A financial arrangement where funds, such as dividends or salaries, are electronically transferred directly into a recipient's bank account, bypassing the need for physical checks.
Direct expenses are expenditures that are directly attributable to the production of a particular cost unit, excluding direct labor and materials.
A Direct Financing Lease is a method used by lessors in capital leases where the lessor purchases an asset specifically for rental purposes. The lease payments must be collectable, and there should be no significant uncertainties about any unreimbursable future costs.
A direct hour is the time spent working directly on a product, service, or cost unit within an organization. It is measured in direct labor hours, machine hours, or standard hours.
Direct investment refers to the purchase of an asset or security directly from the issuer, bypassing financial intermediaries.
Direct labor refers to the cost of personnel that can be directly identified in the production of a product, such as the salary of workers operating machines on a production line but not including administrative or janitorial staff.
Direct Labour refers to the labor involved in the production of goods or services, specifically attributable to specific cost units such as products, services, or machinery usages.
Direct labour cost refers to the expenditures on wages paid to operators who are directly involved in the production of a product, service, or cost unit. It's part of the direct cost of sales and can be measured through the time spent on activities and operators' pay rates.
Direct Labour Efficiency Variance is an essential component in a standard costing system that evaluates the efficiency of labour in completing a given task. It compares the actual labour hours used to the standard hours expected and calculates the variance in cost using the standard direct labour rate.
An hour spent working on a product, service, or cost unit produced by an organization by those operators whose time can be directly traced to the production. Direct labour hours are sometimes used as a basis for absorbing manufacturing overheads to the cost unit in absorption costing.
The direct labour hour rate refers to the rate of pay per hour assigned to operators engaged in direct labour or an absorption rate used in absorption costing. It is computed by dividing the total labor cost by the total direct labor hours worked.
In a standard costing system, a variance arising as part of the direct labour total cost variance. It compares the actual rate paid to direct labour for an activity with the standard rate of pay allowed for that activity for the actual hours worked. The resultant adverse or favourable variance is the amount by which the budgeted profit is affected by differences in direct labour rates of pay.
The Direct Labour Total Cost Variance is a key metric used in cost accounting to analyze the difference between the actual cost of direct labour and the standard cost allocated for the production of goods.
Direct Liability refers to the legal obligation of an individual or business due to negligent acts or omissions that result in bodily injury or property damage to another party, without any intervening circumstances.
Direct mail is a form of advertising in which physical promotional materials are sent directly to the recipients via postal mail. It is the third-largest advertising medium following newspapers and television. This method allows businesses to target specific segments of the population effectively, leveraging addresses and other niche data to tailor campaigns. Direct mail can take various forms, including postcards, catalogs, brochures, and letters.
Direct marketing involves selling products or services via promotions delivered individually to prospective customers, enabling measurable responses through various promotion media.
The Direct Marketing Association (DMA) is an association of direct marketing organizations and their suppliers aimed at promoting the industry's reputation through self-regulation and providing members with educational tools and a forum for idea exchange.
Direct material refers to the cost of material that can be specifically identified with the production of a product, such as wood and nails in furniture manufacturing. It does not include materials used indirectly in the production process, like gasoline for power saws used to fell trees for lumber.
Direct materials are those materials that are directly incorporated into the final product or cost unit of an organization. These raw materials are integral to the manufacturing process and can be easily traced back to the finished product.
Direct materials cost is the expenditure on materials that are used directly in the production process to manufacture a product. This cost is a part of various costing methods and significantly influences the overall production cost.
Direct Materials Inventory represents raw materials in storage that await transfer to production, subsequently forming part of the work in progress.
Direct materials inventory refers to the raw materials that a company keeps in stock for future use in the production process. These materials are a critical part of cost accounting and inventory management.
In standard costing systems, the direct materials mix variance is part of the direct materials usage variance. It represents the difference between the total material used in standard proportions (standard mix) and the material used in actual proportions, valued at standard prices (standard purchase price and standard selling price).
An accounting term used in standard costing to measure the difference between the actual cost of direct materials and the standard cost, identifying favorable or adverse variances that affect budgeted profit.
Direct Materials Quantity Variance measures the efficiency of material usage by comparing the actual quantity used to the standard quantity expected for the output achieved.
A measurement that combines the direct materials price variance and the direct materials usage variance to compare actual and standard costs of direct materials consumed in actual production.
Direct Materials Usage Variance is a key metric in standard costing systems, evaluating the difference between the actual and standard quantities of materials used in production.
Direct Materials Usage Variance measures the efficiency of a company's use of materials in the production process by comparing the actual quantity used to the standard quantity expected to be used.
Direct Materials Yield Variance, also known as Direct Materials Quantity Variance, is a fundamental concept in standard costing systems. It assesses the efficiency in the use of direct materials by comparing the standard quantity allowed for production to the actual quantity used, then valuing this difference at standard prices.
The Direct Method is an accounting approach for preparing a cash-flow statement by aggregating operating cash receipts and payments to demonstrate the net cash flow from operating activities.
Direct overhead refers to the portion of overhead costs allocated to manufacturing through a standard application of burden rate, impacting inventory costs and ultimately reflected in the cost of goods sold.
Direct production refers to the process where a firm has primary responsibility for the production of a particular item, making it the main producer.
The Direct Production Cost of Sales refers to the expenses directly attributable to the manufacturing of goods sold by a company. This includes the costs of raw materials, labor, and other expenses directly involved in production.
Direct response advertising is a type of advertising where the consumer's interaction with the product is primarily through the ad itself, typically resulting in an immediate response such as a phone call or returned coupon. This form of advertising aims to eliminate intermediaries in the purchasing process.
Direct sales involve sources of magazine or other periodical subscriptions sold directly by the publisher without intermediaries, such as subscription agents. These are also known as direct-to-publisher sales.
A direct seller is a person engaged in the trade or business of selling consumer products directly to the end customer either for personal consumption or resale, often through home-based businesses or personal networks.
Taxation, the effect of which is intended to be borne by the person or organization that pays it.
Direct wages refer to the payments made to laborers who are directly involved in the production process of a good or service. These wages are part of the direct labor costs and play a crucial role in cost accounting and financial analysis.
An operator in an organization whose time is spent working on the product or cost unit to such an extent that the operator's time is traceable to the product as a direct cost.
The direct write-off method is a process where bad debts are written off as they occur instead of creating a provision for them. While this method is unacceptable for financial reporting purposes under GAAP, it is the only method allowed for tax purposes in the United States.
Direct-action advertising, also known as direct-response advertising, aims to elicit an immediate response or action from the target audience, such as making a purchase, signing up for a newsletter, or visiting a website.
A direct-reduction mortgage is a type of loan that requires both interest and principal to be paid with each installment, ensuring the loan is fully amortized by the end of its term.
A Directed Verdict is a verdict rendered by a jury at the direction of the trial judge. This usually occurs when one party has not met the legal requirements to proceed with their case or defense.
A person appointed to manage the day-to-day operations of a company, holding fiduciary and statutory duties, and operating within the bounds of corporate governance.
The directorate, also known as directorship, is a group of people elected by shareholders to establish company policies and oversee the management of the organization.
Directors' and Officers' Liability Insurance (D&O Insurance) offers coverage for the personal liabilities of corporate directors and officers arising from their actions or decisions made on behalf of the company. This insurance provides protection against legal judgments and the associated costs of defense such as legal fees and court costs.
Directors' interests refer to the interests held by directors in the shares and debentures of the company of which they are a director. These interests extend to options on shares and debentures and must be disclosed to comply with the Companies Acts.
Directors' remuneration, also known as directors' emoluments, refers to all forms of compensation directors receive from their office or employment. This includes salaries, fees, wages, perquisites, and other profits, as well as expenses and benefits paid or provided by the employer.
An annual report by the directors of a company to its shareholders, which forms part of the accounts required to be filed with the Registrar of Companies under the Companies Act. It includes information on the company's activities, performance, future developments, and other crucial matters.
A directory is an area on a disk where files are stored, which may also contain subdivisions known as subdirectories. Modern operating systems like Microsoft Windows and macOS refer to directories as 'folders'.
A dirty float, also known as a managed float system, is an exchange rate system where the value of a currency is determined by supply and demand factors in the foreign exchange market, but where the government or central bank occasionally intervenes to stabilize or manage the currency.
A dirty float (also referred to as a 'managed float') is an exchange rate system in which a country's currency value is primarily determined by market forces, such as supply and demand, but with occasional intervention by the central bank. This intervention can take the form of buying or selling the country's own currency to stabilize or alter its value. The goal is often to prevent excessive short-term fluctuations and to maintain a more stable economic environment.
A 'disability' is a physical or mental impairment that significantly limits one's ability to perform substantial work for a period of at least one year or is expected to result in death. Qualification for Social Security disability benefits is contingent on meeting this definition.
Income provided under a disability policy, distinct from Workers' Compensation, usually expressed as a percentage of the insured's income prior to disability, with limits on the amount and duration of benefits.
Disability Income Insurance is a type of health insurance that provides income payments to the insured wage earner when income is interrupted or terminated because of illness, sickness, or accident.
The Disability Program is one of the five programs within the Social Security System that provides monthly payments to eligible workers with disabilities and, in some cases, their family members.
Incentives under the Social Security disability program that encourage disabled workers to return to work. The four specific incentives are trial work period, extended period of eligibility, deductions for impairment-related expenses, and Medicare continuation.
Disaffirm refers to the action of repudiating or disclaiming the intention of being obligated under a contract or agreement, often seen in the context of voidable contracts.
Loss from a disaster in an area declared by the President as warranting federal assistance.
Disbursement refers to a payment made by an agent, often a professional such as a solicitor or banker, on behalf of a client. This amount is typically claimed back when the client receives an account for the professional services.
Discharge in bankruptcy refers to the release of a bankrupt debtor from most liabilities pursuant to a confirmed plan of reorganization. Some debts are not subject to discharge.
Discharge in bankruptcy refers to the formal release of a debtor from the legal obligation to pay off all or a portion of their debt, typically following bankruptcy proceedings. It removes the debtor's liability for certain debts while providing a fresh financial start.
A Discharge of Lien is a legal instrument issued by the appropriate authorities or courts that effectively release a lien on property once the underlying debt or claim has been paid or resolved to the satisfaction of the lienholder.
A disciplinary layoff is a suspension or temporary removal of a worker as a penalty for violating work rules on the job. This form of layoff entails the suspension of all salary payments during the layoff period.
A disclaimer is a statement or assertion that denies or renounces a claim, right, or responsibility. It is commonly used in various contexts such as legal claims, property rights, insurance policies, and professional opinions.
A disclaimer of opinion is a statement made by an auditor indicating that they could not obtain sufficient evidence to form an opinion on the financial statements due to a significant limitation on the scope of the audit.
Disclosure involves the provision of financial and non-financial information to stakeholders interested in the economic activities of an organization. It is standard practice for transparency and accountability in modern businesses.
A disclosure statement is a legally required document in which sellers must reveal specified information to potential buyers. It ensures transparency in various transactions, particularly in real estate and investment interests.
Discontinued operations refer to the sale, disposal, or planned sale in the near future of a business segment, such as a product line or class of customers. The financial results of these operations are reported separately in the income statement.
Discontinued operations refer to components of a business that have been sold or permanently closed down, and their financial results are separated from continuing operations for reporting purposes.
A discount granted by a company to a client, for example for a bulk purchase or a prompt payment. It is shown as an expense in the profit and loss account.
A discount bond is a bond sold for less than its face value or par value. When the bond matures, the investor receives the face value of the bond. Discount bonds can be treasury, municipal, corporate, etc. They offer a way for the issuer to raise capital by selling at a reduced price.
A brokerage house that executes orders to buy and sell securities at rates lower than those charged by a full-service broker. In real estate, provides fewer services at reduced commissions.
The discount factor, also known as the present-value factor, is a figure used to determine the present value of future cash flows by considering the time value of money and a specific hurdle rate.
A discount house, typically a specialized financial institution or bank, focuses on operating in the discount market, primarily dealing with the discounting of bills of exchange, including Treasury bills.
In the realm of accounting, a 'discount' refers to a variety of reductions applied to amounts due or outstanding, impacting both operational transactions and financial statements.
In the UK, the discount market refers to a segment of the money market where banks, discount houses, and bill brokers engage in the discounting of bills and short-term financial instruments to facilitate liquidity and profitability.
Discount points are amounts paid to the lender at the time a loan is originated, often by the seller, to bridge the gap between the market interest rate and the lower face interest rate of the note.
An interest or cost of capital rate applied to discount factors in discounted cash flow (DCF) appraisals, used in determining the present value of future cash flows.
A discount granted to a supplier for bulk purchases or prompt payment, usually recorded as a credit in the profit and loss account, reducing the overall expense.
A retail store offering a broad range of merchandise similar to department stores but at lower prices, often focusing on budget-conscious consumers.
The Discount Window is a facility provided by the Federal Reserve where banks can borrow money at the discount rate. This facility is meant for financial institutions that are in need of short-term funding to meet reserve requirements.
Discount yield is a method to calculate the annualized yield on a security sold at a discount, such as U.S. Treasury bills. It provides an approximation of the return on investment based on the difference between the purchase price and the face value of the security.
Discounted Cash Flow (DCF) is a valuation method used to estimate the attractiveness of an investment opportunity. DCF analysis uses future free cash flow projections and discounts them to arrive at a present value estimate, which is then used to evaluate the potential for investment.
Discounted Cash Flow (DCF) is a financial valuation method used to appraise investments, architectures in capital budgeting, and other expenditure decisions by analyzing the predicted cash flow stream (incomes and outflows) and discounting them to present values using a specific cost of capital or hurdle rate.
A discounted loan is a financial instrument that is offered or traded for less than its face value. It involves an initial discount from the loan's nominal amount, effectively making it cheaper for the borrower at inception.
Discounted Payback Method is a method of capital budgeting in which managers calculate the time required for the forecasted discounted cash inflows from an investment to equal the initial investment expenditure, considering the time value of money.
Discounted Present Value (DPV) is a financial metric used to determine the current worth of a series of future cash flows, discounted back to their present value. It helps in evaluating the profitability and feasibility of investments and projects.
The discounted value is the present worth of a future sum of money or stream of cash flows, given a specific rate of discount. It plays a critical role in various financial assessments.
Discounting refers to the application of discount factors to cash flow projections in discounted cash flow analysis and the process of selling a bill of exchange before its maturity at a discounted price.
Discounting the news refers to the practice of adjusting a firm's stock price in anticipation of forthcoming good or bad news regarding the company's prospects.
Discovery is a modern pretrial procedure by which parties gain information held by the adverse party. Common types of discovery include depositions, interrogatories, and the production of documents.
A statistical method used in auditing and quality control to ensure that the proportion of units with a particular attribute (such as an error) does not exceed a predefined threshold in a population.
Discovery value accounting is a widely used method in the USA for extractive enterprises, where increases in discovered reserves elevate the value of assets and predict future earnings.
In various professional fields, a discrepancy refers to the deviation between what is expected and what actually occurs, or the disagreement between conclusions of multiple parties regarding the same matter.
Discretion refers to the freedom of a person to make choices within the boundaries of their authority, as well as the quality of being cautious and considerate in what one says or does.
Discretionary costs are expenses that can be easily adjusted or managed by a firm’s management, often including items such as advertising, repairs and maintenance, and research and development.
Discretionary Costs, also known as Managed Costs, are those costs incurred as a result of managerial decisions where the extent of these costs is subject to managerial discretion. These costs often relate to specific amounts or follow a pre-determined formula, such as a percentage of sales revenue. Examples include advertising and research expenditure.
Discretionary income is the amount of spendable income remaining after the purchase of physical necessities, such as food, clothing, and shelter, as well as the payment of taxes. Marketers of goods other than necessities compete for the consumer's discretionary dollars by appealing to various psychological needs, as distinguished from physical needs.
Discretionary Policy refers to government economic policies that are not automatic or built into the system but require active intervention by policymakers to influence economic activities.
