Dictionary of Accounting Terms Barron's Business Guides_8

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Accounting.fm Page 228 Tuesday, February 13, 2007 1:40 PM turnover of labour 228 forecast turnover. 2. the number of times turnround turnround / t nraυnd/ noun 1. the value something is used or sold in a period, usu- of goods sold during a year divided by the ally one year, expressed as a percentage of a average value of goods held in stock 2. the total act of making a company profitable again turnover of labour / t nəυvər əv turnover of labour (NOTE: [all senses] The US term is turna- leibə/ noun same as labour turnover round.) turnover ratio / t nəυvə reiʃiəυ/ noun turnover ratio two-way analysis two-way analysis / tu wei ə n ləsis/ a measure of the number of times a busi- | noun an analysis of business activity that ness’s stock is turned over in a given year, looks at price and quantity in relation to calculated as the cost of sales divided by the materials and labour, and budget and vol- stock’s average book value ume in relation to overheads, but does not turnover tax / t nəυvə t ks/ noun turnover tax same as VAT consider spending and efficiency
Accounting.fm Page 229 Tuesday, February 13, 2007 1:40 PM U UBR abbreviation uniform business rate UBR unbanked unbanked / n b ŋkt/ adjective referring | to a person who does not have a bank UITF abbreviation Urgent Issues Task UITF account Force uncalled / n kɔ ld/ adjective referring to uncalled ultimate holding company / ltimət ultimate holding company | həυldiŋ k mp(ə)ni/ noun the top com- capital which a company is authorised to raise and has been issued but for which pay- pany in a group consisting of several layers ment has not yet been requested of parent companies and subsidiaries umbrella organisation / m brelə umbrella organisation uncashed uncashed / n k ʃt/ adjective having not | | ɔ ənaizeiʃ(ə)n/ noun a large organisation been cashed uncashed cheques which includes several smaller ones uncommitted credit lines / nkəmitid uncommitted credit lines unaccounted for / nə kaυntid fɔ / unaccounted for kredit lainz/ plural noun a borrowing | adjective lost without any explanation arrangement that a bank provides but may Several thousand units are unaccounted for choose to withdraw at any time in the stocktaking. unconsolidated unconsolidated / nkən sɒlideitid/ | unadjusted trial balance / nəd stid unadjusted trial balance adjective not grouped together, as of shares traiəl b ləns/ noun a trial balance that or holdings has not yet been adjusted at a period end for unconsolidated subsidiary unconsolidated subsidiary items such as closing stock / nkənsɒlideitid səb sidiəri/ noun a sub- | unappropriated profits unappropriated profits sidiary that is not included in the consoli- / nəprəυprieitid prɒfits/ plural noun dated financial statements of the group to profits that have neither been distributed to a which it belongs. An unconsolidated subsid- company’s shareholders as dividends nor set iary would appear on a consolidated balance aside as specific reserves sheet as an investment. unappropriated retained earnings unappropriated retained earnings uncontrollable uncontrollable / nkən trəυləb(ə)l/ / nəprəυprieitid ri teind niŋz/ plural | adjective not possible to control uncon- | noun retained earnings no portion of which trollable inflation has been assigned to a special purpose uncontrollable costs uncontrollable costs / nkən unaudited / n ɔ ditid/ adjective having unaudited | | trəυləb(ə)l kɒsts/ plural noun costs not been audited unaudited accounts appearing on a management accounting unaudited statement / n ɔ ditid unaudited statement statement that are regarded as not within the | steitmənt/ noun a financial statement in control of that particular level of manage- which an auditor prepares and presents sta- ment tistics but does not give an audit opinion on uncrossed cheque / nkrɒst tʃek/ uncrossed cheque them noun a cheque which does not have two unauthorised / n ɔ θəraizd/, unauthor- unauthorised | lines across it, and can be cashed anywhere ized adjective not permitted unauthorised (NOTE: They are no longer used in the UK, access to the company’s records unau- but are still found in other countries.) thorised expenditure undated / n deitid/ adjective with no undated unavoidable costs / nəvɔidəb(ə)l unavoidable costs | date indicated or written She tried to cash kɒsts/ plural noun costs that will be an undated cheque. incurred regardless of what business deci- undated bond undated bond / n deitid bɒnd/ noun a sions are taken and that cannot be recovered | bond with no maturity date unbalanced / n b lənst/ adjective refer- unbalanced | under- / ndə/ prefix less important than or under- ring to a budget which does not balance or which is in deficit lower than
Accounting.fm Page 230 Tuesday, February 13, 2007 1:40 PM underabsorbed overhead 230 underabsorbed overhead valuing something, at less than the true underabsorbed overhead / ndərəbzɔ bd əυvəhed/ noun an worth absorbed overhead which ends up by being undervalued / ndə v lju d/ adjective undervalued | lower than the actual overhead incurred not valued highly enough The dollar is underabsorption / ndərəb zɔ pʃ(ə)n/ underabsorption undervalued on the foreign exchanges. | noun a situation where the actual overhead The properties are undervalued on the com- incurred is higher than the absorbed over- pany’s balance sheet. head. Opposite overabsorption ‘…in terms of purchasing power, the dol- undercapitalised / ndə k pitəlaizd/, undercapitalised lar is considerably undervalued, while the | undercapitalized adjective without enough US trade deficit is declining month by month’ [Financial Weekly] capital The company is severely undercap- italised. underwrite / ndə rait/ verb 1. to accept underwrite | undercharge / ndə tʃɑ d / verb to ask undercharge responsibility for something 2. to insure, to | someone for too little money She under- cover a risk to underwrite an insurance charged us by £25. policy 3. to agree to pay for costs The gov- ernment has underwritten the development underemployed capital underemployed capital costs of the project. (NOTE: underwriting – / ndərimplɔid k pit(ə)l/ noun capital underwrote – has underwritten) which is not producing enough interest underlease / ndəli s/ noun a lease from ‘…under the new program, mortgage bro- underlease kers are allowed to underwrite mortgages a tenant to another tenant and get a much higher fee’ [Forbes Maga- underlying inflation rate / ndəlaiiŋ underlying inflation rate zine] in fleiʃ(ə)n reit/ noun the basic inflation | underwriter / ndəraitə/ noun a person underwriter rate calculated on a series of prices of con- or company that underwrites a share issue or sumer items, petrol, gas and electricity, and an insurance interest rates. Compare headline inflation rate underwriting / ndəraitiŋ/ noun the underwriting underspend / ndə spend/ verb to spend action of guaranteeing to purchase shares in underspend | less than you should have spent or were a new issue if no one purchases them allowed to spend underwriting fee / ndəraitiŋ fi / noun underwriting fee understandability / ndə st ndə understandability a fee paid by a company to the underwriters | | biliti/ noun when referring to financial for guaranteeing the purchase of new shares information, the quality of being sufficiently in that company clearly expressed as to be understood by underwriting syndicate / ndəraitiŋ underwriting syndicate anybody with a reasonable knowledge of sindikət/ noun a group of underwriters business who insure a large risk understate / ndə steit/ verb to enter in understate undischarged bankrupt undischarged bankrupt | an account a figure that is lower than the / ndistʃɑ d d b ŋkr pt/ noun a person actual figure The company accounts who has been declared bankrupt and has not understate the real profit. been released from that state undersubscribed / ndəs b skraibd/ undersubscribed undistributable profit undistributable profit | adjective referring to a share issue in which / ndistribju təb(ə)l prɒfit/ noun profit applications are not made for all the shares that is not legally available for distribution to on offer, and part of the issue remains with shareholders as dividends the underwriters undistributable reserves undistributable reserves undertake / ndə teik/ verb to agree to undertake / ndistribju təb(ə)l ri z vz/ plural noun | | do something We asked the research unit same as capital reserves to undertake an investigation of the market. undistributed profit / ndistribju tid undistributed profit They have undertaken not to sell into our prɒfit/ noun profit which has not been dis- territory. (NOTE: undertaking – undertook tributed as dividends to shareholders – undertaken) unearned income / n nd ink m/ unearned income undertaking / ndəteikiŋ/ noun 1. a undertaking noun same as investment income business He is the MD of a large commer- unemployed / nim plɔid/ adjective not unemployed cial undertaking. 2. a promise, especially a | having any paid work legally binding one They have given us a written undertaking not to sell their prod- unemployment / nim plɔimənt/ noun unemployment | ucts in competition with ours. 1. the state of not having any work 2. the undervaluation / ndəv ljυ eiʃ(ə)n/ number of people in a country or region who undervaluation | noun the state of being valued, or the act of are willing to work but cannot find jobs
Accounting.fm Page 231 Tuesday, February 13, 2007 1:40 PM 231 unlimited liability ‘…tax advantages directed toward small unit / ju nit/ noun 1. a single product for unit businesses will help create jobs and reduce sale 2. a single share in a unit trust the unemployment rate’ [Toronto Star] unitary taxation / ju nit(ə)ri t k unitary taxation | unemployment pay / nim plɔimənt unemployment pay seiʃ(ə)n/ noun a method of taxing a corpo- | pei/ noun money given by the government ration based on its worldwide income rather to someone who is unemployed than on its income in the country of the tax unexpired cost / nikspaiəd kɒst/ unexpired cost authority noun the net book value, or depreciated his- unit contribution margin / ju nit unit contribution margin torical cost of an asset, not yet charged to the kɒntri bju ʃ(ə)n mɑ d in/ noun the | profit and loss account profit made on each unit sold unfair competition / nfeə kɒmpə unfair competition unit cost / ju nit kɒst/ noun the cost of unit cost | tiʃ(ə)n/ noun the practice of trying to do one item, i.e. the total product costs divided better than another company by using tech- by the number of units produced niques such as importing foreign goods at unitholder / ju nit həυldə/ noun a per- unitholder very low prices or by wrongly criticising a | son who holds units in a unit trust competitor’s products uniting of interests /ju naitiŋ əv uniting of interests unfavourable variance /n unfavourable variance | | intrəsts/ noun the international accounting feiv(ə)rəb(ə)l veəriəns/ noun same as standards term for merger accounting adverse variance unit level activities / ju nit lev(ə)l k unit level activities unfunded debt / nf ndid det/ noun unfunded debt | tivitiz/ plural noun business activities short-term debt requiring repayment within undertaken each time a unit is produced a year from issuance unit-linked insurance / ju nit liŋkd in unit-linked insurance ungeared / n iəd/ adjective with no bor- ungeared | | ʃυərəns/ noun an insurance policy which is rowings linked to the security of units in a unit trust unguaranteed residual value unguaranteed residual value or fund / n rənti d ri zidjuəl v lju / noun the | unit of account / ju nit əv ə kaυnt/ unit of account residual value of a leased asset that a com- | noun a standard unit used in financial trans- pany is not sure it will ever be in a position actions among members of a group, e.g. to sell SDRs in the IMF uniform accounting policies uniform accounting policies unit price / ju nit prais/ noun the price of unit price / ju nifɔ m ə kaυntiŋ pɒlisiz/ plural noun | one item the use of the same accounting policies for units of production method of units of production method of depreciation all the companies in a group, for the prepa- depreciation / ju nits əv prə d kʃən ration of consolidated financial statements | meθəd əv di pri ʃi eiʃ(ə)n/ noun a uniform business rate / ju nifɔ m uniform business rate | | method of calculating depreciation that biznis reit/ noun a tax levied on business determines the cost of an asset over its use- property which is the same percentage for ful economic life according to the number of the whole country. Abbreviation UBR units it is expected to produce over that (NOTE: The uniform business rate is then period multiplied by the rateable value of the prop- erty to give the total rates to be paid in that unit trust / ju nit tr st/ noun an organi- unit trust year.) sation which takes money from small inves- tors and invests it in stocks and shares for uniformity / ju ni fɔ miti/ noun the prin- uniformity | them under a trust deed, the investment ciple of using common measurements, being in the form of shares (or units) in the accounting standards and methods of pres- trust (NOTE: The US term is mutual fund.) entation across different organisations, to ensure comparability unlawful / n lɔ f(ə)l/ adjective against the unlawful | law, not legal unincorporated / nin kɔ pəreitid/ unincorporated | adjective referring to a business which has unlimited company unlimited company / n limitid | not been made into a company, i.e. which is k mp(ə)ni/ noun a company where the operating as a partnership or a sole trader shareholders have no limit as regards liabil- unissued capital / niʃu d k pit(ə)l/ ity unissued capital noun capital which a company is authorised unlimited liability / n limitid laiə unlimited liability | | to issue but has not issued as shares biliti/ noun a situation where a sole trader unissued stock / niʃu d stɒk/ noun unissued stock or each partner is responsible for all a firm’s capital stock which a company is authorised debts with no limit on the amount each may to issue but has not issued have to pay
Accounting.fm Page 232 Tuesday, February 13, 2007 1:40 PM unliquidated claim 232 money, but has no security from the debtor unliquidated claim unliquidated claim / nlikwideitd for the debt kleim/ noun a claim for unliquidated dam- ages unsecured debt unsecured debt / nsikjυəd det/ noun unliquidated damages unliquidated damages a debt which is not guaranteed by a charge / nlikwideitid d mid iz/ plural noun on assets or by any collateral damages which are not for a fixed amount of unsecured loan unsecured loan / nsikjυəd ləυn/ money but are awarded by a court as a matter noun a loan made with no security of discretion unsubsidised unsubsidised / n s bsidaizd/, unsub- | unlisted company unlisted company / n listid sidized adjective with no subsidy | k mp(ə)ni/ noun a company whose shares unused allowances unused allowances / n ju zd ə are not listed on the Stock Exchange | | laυənsiz/ plural noun part of the married unlisted securities unlisted securities / n listid si couple’s allowance or the blind person’s | | kjυəritiz/ plural noun shares that are not allowance which is not used because the listed on the Stock Exchange recipient does not have enough income, and unpaid unpaid / n peid/ adjective not paid which can then be passed to their spouse | unprofitable unprofitable / n prɒfitəb(ə)l/ adjective up front up front / p fr nt/ adverb in advance | not profitable money up front payment in advance They unquoted company unquoted company / n kwəυtid are asking for £100,000 up front before they | will consider the deal. He had to put k mp(ə)ni/ noun a company whose shares money up front before he could clinch the are not listed on the stock exchange deal. unquoted investments unquoted investments / n kwəυtid | upside potential in vestmənts/ plural noun investments upside potential / psaid pə tenʃəl/ | | which are difficult to value, e.g. shares noun the possibility for a share to increase in which have no stock exchange listing or land value. Opposite downside risk of which the asset value is difficult to esti- upturn upturn / pt n/ noun a movement mate towards higher sales or profits an upturn unquoted shares unquoted shares / nkwəυtid ʃeəz/ in the economy an upturn in the market plural noun shares that have no Stock Urgent Issues Task Force Urgent Issues Task Force / d ənt Exchange quotation iʃu z tɑ sk fɔ s/ noun a committee of the unrealisable gains unrealisable gains / nriəlaizəb(ə)l UK Accounting Standards Board that con- einz/ plural noun apparent increases in the siders major urgent and emerging account- value of assets that could not be turned into ing issues. Its pronouncements are known as realised profit UITF Abstracts. Abbreviation UITF unrealised capital gain unrealised capital gain / nriəlaizd usage method usage method / ju sid meθəd/ noun a k pit(ə)l ein/ noun an investment which method of depreciating a machine, by divid- is showing a profit but has not been sold ing its cost less residual value by the number unrealised loss of units it is expected to produce or the unrealised loss / nriəlaizd lɒs/ noun length of time it is expected to be used same as paper loss useful economic life unrealised profit unrealised profit / n riəlaizd prɒfit/ useful economic life / ju sf(ə)l | i kənɒmik laif/ noun the period during noun same as paper profit which an entity expects to derive economic unredeemed pledge unredeemed pledge / nridi md benefit from using an asset such as a pled / noun a pledge which the borrower machine and over which it can be depreci- has not claimed back because he or she has ated. Also called depreciable life not paid back the loan usury usury / ju əri/ noun the lending of money unregistered unregistered / n red istəd/ adjective | at high interest used for describing a company that has not been registered on the official list of compa- utilisation utilisation / ju tilai zeiʃ(ə)n/, utilization | nies held, in the UK, at Companies House noun the act of making use of something unrestricted income funds unrestricted income funds ‘…control permits the manufacturer to / nristriktid ink m f ndz/ plural noun react to changing conditions on the plant floor and to keep people and machines at a a charity’s funds that are available to its trus- high level of utilization’ [Duns Business tees to use for the purposes set out in the Month] charity’s governing document utilise unsecured creditor unsecured creditor utilise / ju tilaiz/, utilize verb to use / nsikjυəd kreditə/ noun a creditor who is owed something
Accounting.fm Page 233 Tuesday, February 13, 2007 1:40 PM V Value Added Tax / v lju did t ks/ vacant possession Value Added Tax vacant possession / veikənt pə | noun full form of VAT zeʃ(ə)n/ adjective being able to occupy a value-adding cost / v lju diŋ property immediately after buying it value-adding cost kɒst/ noun a business cost that increases because it is empty The property is to be sold with vacant possession. the market value of a product or service value analysis / v lju ə n ləsis/ noun value analysis valuation valuation / v lju eiʃ(ə)n/ noun an esti- | | analysis by a producer of all aspects of a fin- mate of how much something is worth to ished product to determine how it could be ask for a valuation of a property before mak- made at minimum cost Value analysis ing an offer for it showed an excessive amount of rubber was valuation of a business valuation of a business / v ljueiʃ(ə)n used in manufacturing the product. əv ə biznis/ noun the act of estimating the value chain / v lju tʃein/ noun the value chain value of a business. This can be done on var- sequence of activities a company carries out ious bases, such as an assets basis, its break- as it designs, produces, markets, delivers, up value, its value as a going concern, etc. and supports its product or service, each of value value / v lju / noun the amount of money which is thought of as adding value which something is worth the fall in the ‘Competition is no longer limited to the value of sterling She imported goods to realm of the enterprise. Entire value chains the value of £2500. The valuer put the are now starting to act as formidable enti- value of the stock at £25,000. to rise or ties, competing against each other for sim- fall in value to be worth more or less í verb ilar markets.’ [Harvard Business Review] to estimate how much money something is value chain costing / v lju tʃein value chain costing worth He valued the stock at £25,000. kɒstiŋ/ noun a costing model that takes We are having the jewellery valued for into account all aspects of the chain of pro- insurance. duction, from design to after-sales value added value added / v lju did/ noun 1. the value in use / v lju in ju s/ noun the value in use difference between the cost of the materials present value of the estimated future net purchased to produce a product and the final cash flows from an object, including the selling price of the finished product 2. the amount expected from its disposal at the end amount added to the value of a product or of its useful life. Value in use replaces book service, being the difference between its value when an asset suffers impairment. cost and the amount received when it is sold. valuer / v ljυə/ noun a person who esti- valuer Also called net output mates how much money something is worth value-added activity variable annuity / veəriəb(ə)l ə nju əti/ value-added activity / v lju did k variable annuity | | tiviti/ noun business activity that improves noun an annuity based on funds invested in common stock, which varies with the value a product or service at a cost that the cus- of the stock, as opposed to a fixed annuity tomer is willing to pay variable costing / veəriəb(ə)l kɒstiŋ/ variable costing value-added statement value-added statement / v lju did noun a method of recording inventoried steitmənt/ noun a simplified financial costs that records only the variable manufac- statement that shows how much wealth has turing costs, not the fixed costs been created by a company. A value-added variable cost percentage / veəriəb(ə)l variable cost percentage statement calculates total output by adding kɒst pə sentid / noun a ratio arrived at by sales, changes in stock, and other incomes, | dividing total variable costs by total sales then subtracting depreciation, interest, taxa- variable costs / veəriəb(ə)l kɒsts/ plu- tion, dividends, and the amounts paid to sup- variable costs pliers and employees. ral noun production costs which increase
Accounting.fm Page 234 Tuesday, February 13, 2007 1:40 PM variable rate 234 VAT office / v t ɒfis/ noun the govern- with the quantity of the product made, e.g. VAT office wages or raw materials ment office dealing with the collection of VAT in an area variable rate variable rate / veəriəb(ə)l reit/ noun a VAT paid / v t peid/ adjective with the VAT paid rate of interest on a loan which is not fixed, VAT already paid but can change with the current bank interest VAT receivable / v t ri si vəb(ə)l/ VAT receivable rates. Also called floating rate | adjective with the VAT for an item not yet variable rate loan variable rate loan / veəriəb(ə)l reit collected by a taxing authority ləυn/ noun a bank loan carrying an interest VAT registration / v t red istreiʃ(ə)n/ VAT registration rate that varies according to fluctuations in a noun the process of listing a company with particular index a European government as eligible for the variance variance / veəriəns/ noun the discrepancy return of VAT in certain cases between the actual cost of an asset or busi- VC abbreviation venture capitalist VC ness activity and the standard or expected VCT abbreviation venture capital trust VCT cost vending / vendiŋ/ noun selling vending variance accounting variance accounting / veəriəns ə | vendor / vendə/ noun 1. a person who vendor kaυntiŋ/ noun a method of accounting by sells something, especially a property the means of which planned activities (quanti- solicitor acting on behalf of the vendor 2. a fied through budgets and standard costs and person who sells goods revenues) are compared with actual results venture / ventʃə/ noun a commercial deal venture VAT VAT / vi ei ti , v t/ noun a tax on goods which involves a risk They lost money on and services, added as a percentage to the several import ventures. She’s started a invoiced sales price The invoice includes new venture – a computer shop. VAT at 17.5%. The government is propos- venture capital / ventʃə k pit(ə)l/ venture capital ing to increase VAT to 22%. Some items noun capital for investment which may eas- (such as books) are zero-rated for VAT. He ily be lost in risky projects, but can also pro- does not charge VAT because he asks for vide high returns. Also called risk capital payment in cash. Full form Value Added venture capital fund / ventʃə venture capital fund Tax k pit(ə)l f nd/ noun a fund which invests ‘…the directive means that the services of in finance houses providing venture capital stockbrokers and managers of authorized ‘…the Securities and Exchange Board of unit trusts are now exempt from VAT; pre- India allowed new companies to enter the viously they were liable to VAT at the primary market provided venture capital standard rate. Zero-rating for stockbro- funds took up 10 per cent of the equity. At kers’ services is still available as before, present, new companies are allowed to but only where the recipient of the service make initial public offerings provided belongs outside the EC’ [Accountancy] their projects have been appraised by VAT declaration VAT declaration / v t deklə reiʃ(ə)n/ banks or financial institutions which take | noun a statement declaring VAT income to up 10 per cent of the equity’ [The Hindu] the VAT office venture capitalist / ventʃə venture capitalist VAT group VAT group / v t ru p/ noun in the k pit(ə)list/ noun a finance house or pri- United Kingdom, a group of related compa- vate individual specialising in providing nies that is treated as one taxpayer for VAT venture capital. Abbreviation VC purposes ‘…along with the stock market boom of VAT inspection VAT inspection / v t in spekʃ(ə)n/ the 1980s, the venture capitalists piled | more and more funds into the buyout busi- noun a visit by officials of HM Revenue and ness, backing bigger and bigger deals with Customs to see if a company is correctly ever more extravagant financing struc- reporting its VAT tures’ [Guardian] VAT inspector VAT inspector / v t in spektə/ noun a | venture capital trust / ventʃə venture capital trust government official who examines VAT k pit(ə)l tr st/ noun a trust which invests returns and checks that VAT is being paid in smaller firms which need capital to grow. VAT invoice VAT invoice / v t invɔis/ noun an Abbreviation VCT invoice which includes VAT vertical equity / v tik(ə)l ekwiti/ vertical equity VAT invoicing VAT invoicing / v t invɔisiŋ/ noun the noun the principle that people with different sending of an invoice including VAT incomes should pay different rates of tax VATman VATman / v tm n/, vatman noun a VAT vertical form / v tik(ə)l fɔ m/ noun one vertical form inspector (informal ) of the two styles of presenting a balance
Accounting.fm Page 235 Tuesday, February 13, 2007 1:40 PM 235 vouching sheet allowed by the Companies Act. See or revenues compared with budgeted Comment at balance sheet. Also called amounts, caused by differences between the actual and budgeted levels of activity report form vertical integration / v tik(ə)l inti vertical integration voluntary voluntary / vɒlənt(ə)ri/ adjective 1. done | reiʃ(ə)n/ noun same as backward inte- freely without anyone forcing you to act 2. gration done without being paid vested interest / vestid intrəst/ noun a vested interest voluntary arrangement voluntary arrangement / vɒlənt(ə)ri ə | special interest in keeping an existing state reind mənt/ noun same as scheme of of affairs arrangement virement / vaiəmənt/ noun a transfer of virement voluntary liquidation voluntary liquidation / vɒlənt(ə)ri money from one account to another or from likwi deiʃ(ə)n/ noun a situation where a one section of a budget to another | company itself decides it must close and sell visible / vizib(ə)l/ adjective referring to visible its assets real products which are imported or voluntary redundancy voluntary redundancy / vɒlənt(ə)ri ri exported | d ndənsi/ noun a situation where the visible exports / vizib(ə)l ekspɔ ts/ visible exports employee asks to be made redundant, usu- plural noun real products which are ally in return for a large payment exported, as opposed to services voluntary registration visible imports / vizib(ə)l impɔ ts/ voluntary registration / vɒlənt(ə)ri visible imports red i streiʃ(ə)n/ noun in the United King- plural noun real products which are | imported, as opposed to services dom, registration for VAT by a trader whose turnover is below the registration threshold. visible trade / vizib(ə)l treid/ noun visible trade This is usually done in order to reclaim tax trade involving visible imports and exports on inputs. void /vɔid/ adjective not legally valid void voucher volume / vɒlju m/ noun a quantity of voucher / vaυtʃə/ noun 1. a piece of paper volume items which is given instead of money 2. a written document from an auditor to show that the volume discount / vɒlju m diskaυnt/ volume discount accounts are correct or that money has really noun the discount given to a customer who been paid buys a large quantity of goods volume of output / vɒlju m əv aυtpυt/ volume of output vouching vouching / vaυtʃiŋ/ noun the process of noun the number of items produced checking accounting accuracy by matching volume variances / vɒlju m vouchers and other documents with the volume variances veəriənsiz/ plural noun differences in costs details recorded in an account
Accounting.fm Page 236 Tuesday, February 13, 2007 1:40 PM W wage /weid / noun the money paid to an warehouse / weəhaυs/ noun a large wage warehouse employee in return for work done, espe- building where goods are stored cially when it is paid weekly and in cash warehouse capacity / weəhaυs kə warehouse capacity | She is earning a good wage or good wages p siti/ noun the space available in a ware- for a young person. (NOTE: The plural house wages is more usual when referring to the warrant / wɒrənt/ noun 1. an official doc- warrant money earned, but wage is used before ument which allows someone to do some- other nouns.) thing 2. share warrant í verb to guaran- ‘European economies are being held back tee All the spare parts are warranted. by rigid labor markets and wage struc- ‘…the rights issue will grant shareholders tures’ [Duns Business Month] free warrants to subscribe for further new ‘…real wages have been held down dra- shares’ [Financial Times] matically: they have risen at an annual rate warrantee / wɒrən ti / noun a person warrantee of only 1% in the last two years’ [Sunday | who is given a warranty Times] wage adjustments / weid ə warrantor / wɒrən tɔ / noun a person wage adjustments warrantor | | d stmənts/ plural noun changes made to who gives a warranty wages warranty / wɒrənti/ noun 1. a legal docu- warranty wage claim / weid kleim/ noun an act of wage claim ment which promises that a machine will asking for an increase in wages work properly or that an item is of good wage differentials / weid difə wage differentials quality The car is sold with a twelve- | renʃəlz/ plural noun same as pay differen- month warranty. The warranty covers tials spare parts but not labour costs. 2. a prom- wage-earner / weid ise in a contract 3. a statement made by an nə/ noun a per- wage-earner insured person which declares that the facts son who earns a wage stated by him are true wage indexation / weid wage indexation indekseiʃ(ə)n/ noun the linking of wasting asset / weistiŋ sit/ noun an wasting asset increases to the percentage rise in the cost of asset which becomes gradually less valuable living as time goes by, e.g. a short lease on a prop- wage scale / weid skeil/ noun same as erty wage scale pay scale watchdog / wɒtʃdɒ / noun an independ- watchdog wages costs / weid iz kɒsts/ plural wages costs ent person or organisation whose task is to noun the costs of paying employees’ sala- police a particular industry, ensuring that ries. Along with other costs such as pension member companies do not act illegally contributions and salaries, these costs typi- watered stock / wɔ təd stɒk/ noun watered stock cally form the largest single cost item for a shares that are worth less than the total cap- business. ital invested in the company wages payable account / weid iz wages payable account WDA abbreviation 1. writing-down allow- WDA peiəb(ə)l ə kaυnt/ noun an account show- ance 2. written-down allowance | ing gross wages and employer’s National WDV abbreviation written-down value WDV Insurance contributions paid during a period wealth tax / welθ t ks/ noun a tax on wealth tax wages policy / weid iz pɒlisi/ noun a wages policy money, property or investments owned by a government policy on what percentage person increases should be paid to workers wall safe / wɔ l seif/ noun a safe installed wear and tear / weər ən teə/ noun the wear and tear wall safe in a wall deterioration of a tangible fixed asset as a
Accounting.fm Page 237 Tuesday, February 13, 2007 1:40 PM 237 window dressing result of normal use. This is recognised for then sell in smaller quantities to the general accounting purposes by depreciation. public I persuaded him to give us a whole- sale discount. he buys wholesale and web /web/ noun same as World Wide Web web sells retail he buys goods in bulk at a whole- weight /weit/ noun a measurement of how weight sale discount and then sells in small quanti- heavy something is í verb to give an extra ties to the public value to a factor wholesale banking / həυlseil b ŋkiŋ/ wholesale banking weighted average / weitid v(ə)rid / weighted average noun banking services between merchant noun an average which is calculated taking banks and other financial institutions, as several factors into account, giving some opposed to retail banking more value than others wholesale dealer / həυlseil di lə/ noun wholesale dealer weighted average cost / weitid weighted average cost a person who buys in bulk from manufactur- v(ə)rid kɒst/, weighted average price ers and sells to retailers / weitid v(ə)rid prais/ noun the aver- wholesale price / həυlseil prais/ noun wholesale price age price per unit of stock delivered in a the price charged to customers who buy period calculated either at the end of the goods in large quantities in order to resell period (‘periodic weighted average’) or each them in smaller quantities to others time a new delivery is received (‘cumulative wholesale price index / həυlseil prais weighted average’) wholesale price index indeks/ noun an index showing the rises weighted average cost of capital weighted average cost of capital and falls of prices of manufactured goods as / weitid vərid kɒst əv k pit(ə)l/ they leave the factory noun the average cost of a company’s bor- wholesaler / həυlseilə/ noun a person rowing in relation to its total capital wholesaler who buys goods in bulk from manufacturers weighted index / weitid indeks/ noun weighted index and sells them to retailers an index where some important items are wholly-owned subsidiary / həυlli given more value than less important ones wholly-owned subsidiary əυnd səb sidjəri/ noun a subsidiary which weighting / weitiŋ/ noun an additional weighting | belongs completely to the parent company salary or wages paid to compensate for liv- will /wil/ noun a legal document where ing in an expensive part of the country The will salary is £15,000 plus London weighting. someone says what should happen to his or her property when he or she dies He wrote Wheat Report / wi t ri pɔ t/ noun a Wheat Report | his will in 1984. According to her will, all report produced by a committee in 1972 that her property is left to her children. set out to examine the principles and meth- wind up phrasal verb to end a meeting, or to ods of accounting in the United States. Its close down a business or organisation and publication led to the establishment of the sell its assets She wound up the meeting FASB. with a vote of thanks to the committee. white knight / wait nait/ noun a person white knight windfall profit / windfɔ l prɒfit/ noun a windfall profit or company which rescues a firm in finan- sudden profit which is not expected cial difficulties, especially one which saves a firm from being taken over by an unaccept- windfall profits tax / windfɔ l prɒfits windfall profits tax able purchaser t ks/, windfall tax / windfɔ l t ks/ noun White Paper / wait peipə/ noun a report a tax on companies that have made large White Paper profits because of circumstances outside issued by the UK government as a statement their usual trading activities. A windfall tax of government policy on a particular prob- was imposed on the privatised utility com- lem. Compare Green Paper panies in 1997. whole-life cost / həυl laif kɒst/ noun a whole-life cost winding up / waindiŋ p/ noun liquida- winding up cost calculated as life-cycle costs plus any tion, the act of closing a company and sell- after-purchase costs ing its assets whole-life insurance / həυl laif in whole-life insurance | winding up petition / waindiŋ p pə ʃυərəns/, whole-life policy / həυl laif winding up petition | tiʃ(ə)n/ noun an application to a court for pɒlisi/ noun an insurance policy where the an order that a company be put into liquida- insured person pays a fixed premium each tion year and the insurance company pays a sum when he or she dies. Also called whole-of- window dressing / windəυ dresiŋ/ window dressing life assurance noun 1. the practice of putting goods on dis- wholesale / həυlseil/ adjective, adverb play in a shop window, so that they attract wholesale referring to the business of buying goods customers 2. the practice of putting on a dis- from manufacturers and selling them in play to make a business seem better or more large quantities to traders (retailers) who profitable or more efficient than it really is
Accounting.fm Page 238 Tuesday, February 13, 2007 1:40 PM window of opportunity 238 window of opportunity / windəυ əv window of opportunity works works /w ks/ noun a factory There is a ɒpə tju niti/ noun a short period which small engineering works in the same street | allows an action to take place as our office. The steel works is expand- WIP abbreviation work in progress ing. (NOTE: takes a singular or plural verb) WIP withdraw /wið drɔ / verb 1. to take money withdraw works committee works committee / w ks kə miti/, | | out of an account to withdraw money from works council / w ks kaυnsəl/ noun a the bank or from your account You can committee of employees and management withdraw up to £50 from any cash machine which discusses the organisation of work in by using your card. 2. to take back an offer a factory When the employees went on strike, the workstation workstation / w k steiʃ(ə)n/ noun a company withdrew its revised pay offer. | desk, usually with a computer terminal, (NOTE: withdrawing – withdrew) printer, telephone and other office items at withdrawal /wið drɔ əl/ noun the act of withdrawal which an employee in an office works | removing money from an account to give World Bank World Bank / w ld b ŋk/ noun a cen- seven days’ notice of withdrawal With- tral bank, controlled by the United Nations, drawals from bank accounts reached a peak whose funds come from the member states in the week before Christmas. of the UN and which lends money to mem- withholding tax /wið həυldiŋ t ks/ withholding tax | ber states noun US a tax which removes money from World Wide Web World Wide Web / w ld waid web/ interest or dividends before they are paid to noun an information system on the Internet the investor, usually applied to non-resident that allows documents to be linked to one investors another by hypertext links and accommo- with profits / wiθ prɒfits/ adverb used with profits dates websites and makes them accessible. to describe an insurance policy which guar- Also called web antees the policyholder a share in the profits of the fund in which the premiums are worthless worthless / w θləs/ adjective having no invested value The cheque is worthless if it is not work cell / w k sel/ noun a unit of work cell signed. employees, or a set of machines, assigned to write down phrasal verb to note an asset at a particular manufacturing task a lower value than previously written workforce / w kfɔ s/ noun the total workforce down value The car is written down in the number of employees in an organisation, company’s books. closing written-down industry or country value, opening written-down value the written-down value of an asset at the end or working capital / w kiŋ k pit(ə)l/ working capital the beginning of an accounting period noun capital in the form of cash, stocks, and debtors but not creditors, used by a company write off phrasal verb to cancel a debt, or to in its day-to-day operations. Also called cir- remove an asset from the accounts as having culating capital, floating capital, net cur- no value We had to write off £20,000 in rent assets bad debts. working capital turnover / w kiŋ working capital turnover ‘$30 million from usual company borrow- k pit(ə)l t nəυvə/ noun a figure equal ings will either be amortized or written off to sales divided by average working capital in one sum’ [Australian Financial Review] working partner / w kiŋ pɑ tnə/ noun working partner write-down write-down / rait daυn/ noun a reduction a partner who works in a partnership in the value of an asset as entered in the work-in-process / w k in prəυses/ work-in-process books of a business noun inventory units that are only partially write-off write-off / rait ɒf/ noun the total loss or completed at the end of an accounting cancellation of a bad debt, or the removal of period an asset’s value from a company’s accounts work in progress / w k in prəυ res/ work in progress to allow for write-offs in the yearly noun the value of goods being manufactured accounts which are not complete at the end of an write-up write-up / rait p/ noun a deliberate over- accounting period Our current assets are valuation of company assets made up of stock, goodwill and work in progress. Abbreviation WIP (NOTE: The US writing-down allowance writing-down allowance / raitiŋ daυn term is work in process.) ə laυəns/ noun a form of capital allowance | work permit / w k p mit/ noun an giving tax relief to companies acquiring work permit official document which allows someone fixed assets which are written down on a who is not a citizen to work in a country year-by-year basis
Accounting.fm Page 239 Tuesday, February 13, 2007 1:40 PM 239 written resolution written-down allowance written-down value written-down allowance / rit(ə)n daυn written-down value / rit(ə)n daυn v lju / noun same as net book value ə laυəns/ noun an allowance which can be | claimed on capital expenditure by a business written resolution written resolution / rit(ə)n rezə | or self-employed person in the years after lu ʃ(ə)n/ noun a decision to be reached by the purchase was made. In the first year, the postal vote of the members of a UK private first year allowance (FYA) applies. Abbrevi- company equivalent to a resolution at a ation WDA meeting
Accounting.fm Page 240 Tuesday, February 13, 2007 1:40 PM XYZ xa abbreviation ex-all yen /jen/ noun a unit of currency used in xa yen Japan (NOTE: It is usually written as ¥ before XBRL / eks bi ɑ r el/ noun a computer XBRL a figure: ¥2,700 (say two thousand seven language used for financial reporting that hundred yen).) allows companies to exchange or publish yield /ji ld/ noun the money produced as a financial information through the Internet. yield Full form Extensible Business Reporting return on an investment, shown as a percent- age of the money invested Language xd abbreviation ex dividend xd ‘…if you wish to cut your risks you should go for shares with yields higher than aver- xr abbreviation ex-rights xr age’ [Investors Chronicle] year /jiə/ noun a period of twelve months year yield to maturity / ji ld tə mə tʃυəriti/ yield to maturity year end / jiər end/ noun the end of the year end | noun a calculation of the yield on a fixed- financial year, when a company’s accounts interest investment, assuming it is bought at are prepared The accounts department has a certain price and held to maturity started work on the year-end accounts. YTD abbreviation year to date YTD year-end adjustment / jiər end ə year-end adjustment | zero / ziərəυ/ noun nought, the number 0 zero d stmənt/ noun final adjustments to an The code for international calls is zero entry in accounts to ensure complete accu- zero (00). racy in the presentation of a financial state- zero-based budgeting / ziərəυ beist ment zero-based budgeting b d itiŋ/ noun a method of budgeting year-end closing / jiər end kləυziŋ/ year-end closing which requires each cost element to be spe- noun the financial statements issued at the cifically justified, as though the activities to end of a company’s fiscal (tax) year which the budget relates were being under- yearly / jiəli/ adjective happening once a yearly taken for the first time. Without approval, year We make a yearly payment of £1000. the budget allowance is zero. His yearly insurance premium has risen to zero-coupon bond / ziərəυ ku pɒn zero-coupon bond £550. bɒnd/ noun a bond which carries no inter- year of assessment / jiər əv ə year of assessment | est, but which is issued at a discount and so sesmənt/ noun a twelve-month period on provides a capital gain when it is redeemed which income tax is calculated. In the UK it at face value is April 6th to April 5th of the following zero inflation / ziərəυ in fleiʃ(ə)n/ noun zero inflation year. | inflation at 0% year to date / jiə tə deit/ noun the year to date zero-rated / ziərəυ reitid/ adjective zero-rated period between the beginning of a calendar referring to an item which has a VAT rate of or financial year and the present time. A 0% variety of financial information, such as a zero-rating / ziərəυ reitiŋ/ noun the rat- company’s profits, losses or sales, may be zero-rating displayed in this way. Abbreviation YTD ing of a product or service at 0% VAT
Supplement
ACCOUNTING ORGANISATIONS United Kingdom Association of Chartered Certified Accountants (ACCA) 64 Finnieston Square Glasgow United Kingdom G3 8DT T: 00 44 (0)141 582 2000 F: 00 44 (0)141 582 2222 British Accounting Association (BAA) c/o Sheffield University Management School 9 Mappin Street Sheffield S1 4DT T: 00 44 (0)114 222 3462 F: 00 44 (0)114 222 3348 www.shef.ac.uk/~baa/ Chartered Institute of Management Accountants (CIMA) 26 Chapter Street London SW1P 4NP T: 00 44 (0)20 8849 2251 F: 00 44 (0)20 8849 2450 Institute of Chartered Accountants in England and Wales (ICAEW) Chartered Accountants’ Hall PO Box 433 London EC2P 2BJ T: 00 44 (0)20 7920 8100 F: 00 44 (0)20 7920 0547 Institute of Chartered Accountants in Ireland CA House 87/89 Pembroke Hall Dublin 4 T: 00 353 1637 7200 F: 00 353 1668 0842 Institute of Chartered Accountants of Scotland CA House 21 Haymarket Yards Edinburgh EH12 5BH T: 00 44 (0)131 347 0100 F: 00 44 (0)131 347 0105
Institute of Financial Accountants Burford house 44 London Road Sevenoaks Kent TN13 1AS T: 00 44 (0)1732 458080 F: 00 44 (0)1732 455848 www.accountingweb.co.uk/ifa/journal/index.html International American Accounting Association (AAA) 5717 Bessie Drive Sarasota, FL 34233-2399 USA T: 00 1 (941) 921-7747 F: 00 1 (941) 923-4093 www.aaahq.org/index.cfm Association of Chartered Accountants in the United States (ACAUS) 341 Lafayette Street Suite 4246 New York, NY 10012-2417 USA T: 00 1 (212) 334-2078 Australian Accounting Standards Board (AASB) PO Box 204 Collins St West VIC 8007 Australia T: 00 61 (3) 9617 7600 T: 00 61 (3) 9617 7608 www.aasb.com.au/ Institute of Chartered Accountants of New Zealand (ICANZ) Level 2, Cigna House 40 Mercer Street PO Box 11 342 Wellington 6034 New Zealand T: 00 64 4 474 7840 F: 00 64 4 473 6303 National Society of Accountants (NSA) 1010 North Fairfax Street Alexandria, VA 22314 USA T: 00 1 703 549 6400 F: 00 1 703 549 2984
Specimen Co Ltd Profit and Loss Account for the Year to 31 December 2007 £000 £000 * Turnover 9,758 * Cost of sales 6,840 * Gross profit 2,918 * Distribution costs 585 * Administrative expenses 407 992 1,926 * Other operating income 322 2,248 * Income from shares in group companies 200 * Income from other fixed asset investments 75 * Other interest receivable and similar income 36 311 2,559 * Amounts written off investments 27 * Interest payable and similar charges 26 53 Profit on ordinary activities before taxation 2,506 * Tax on profit on ordinary activities 916 * Profit on ordinary activities after taxation 1,590 * Extraordinary income 153 * Extraordinary charges 44 * Extraordinary profit 109 * Tax on extraordinary profit 45 64 * Profit for the financial year 1,654 Transfers to Reserves 400 Dividends Paid and Proposed 750 1,150 Retained profit for the financial year 504
About the Profit and Loss Account While two vertical and horizontal formats are permissible, most UK companies use the vertical format illustrated. The horizontal profit and loss account format may be summarised as follows: £ £ Cost of sales X Sales X Gross profit X X X Expenses X Gross profit X X X In Germany and Italy only the vertical format is allowed. According to the UK Companies Act a company must show all the items marked with * on the face of the profit and loss account. It must also disclose the value of certain items in the notes to the profit and loss account, such as: a) interest owed on bank and other loans b) rental income c) costs of hire of plant and machinery d) amounts paid to auditors e) turnover for each class of business and country in which sales are made f) number of employees and costs of employment
Specimen Co Ltd Balance Sheet for the Year to 31 December 2007 £000 £000 £000 * FIXED ASSETS * Intangible assets Development costs 1,255 Goodwill 850 2,105 * Tangible assets Land and buildings 4,758 Plant and machinery 2,833 Fixtures and fittings 1,575 9,166 * Investments 730 12,001 * CURRENT ASSETS * Stocks 975 * Debtors 2,888 * Cash at bank 994 4,857 * CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Bank loans 76 Trade creditors 3,297 Accruals 20 3,393 * NET CURRENT ASSETS 1,464 * TOTAL ASSETS LESS CURRENT LIABILITIES 13,465 * CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR Debenture loans 1,875 Finance leases 866 Bank and other loans 124 2,865 * PROVISIONS FOR LIABILITIES AND CHARGES Taxation including deferred taxation 33 Other provisions 557 590 10,010 * CAPITAL AND RESERVES * Called-up share capital 5,000 " Share premium account 500 " Revaluation reserve 1,158 • Other reserves 262 6,920 • PROFIT AND LOSS ACCOUNT 3,090 10.010
About the Balance Sheet While vertical and horizontal balance sheets are permissible, most UK companies prefer the vertical format as illustrated. The conventional form of horizontal balance sheet can be summarised as follows: £ £ Capital brought forward X Fixed Assets X Profit for the year X Capital at year end X X Long term liabilities X Current liabilities X Current Assets X X X In Germany and Italy only the horizontal format is allowed. The UK Companies Act requires companies to show all the items marked with * in the example on the face of the balance sheet; the other items can be shown either on the balance sheet or in the notes to the accounts. In addition, the law requires companies to show the value of certain items in separate notes to the balance sheet, such as details of fixed assets purchased and sold during the year. The notes to the published accounts almost always begin with a description of the accounting policies used by the company in the accounts, e.g. the depreciation policy. In the UK most accounts are prepared on a historical cost basis but this is not compulsory and other bases, such as current cost or historical cost modified by revaluation of certain assets, are also allowed.