeover bid refers to an acquisition attempt where the directors of the target company actively oppose the bid, employing various defenses to prevent the takeover.
A ratio that demonstrates the ability of a business to satisfy its current debts by calculating the time for which it can operate on current liquid assets, without needing revenue from the next period's sales.
Defensive securities are stocks and bonds that offer greater stability and relatively safe returns, especially during market downturns.
Defensive spending refers to strategic expenditures by a company aimed at maintaining its market position and countering competitive threats. It is closely related to the concept of competitive parity.
Deferral of taxes allows an individual or business to postpone the payment of taxes from the current year to a later year, providing financial flexibility and potentially reducing the overall tax burden.
A deferred account is a financial account that postpones tax obligations until a later date, allowing the account holder to potentially reduce their current tax burden.
A deferred annuity is an annuity in which payments do not start at once but either at a specified later date or when the policyholder reaches a specified age.
