Duress
Duress refers to a situation where one party is compelled to act contrary to their free will due to improper threats, violence, or other forms of coercion. It can serve as a defense in cases of crime, breach of contract, or tort.
Dutch Auction
An auction system where the price of an item is gradually lowered until it meets a responsive bid and is sold. U.S. Treasury bills are sold under this system, which contrasts with the two-sided or double-auction system used by major stock exchanges.
Duty
A detailed explanation and exploration of the term 'Duty,' including its application in taxation, fiduciary obligations, and additional contexts.
DVD
A DVD (Digital Versatile Disc or originally Digital Video Disc) is an optical disc storage format capable of storing large amounts of data, far greater than that of a CD-ROM.
Dwelling
A dwelling refers to a place of residence where individuals or families live, such as houses, apartments, and other structures intended for habitation.
Dynamic Pricing
Dynamic pricing, also known as real-time pricing or surge pricing, is a strategy where the price of a product or service fluctuates based on market demands, customer segments, time, and other variable factors.
E-Banking
E-Banking, also known as electronic banking or internet banking, enables customers to perform financial transactions over the internet through a secure and portable means, allowing for convenience and speed compared to traditional banking methods.
E-Billing
A digital method for generating, sending, and receiving invoices, typically replacing traditional paper-based billing systems.
E-commerce
E-commerce refers to the use of the Internet to buy and sell goods and services. At the simplest level, a company will have a website showcasing product details and contact information.
E-Mail Address
An e-mail address is a unique identifier for an e-mail account, typically used to send and receive electronic messages over the internet. A standard e-mail address format is username@domain.com, where 'username' is the recipient’s email account and 'domain.com' represents the mail server.
E-Type Reorganization
An E-Type Reorganization, also known as Recapitalization, is a type of corporate restructuring under the Internal Revenue Code that involves significant changes in the composition of a company's capital structure.
Each Way Commission
Each way commission refers to the fees a broker earns for handling both the purchase and the sale sides of a trade.
Eager Beaver
An eager beaver refers to a very hard-working individual who is anxious to succeed. This person puts in many hours and is always busy, driven by a strong desire for promotion and high compensation.
Early Repayment Tax Clause
An Early Repayment Tax Clause is a provision in a loan agreement that allows the borrower to repay the loan early if changes in relevant tax legislation increase the amount of interest payable.
Early Retirement
Early retirement refers to the act of leaving one's job before reaching the normal retirement age, and meeting certain minimum requirements related to age and years of service. This often results in a reduction of the monthly retirement benefit received.
Early-Retirement Benefits
Early-retirement benefits are benefits a person is entitled to when retiring before the formal retirement age. Early retirement is increasingly common in the United States.
Early-Withdrawal Penalty
An early-withdrawal penalty is a charge assessed against holders of fixed-term investments, such as certificates of deposit (CDs), when they withdraw their funds before the maturity date.
Earn-Out
An Earn-Out is a financial agreement used in mergers and acquisitions (M&A) where supplementary purchase payments are made to the seller contingent upon the acquired company achieving certain future financial goals, typically based on earnings, revenues, or other performance metrics.
Earn-Out Agreement
An earn-out agreement is a contingent contract used in M&A transactions where the purchaser pays an initial amount at acquisition and agrees to pay additional future sums contingent on the target company meeting specified performance targets.
Earned Income
Earned income is a critical concept in the financial landscape, particularly for tax purposes, and encompasses income from employment, trades, professions, and more.
Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC) is a refundable tax credit aimed at helping low- to moderate-income working individuals and families, particularly those with children. It serves to reduce the amount of tax owed and may result in a refund.
Earned Surplus
Earned Surplus, also known as Retained Earnings, represents the portion of net income that is retained by a company rather than distributed to its shareholders as dividends. These retained earnings are reinvested in the business or used to pay off debt.
Earnest Money
An earnest money deposit is a type of advance payment made by a purchaser of real estate to show their commitment and good faith during the home-buying process.
Earnings
Earnings, also referred to as net income or profit, is a crucial metric in financial reporting which forms the basis for calculating earnings per share. A key aspect of corporate finance, earnings definition and reporting have evolved to curb creative accounting and ensure transparency.
Earnings and Profits
Earnings and Profits refers to the economic capacity of a corporation to make a distribution to shareholders that is not considered a return of capital. If distributed, it constitutes a taxable dividend to the shareholder to the extent of current and accumulated earnings and profits.
Earnings Before Interest and Tax (EBIT)
A crucial metric in assessing a company's core operating performance by excluding the effects of finance and tax expenses from operating profit calculations.
Earnings Before Taxes (EBT)
Earnings Before Taxes (EBT) measures a company's profitability, calculated as sales revenues minus cost of sales, operating expenses, and interest expenses, before taxes have been deducted.
Earnings Per Share (EPS)
Earnings Per Share (EPS) represents a portion of a company's profit allocated to each outstanding share of its common stock. It is a significant factor in evaluating a company's profitability and its stock outlook.
Earnings Per Share (EPS)
A comprehensive exploration of Earnings Per Share (EPS), detailing its calculation, significance, and application under International Accounting Standards.
Earnings Per Share (EPS)
Earnings Per Share (EPS) is a commonly used metric in financial analysis to measure the profitability of a company by dividing its net income by the number of outstanding shares of common stock.
Earnings Report
An earnings report is a document that details the financial performance of a publicly held company over a specific period, typically issued monthly or quarterly. It may be an internal report and does not necessarily have to be the annual report.
Earnings Yield
Earnings yield is the ratio of the earnings per share of a company to the market price of the share, expressed as a percentage. It is an important metric for evaluating the profitability of a company relative to its share price.
Easement
An easement is a limited right to use another's land for a specific purpose, like installing utility lines. This right does not infringe upon other existing uses of the land and is considered a privilege associated with the land, not a possessory interest.
Easy Money
Easy money refers to a state of the national money supply when the Federal Reserve System allows ample funds to build in the banking system, resulting in lowered interest rates and increased loan accessibility, which encourages economic growth and can potentially lead to inflation.
Eating (A Competitor's) Lunch
Eating a competitor's lunch refers to aggressively outperforming and gaining market share from competing firms through strategies like aggressive pricing, superior product offerings, or enhanced customer service.
eBay
eBay is an online auction and shopping website where people and businesses buy and sell a wide variety of goods and services worldwide. Established in 1995 and headquartered in San Jose, California, eBay operates as an online auctioneer, enabling individuals to buy and sell nearly anything through the Web.
EBIT (Earnings Before Interest and Taxes)
EBIT, an abbreviation for Earnings Before Interest and Taxes, represents a company's profit as indicated on the profit and loss account before the deduction of interest and tax expenses. This figure is instrumental in calculating multiple financial ratios and facilitates more straightforward comparisons between companies.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
EBITDA is a measure of a company's overall financial performance and is used as an alternative to net income in some circumstances. It focuses on the earnings generated from the core business operations by excluding interest, taxes, depreciation, and amortization expenses.
ECGD (Export Credits Guarantee Department)
The Export Credits Guarantee Department (ECGD), now known as UK Export Finance (UKEF), is the United Kingdom's export credit agency, which is responsible for providing guarantees and insurance to UK-based businesses to help them export goods and services. This government department facilitates international trade by offering financial support and risk management solutions.
Echelon
In organizational and military contexts, 'echelon' refers to a level of activity with specific responsibilities or a subdivision of a military force.
Echo Boomers
Echo Boomers, also known as Millennials, are the generation that follows Generation X and is often seen as the children of Baby Boomers. This demographic cohort is characterized by their unique relationship with technology, communication styles, and consumption patterns.
Ecology
Ecology is the branch of environmental science that studies the interactions among organisms and their environment, aiming to maintain systemic natural balance where all living things can coexist in harmony.
Econometrics
Econometrics involves using computer analysis and statistical modeling techniques to mathematically describe numerical relationships between key economic forces such as labor, capital, interest rates, and government policies, and test the effects of changes in economic scenarios.
Economic
The term 'economic' pertains to matters related to the economy or the study of economics, encompassing various aspects such as production, consumption, and distribution of goods and services within a society.
Economic Accrual of Interest
Economic accrual of interest refers to the cost of an indebtedness for a given period, calculated by multiplying the period’s interest rate by the unpaid loan balance, including prior accrued interest.
Economic Analysis
Economic Analysis pertains to the systematic study and understanding of trends, phenomena, and information that are economic in nature, aimed to decipher how economies function and to predict future economic conditions.
Economic Appraisal
Economic appraisal is a method of capital budgeting that uses discounted cash flow techniques to determine the preferred investment by discounting the expected annual economic costs and benefits over the project's life. This method is particularly used for assessing governmental or quasi-governmental projects such as road, railway, and port developments.
Economic Base
The term 'Economic Base' refers to the core industries and businesses within a geographic market area that generate the bulk of the employment and economic activity. These industries drive the local economy by attracting financial resources from outside the area, thus providing income and employment opportunities that support the community. Understanding the economic base is crucial for policymakers and business planners to foster sustainable economic development.
Economic Benefits
Economic benefits represent the gains realized from an improvement in facilities or services provided by a government or local authority, usually expressed in financial terms.
Economic Costs
Economic costs represent the projected costs revealed by an economic appraisal, excluding transfer payments within the economy such as taxes and subsidies.
Economic Cycle
An Economic Cycle refers to the fluctuating levels of economic activity that an economy goes through over a period of time, commonly classified into phases such as expansion, peak, contraction, and trough.
Economic Efficiency
Economic efficiency refers to the optimal allocation of resources where they are most valued and the production and distribution of goods and services occurs at the lowest possible cost. It ensures that no further improvements can be made in one person's well-being without making someone else worse off.
Economic Exposure
Economic exposure, also known as operating exposure, encompasses the potential impact of changes in macroeconomic variables and exchange rates on the value of a business engaged in international trade.
Economic Freedom
Economic freedom refers to the absence of regulation or other dictates from government or other authority in economic matters, enabling efficient allocation of resources in a capitalist system.
Economic Goods
Economic goods are commodities and products that require effort and resources, and are available at a price in the market. They are distinct from freely available goods or those with no utility.
Economic Growth
Economic growth refers to the increase, from period to period, of the real value of an economy's production of goods and services, commonly expressed as an increase in Gross Domestic Product (GDP).
Economic Growth Rate
The economic growth rate is a key indicator of the increase in a nation's economic activity, represented by the annual percentage change in Gross Domestic Product (GDP). When adjusted for inflation, it is known as the real economic growth rate.
Economic Income
Economic income is calculated by comparing the net present value of future cash flows at the beginning and end of a period. It measures the wealth generated by an entity's operations and can provide a more accurate reflection of financial performance than accounting income.
Economic Indicators
Economic indicators are key statistics that provide insight into the state of the economy. They help policymakers, business leaders, and investors make informed decisions about economic activities.
Economic Inefficiency
Economic inefficiency refers to the misallocation of society's resources, where a different distribution can improve the well-being of some without reducing the well-being of others.
Economic Life
Economic Life refers to the period during which a machine or other property is expected to generate more revenue than operating expenses, thereby staying profitable and justifying its use.
Economic Loss
Economic loss is a situation in which a producer does not earn the level of profit that would justify remaining in business in the long run. It refers to both the reduction in revenue and the consequent decision-making impacts on the business's viability.
Economic Obsolescence
Economic obsolescence in real estate refers to the loss of property value due to external factors outside the property itself. For instance, an expensive private home may lose value if an industrial plant is built nearby. This factor must be considered during the property's appraisal.
Economic Order Quantity (EOQ)
An inventory decision model used to calculate the optimum amount to order, balancing the fixed costs of ordering and receiving against the carrying cost of inventory and sales. Utilized in both manufacturing and retail inventory management.
Economic Order Quantity (EOQ)
The Economic Order Quantity (EOQ) is a formula used by businesses to determine the optimal order quantity that minimizes the total inventory costs associated with ordering and holding stock.
Economic Rent
Economic rent refers to the payment to a factor of production or a resource above its opportunity cost. It usually applies to resources that are unique or inelastic in supply.
Economic Sanctions
Internationally, restrictions upon trade and financial dealings that a country imposes upon another for political reasons, usually as punishment for following policies of which the sanctioning country disapproves.
Economic System
The basic means of achieving economic goals inherent in the economic structure of a society. Major economic systems include capitalism, fascism, socialism, and communism.
Economic Value
Economic value is the present value of future cash flows expected to be generated by an asset. It provides a measure of the worth of an asset considering its future income and cost streams.
Economic Value Added (EVA)
Economic Value Added (EVA) is a performance measure used to evaluate a company's economic profit, which represents the value added to a company by its activities within a given time period.
Economic Value Added (EVA)
Economic Value Added (EVA) is a financial performance measure that calculates the value created beyond the required return on the company's capital. It is an indicator of reflecting a company's ability to generate profit while taking into account the opportunity cost of capital employed.
Economics
Economics is the study of how societies allocate scarce resources. It includes the examination of production, distribution, exchange, and consumption of goods and services.
Economics and Statistics Administration (ESA)
A division of the U.S. Department of Commerce that provides timely economic analysis, disseminates national economic indicators, and oversees the U.S. Census Bureau and the Bureau of Economic Analysis (BEA).
Economies of Scale
Economies of scale refer to the cost advantages that a business obtains due to expansion, which result in the reduction of per-unit costs as the scale of operation increases.
Economies of Scope
Economies of scope refer to cost efficiencies that a business achieves by diversifying its product lines, leveraging shared resources and capabilities to produce a wider array of products.
Economies of Scope
Economies of scope refer to the increases in efficiency and potential sales that businesses experience when they produce, distribute, and market a range of products rather than focusing on a single product or type of product.
Economist
An economist is a professional who studies and analyzes economic data and trends to provide insights and forecasts regarding economic matters, influencing policy, investment decisions, and business strategies.
Economy
A recognizable and cohesive group of economic performers, including producers, labor, and consumers, who interact largely together in a geographically or industry-defined space.
Edge Act Corporation
An Edge Act Corporation is a subsidiary of a U.S. bank that can offer international banking services across state and national borders, under the authority of the Federal Reserve.
Edict
An edict is an official organizational decree that is published to communicate a policy statement, ensuring everyone is aware of an organization's position on a particular matter.
Education Savings Bond Program
The Education Savings Bond Program allows individuals to exclude interest income from certain U.S. government bonds, issued after 1989, from their taxable income when using the funds to pay for qualified higher education expenses. These bonds include Series EE and Series I Bonds.
Education: An Overview
Education is the process of facilitating learning or the acquisition of knowledge, skills, values, beliefs, and habits. It spans various domains, including formal, informal, non-formal, and special education.
Effective Annual Rate (EAR)
The total interest paid or earned in a year, expressed as a percentage of the principal amount at the beginning of the year. The Effective Annual Rate provides a clear picture of the actual annual cost or earnings, considering compounding periods during the year.
Effective Date
The Effective Date refers to the specific date on which an agreement, policy, or offering formally goes into effect and becomes enforceable.
Effective Debt
Total debt owed by a firm, including the capitalized value of lease payments, providing a comprehensive overview of a company's financial obligations.
Effective Gross Income (EGI)
Effective Gross Income (EGI) represents the potential gross income generated from rental real estate, adjusted for a vacancy and collection allowance, plus any miscellaneous income.
Effective Interest Rate
The effective interest rate is a key financial metric calculated from the purchase price of a debt instrument. It provides a more precise measure of the actual yield on a bond compared to the face interest rate or coupon rate.
Effective Net Worth
Effective Net Worth is the sum of a firm's net worth and its subordinated debt, providing a more comprehensive view of financial health from the perspective of senior creditors.
Effective Tax Rate
The effective tax rate represents the average rate at which an individual or a corporation is taxed on earned income.
Effective Units
Effective Units, a concept closely linked with Equivalent Units, are used in cost accounting to determine the cost per unit in a production process, especially when dealing with incomplete goods. The aim is to assign accurate costs to partially completed items.
Effective Yield
Effective Yield is a measure of the actual return earned on an investment, taking into account the effects of compounding interest.
Efficiency Engineer
An efficiency engineer, formerly known as a management specialist, analyzes and reports on the effectiveness of operations within an organization. The role arose prominently following the principles laid out by Frederick W. Taylor in his book 'The Principles of Scientific Management,' which advocated for scientific measurement to determine optimal management effectiveness.
Efficiency in Accounting
Efficiency in accounting is a measure of how effectively an organization can produce and distribute its product, typically quantified by comparing standard hours allowed for production and actual hours taken.
Efficiency Ratio
An efficiency ratio is a measure used to assess the efficiency of labor or an activity over a period by comparing the standard hours allowed for production to the actual hours taken. This metric, typically expressed as a percentage, helps in evaluating how well resources are utilized within a production process.
Efficiency Variances
Efficiency variances measure the difference between the actual amount of resources used in production and the standard amount that should have been used, focusing particularly on labor and overhead costs.

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.