Efficient Market
The Efficient Market Hypothesis (EMH) is a financial theory suggesting that asset prices reflect all available information, making it nearly impossible to consistently achieve higher returns than average market returns.
Efficient Markets Hypothesis
The Efficient Markets Hypothesis (EMH) posits that at any given time, asset prices in financial markets reflect all available information. This theory suggests that it is impossible for investors to either consistently make above-average returns or predict future market movements based on information that is already publicly available.
Efficient Portfolio
An Efficient Portfolio of investments represents a combination that maximizes the expected return for a given level of risk or minimizes the level of risk for a given expected return.
EFRAG
EFRAG is an acronym for the European Financial Reporting Advisory Group, an organization dedicated to the development and objectives of financial reporting standards in the European Union.
EFTPOS: Electronic Funds Transfer at Point of Sale
EFTPOS is an abbreviation for Electronic Funds Transfer at Point of Sale, referring to a payment system that allows customers to make payments using electronic methods directly at the place of purchase.
Egress
Egress refers to the right or legal ability to exit or leave a property or premises. It is a common term in real estate and property law, often used in conjunction with 'ingress,' which refers to the right to enter a property.
Eighth Company Law Directive
The Eighth Company Law Directive (1984) focused on the role and regulation of auditors within the European Union. Incorporated into UK law through the Companies Act 1989, it was superseded by the Statutory Audit Directive in 2006.
EITF (Emerging Issues Task Force)
The Emerging Issues Task Force (EITF) was formed by the Financial Accounting Standards Board (FASB) with the purpose of providing assistance in identifying and implementing reporting issues in new and developing financial practices.
Ejectment
Ejectment is a legal action to regain possession of real property from someone who is unlawfully occupying it. It is not applicable in cases where the possession is pursuant to a lease. Ejectment actions are typically used by property owners or those with a superior claim to the title to remove occupants or trespassers who do not have the right to remain on the property.
Elastic Demand (Supply)
Elastic demand (supply) refers to the sensitivity of the quantity demanded (supplied) of a good or service to changes in its price. It is a measure of how consumer or producer behavior changes with price fluctuations.
Elasticity of Supply and Demand
Elasticity of supply and demand measures the responsiveness of quantity supplied or demanded to changes in price. These metrics are fundamental in understanding market dynamics and predicting how various factors influence the market.
Elect
In legal and business contexts, 'elect' means to choose or decide upon a course of action. This may involve selecting options within contracts, wills, business decision-making, or procedural steps in various transactions.
Election to Waive Exemption (Option to Tax)
The election to waive exemption, also known as the option to tax, refers to the choice by a taxpayer to charge VAT on supplies that are otherwise exempt. This mechanism allows businesses to reclaim input VAT, which can benefit their cash flow and overall financial performance.
Elective Resolution
An elective resolution was a unanimous decision by all members of a private limited company to dispense with certain provisions of the Companies Act 1985, such as holding an annual general meeting. This requirement was abolished by the Companies Act 2006.
Electronic Banking
Electronic banking, also known as e-banking, is a method of banking in which customers conduct transactions through electronic means, typically via the internet. This system allows for a range of financial activities, such as transferring money, paying bills, checking account balances, and more, without the need to visit a physical bank branch.
Electronic Billing (E-Billing)
Electronic Billing (E-Billing) refers to the modernized process of sending invoices and accepting payments for goods and services via the Internet. It consists of biller-direct payments and bank-aggregator payments, enhancing efficiency and reducing paper usage.
Electronic Bulletin Board
An electronic bulletin board is a computer system that enables users to read, post, and exchange messages, functioning as a digital version of a traditional bulletin board.
Electronic Business (E-Business)
Electronic Business (E-Business) encompasses any business processes enabled by or conducted over the Internet and other digital networks, utilizing Internet technology at the core of its business operations.
Electronic Commerce (E-Commerce)
Electronic commerce, commonly known as e-commerce, involves the buying and selling of goods and services over the internet. It encompasses various types of transactions, digital systems, and business models that operate online.
Electronic Communication Network (ECN)
An Electronic Communication Network (ECN) is a digital system that connects major stock brokerages and individual traders so that they can trade directly without needing to go through a middleman.
Electronic Communications Privacy Act (ECPA)
U.S. law enacted in 1986 that prohibits unlawful access and certain disclosures in various forms of wire and electronic communications. The law also prevents government entities from requiring disclosure of electronic communications from a provider without proper procedure.
Electronic Computer-Originated Mail (E-COM)
E-COM was a specialized service by the U.S. Postal System that facilitated the delivery of computer-generated messages as first-class mail, combining electronic transmission and physical delivery.
Electronic Data Gathering, Analysis, and Retrieval system (EDGAR)
EDGAR is an automated system employed by the U.S. Securities and Exchange Commission (SEC) for the collection, validation, indexing, acceptance, and forwarding of submissions required by law to be filed by companies and other entities.
Electronic Data Interchange (EDI)
Electronic Data Interchange (EDI) is a system of transferring standardized data between business entities in a structured, machine-readable format.
Electronic Data Interchange (EDI)
Electronic Data Interchange (EDI) is the process of transferring data between and within companies electronically, utilizing standardized formats to enhance efficiency and accuracy.
Electronic Data Interchange (EDI)
Electronic Data Interchange (EDI) refers to the use of electronic data-transmission networks to move information from one computer system to another, typically without human intervention. This technology is widely used for automating orders, invoices, and payments between suppliers, customers, and banks, among other applications.
Electronic Filing (E-Filing)
Electronic Filing, commonly referred to as E-Filing, is a system allowing taxpayers to transmit their tax returns directly to the Internal Revenue Service (IRS) electronically. This streamlines the tax submission process, reduces the chance of errors, and accelerates the refund process.
Electronic Funds Transfer (EFT)
Electronic Funds Transfer (EFT) involves the transfer of money from one bank account to another through electronic means, leveraging computers and communication links. It encompasses various seamless financial services, including home banking and point-of-sale systems.
Electronic Funds Transfer at Point of Sale (EFTPOS)
EFTPOS is the automatic debiting of a purchase price from a customer's bank or credit-card account through a computer link between the checkout till and the bank or credit-card company, often involving chip-and-PIN systems for secure transactions.
Electronic Funds Transfer System (EFTS)
An Electronic Funds Transfer System (EFTS) is any electronic transmission system that moves funds from one institution to another as opposed to the physical exchange of some other medium such as paper checks.
Electronic Mail (E-Mail)
Electronic mail, commonly known as e-mail, refers to a system that enables an individual to send messages from one computer or terminal to another over a network, most frequently the Internet. The message is stored until the recipient retrieves and acts upon it.
Electronic Mail (Email)
Electronic Mail or Email is a software application that enables the exchange of messages, including letters, memos, and documents, between individuals or groups via computers. It has evolved to support multimedia mail, combining text, graphics, voice, and other multimedia formats in a single message.
Electronic Return Originator (ERO)
An Electronic Return Originator (ERO) is a tax professional or entity authorized by the IRS to prepare and file tax returns electronically on behalf of taxpayers.
Electronic Return Originator (ERO)
An Electronic Return Originator (ERO) is an individual or company authorized by the IRS to submit tax returns electronically.
Electronic Signature
An electronic signature is a method for sending identity verification through the Internet, usually in connection with a contract or other type of agreement. The method involves some type of security measure, such as use of a Personal Identification Number (PIN), to indicate the approval of the individual agreeing to the transaction.
Electronic Trading
Electronic trading refers to the process of buying and selling financial instruments, such as stocks and options, through electronic platforms via the Internet. This modern method of trading allows customers to place orders online through brokers, often at lower commission rates compared to traditional or discount brokers.
Electronic Transmitter Identification Number (ETIN)
A unique number assigned by the IRS to providers of electronically filed tax returns, identifying them as authorized e-file originators, transmitters, software developers, or reporting agents.
Electronic Transmitter Identification Number (ETIN)
The Electronic Transmitter Identification Number (ETIN) is a unique identifier assigned by the IRS to authorized electronic return originators (EROs) transmitting e-filed tax returns.
Electronic Typewriter
An electronic typewriter is an advanced version of the traditional typewriter that features electrical components to enhance the typing experience, typically including memory storage, spell-check, and sometimes a small display screen.
Elements of Cost
Understanding the elements of cost is fundamental for businesses to ensure efficient production and optimal pricing strategies. The three primary cost elements in a production process include material, labor, and expenses.
Elevator Liability Insurance
Elevator liability insurance provides coverage when a liability suit is brought against an insured for bodily injury incurred by a plaintiff as the result of using an elevator on the insured's premises.
Eligibility Requirements
Conditions required to be covered by employee benefit plans such as pensions, under which minimum requirements, such as a certain number of years of service, must be met by an employee to qualify for benefits.
Eligible Paper
Detailed examination of eligible paper, including Treasury bills, short-dated gilts, acceptances by banks, and their role in maintaining liquidity and influencing financial institutions' portfolios.
Emancipation
Emancipation is the legal process by which a minor is granted the freedom to assume certain legal responsibilities normally associated only with adults. This status is typically granted by a court.
Embargo
An embargo is a government-imposed prohibition against the shipment of certain goods to another country. While most common during wartime, embargoes can also be applied for economic or political reasons.
Embedded Audit Facility
An embedded audit facility is a computer-assisted audit technique that integrates audit programs and additional data into a client's computerized accounting system to enable continuous auditing.
Embedded Object
An embedded object is created with one application and embedded into a file created by another application, retaining its original format and allowing for editing within the application it is embedded in.
Embezzlement
Embezzlement is the fraudulent appropriation, for one's own use, of property lawfully in one's possession. It is a type of larceny often associated with bank employees, public officials, or officers of organizations, who in the course of their lawful activities, come into possession of property, such as money, actually owned by others.
Emblement
Emblements refer to crops grown by a tenant that are regarded as personal property, even if the tenancy has expired before the harvest or in the event of the tenant's death.
Emergency Economic Stabilization Act (EESA) of 2008
Legislation designed to assist large financial institutions to prevent failure and to signal to worldwide financial markets that the United States government would stand behind major American banks and other important financial entities to prevent disruptive collapses.
Emergency Tax Code
An income tax code issued by tax authorities when the correct tax code for an employee is unavailable, ensuring basic personal allowance application but excluding further allowances until proper code assignment.
Emerging Issues Task Force (EITF)
Emerging Issues Task Force (EITF) is responsible for assisting the Financial Accounting Standards Board (FASB) by suggesting appropriate treatments for emerging accounting issues and practices to accelerate standard-setting processes.
Emerging Market
An emerging market refers to a foreign economy that is developing due to the spread of capitalism and has created its own stock market. These markets are analogous to small growth companies, possessing high potential coupled with high risk.
Eminent Domain
Eminent Domain is the inherent right of the state to take private property for public use without the property owner's consent, typically requiring that just compensation be paid to the property owner.
Emolument
An emolument refers to the income or compensation received from employment, office, or labor, including salary, fees, and other forms of compensation.
Emoluments
Amounts received from an office or employment including all salaries, fees, wages, perquisites, and other profits as well as certain expenses and benefits paid or provided by the employer, which are deemed to be emoluments. They are subject to income tax.
Emphasis of Matter
An ‘Emphasis of Matter’ paragraph was an optional part in an auditor's report, used to draw attention to important matters in financial statements without modifying the overall audit opinion. The practice was revised by the Auditing Practices Board in 1993.
Employee
An employee is an individual who works for compensation, either direct or indirect, for an employer in return for stipulated services. Employees may be compensated hourly, daily, or annually. Employers have the right to control the work performed by their employees, including timing and means of accomplishing tasks.
Employee Assistance Program (EAP)
Programs implemented by organizations to assist employees dealing with personal problems, including substance abuse, through comprehensive support tailored to individual needs.
Employee Association
A professional organization of employees that focuses on fostering professional growth, networking, and advocacy without engaging in union-like activities.
Employee Benefits
Employee benefits, often referred to as fringe benefits, are non-wage compensations provided to employees in addition to their normal salaries or wages. These benefits are key components of comprehensive compensation packages, aimed at attracting, motivating, and retaining employees.
Employee Contributions
Employee contributions refer to the workers' premiums or payments toward a contributory employee benefit plan. These contributions are often made to plans such as health insurance, retirement funds, and other employer-sponsored benefits.
Employee Empowerment
Employee empowerment refers to the practice of giving employees more responsibility and autonomy in decision-making processes within an organization. This approach can lead to improved decision-making, as well as enhanced training, motivation, and productivity among employees.
Employee Profit Sharing
An outline of an employee benefit plan where employees are entitled to a portion of the profits of their company, receiving bonuses when the company is profitable.
Employee Report
An employee report is a simplified version of the statutory annual report and accounts of a company, designed specifically for its employees. Although voluntary, this practice should comply with provisions of the Companies Act relating to non-statutory accounts.
Employee Retirement Income Security Act (ERISA)
The Employee Retirement Income Security Act (ERISA) of 1974 governs most private pension and benefit plans, easing pension eligibility rules, establishing the Pension Benefit Guaranty Corporation (PBGC), and setting guidelines for managing pension funds.
Employee Retirement Income Security Act (ERISA)
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.
Employee Share Ownership Plan (ESOP)
An Employee Share Ownership Plan (ESOP) is a program that provides a company's employees with shares in the company. The ESOP purchases these shares with the assistance of the sponsoring company, and shares are allocated to employees who meet specific performance criteria.
Employee Share Ownership Trust (ESOT)
An Employee Share Ownership Trust (ESOT) is a trust set up by a UK company to acquire and distribute company shares to its employees, benefiting both the employees and the company through tax-deductible payments.
Employee Share Ownership Trust (ESOT)
An ESOT, or Employee Share Ownership Trust, is a type of employee benefit plan designed to provide employees with an ownership interest in the company.
Employee Stock Option
An employee stock option (ESO) provides employees the opportunity to purchase stock in the company they work for, typically at a price below market value. The two main categories for tax purposes are statutory (incentive stock options) and nonstatutory options.
Employee Stock Ownership Plan (ESOP)
An Employee Stock Ownership Plan (ESOP) is a program that encourages employees to purchase stock in their company, thus allowing them to participate in the management of the company. Companies with such plans may take tax deductions for ESOP dividends passed on to participating employees and for dividends that go to repay stock acquisition loans.
Employee Stock Ownership Plan (ESOP)
An Employee Stock Ownership Plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company. Through ESOPs, companies provide their employees with stock ownership, often at no upfront cost to the employees. ESOPs are used by a broad variety of publicly traded and closely held companies.
Employer
An employer is an individual or organization that hires and pays workers, providing them with wages and a livelihood. The employer holds authority to direct the work and has the ability to hire or dismiss employees, furnish working locations and necessary supplies, and handle tax obligations.
Employer Identification Number (EIN)
An Employer Identification Number (EIN) is a unique Taxpayer Identification Number (TIN) assigned to entities other than individuals, such as partnerships, corporations, estates, and trusts. The EIN is used for the purpose of identifying businesses and certain other entities for tax reporting.
Employer Interference
Employer interference refers to a broad category of unfair labor practices whereby employers unlawfully influence, coerce, or restrain employees in exercising their rights to join, assist, or refrain from labor organizations. Governed by Section 8(a) of the National Labor Relations Act (NLRA), these practices seek to ensure fair and free participation in labor activities.
Employer Retirement Plan
An employer retirement plan is a retirement plan set up by an employer for the benefit of the employees. It encompasses various types of plans including pension, profit-sharing, 401(k), union plans, and others specifically outlined by tax laws.
Employer's Liability Acts
Statutes specifying the extent to which employers shall be liable to make compensation for injuries sustained by their employees in the course of employment.
Employers Liability Coverage
Employers Liability Coverage, also known as Coverage B, is a component of Workers' Compensation insurance that provides coverage for employers against claims not covered by standard workers' compensation policies.
Employers’ Contingent Lien Against Assets Liability
A contingent claim, or lien, placed by the Pension Benefit Guaranty Corporation (PBGC) against an employer's assets upon the termination of a pension plan to cover the amount of an employee's unfunded benefits.
Employment Agency
An employment agency is a public or private organization that provides services for individuals seeking employment and for potential employers seeking employees.
Employment At Will
Employment at will is a legal doctrine that gives employers the right to hire, fire, suspend, or discipline employees at their discretion, as long as these actions do not violate any laws or contracts.
Employment Contract
A formal agreement between employer and employee, stating the terms of employment in an organization. Employers are bound by Federal Affirmation Action laws not to discriminate.
Employment Cost Index (ECI)
The Employment Cost Index (ECI) is a quarterly report issued by the U.S. Department of Labor that tracks changes in employer payroll costs including salaries, wages, benefits, and bonuses. It serves as a significant indicator for understanding trends in employment costs and potential inflation.
Employment Costs
Employment costs refer to the total expenditure incurred by an organization in employing personnel. This includes salaries, wages, bonuses, incentive payments, employer's National Insurance contributions, and employer's pension scheme contributions.
Employment Tax
Employment tax refers to the taxes that employers must pay based on the wages they pay to their employees. These taxes include federal income tax withholding, Social Security and Medicare taxes (FICA), federal unemployment tax (FUTA) and, for self-employed individuals, self-employment tax.
Employment Test
An examination given by businesses to prospective employees to aid in the selection process. Examples include written tests of technical abilities, performance exams, and psychological evaluations.
Emporium
An emporium originally referred to a marketplace serving more than one merchant. Today, it is generally used to describe a large store containing a wide variety of merchandise.
Empowerment
Empowerment is a form of participative management where employees share management responsibilities, including decision making. It encourages employees to take initiative and make decisions within their areas of responsibility.
Empty Nesters
Empty nesters are couples whose children have left the family household. This demographic forms an important segment of the housing market due to their tendency to downsize their living spaces. As a result, they drive demand for smaller housing units.
Enabling Clause
An enabling clause is a provision in most new laws or statutes that gives appropriate officials the power to implement and enforce the law.
Encoding
Encoding refers to the process of converting information or a message into a specific format or code, often to ensure confidentiality, efficient transmission, or storage.
Encroach
Encroachment is the act of gradually intruding upon the rights or property of another, which includes any infringement on the property or authority of others.
Encroachment
Encroachment refers to a building, part of a building, or obstruction that physically intrudes upon, overlaps, or trespasses upon the property of another; typically verified by a survey.
Encryption
Encryption is the encoding of electronic data so that it can be transmitted without interception. With the growing use of the Internet for commercial purposes, there has been an ongoing need for secure encryption methods, notably in the transmission of credit card details.
Encumbrance
An encumbrance is any right to, interest in, or legal liability upon real property that doesn't prohibit passing title to the land but diminishes its value. Encumbrances include easements, licenses, leases, timber privileges, homestead privileges, mortgages, and judgment liens.
End of Month (EOM)
End of Month (EOM) refers to a specific point in time that typically marks the conclusion of a financial or accounting period. At the EOM, businesses finalize their accounts by reconciling all transactions, completing tasks like issuing invoices, and addressing outstanding receivables and closing inventory.
End User
An end user is the individual or group who will ultimately utilize a product, contrasting with those who develop, market, or sell the product.

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.