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Accounting Definitions > Q-R Accounting Definitions > Flashcards

Q-R Accounting Definitions Flashcards

1
Q

<p>Qualitative Factors</p>

A

<p>Factors that are relevant to a decision but which cannot be expressed numerically. (IMA)</p>

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2
Q

<p>Quality</p>

A

<p>The extent to which a product or service conforms to specifications or provides customers the characteristics that were promised. (IMA)</p>

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3
Q

<p>Quality Assurance</p>

A

<p>The function responsible for providing assurance that products or services are consistently maintained at a high level of quality. (IMA)</p>

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4
Q

<p>Quality Control</p>

A

<p>A process, such as statistical sampling, that monitors the quality of operations. (IMA)</p>

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5
Q

<p>Quantitative</p>

A

<p>A numerical assessment that is based on the quantity of something. Because this is a numerical measure it is much more objective than a qualitative measure. (HOCK)</p>

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6
Q

<p>Quantitative Factors</p>

A

<p>Factors that are relevant to a decision but which can be expressed numerically. (HOCK)</p>

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7
Q

<p>Quantity Discount</p>

A

<p>An allowance given by a seller to a buyer because of the size of an individual purchase transaction or the total size during a specified period. (IMA)</p>

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8
Q

<p>Question Marks</p>

A

<p>One of the classifications of products by the Boston Consulting Group. A question mark is a product in an industry with a high market growth rate, but the product has a low share of the market. Because the market is growing rapidly, the question mark's sales are also growing rapidly, so it will consume a lot of cash for investment. However, because of its low market share, it does not generate much cash. (HOCK)</p>

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9
Q

<p>Quick Ratio</p>

A

<p>A ratio that measures an entity's ability to pay off short-term obligations using the most liquid current assets (excluding inventory). (Also called Acid-Test Ratio.) (IMA)</p>

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10
Q

<p>Quotas</p>

A

<p>Limits on the amount of a good produced, imported into the country, exported, or offered for sale. (IMA)</p>

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11
Q

<p>Random Variable</p>

A

<p>A quantity, resulting from measurement of a random process, that varies, but whose statistical distribution can be determined. (IMA)</p>

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12
Q

<p>Rate of Return</p>

A

<p>A measure of the cash flows from an investment compared to the amount of the investment. (IMA)</p>

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13
Q

<p>Ratio Analysis</p>

A

<p>The calculation of significant financial and other ratios and the comparison of these ratios with those of prior years, industry averages, or standards. (IMA)</p>

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14
Q

<p>Real Dollar</p>

A

<p>The inflation-adjusted time series data, with the effects of inflation removed. (HOCK)</p>

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15
Q

<p>Real Option</p>

A

<p>An alternativeor choice that becomes availablewith a business investment opportunity. For example, by investing in a particular project, acompany may have the real option ofexpanding, downsizing,or abandoningotherprojects in the future. A value can be calculated using option pricing models. (IMA)</p>

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16
Q

<p>Real Required Rate-Of-Return</p>

A

<p>The rate-of-return that is required to cover the risk inherent in an investment assuming no inflation. (HOCK)</p>

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17
Q

<p>Realize</p>

A

<p>Converting non-cash resources and rights into money, used in accounting and financial reporting to refer to sales of assets for cash or claims to cash. (IMA)</p>

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18
Q

<p>Reasonableness Checks</p>

A

<p>A control that compares input with other information in existing records and historical information to detect data that is not reasonable. (HOCK)</p>

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19
Q

<p>Receivable</p>

A

<p>An amount owed to an entity, whether or not it is currently due. (IMA)</p>

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20
Q

<p>Reciprocal Allocation Method</p>

A

<p>A method for allocating service department costs by including the mutual services rendered among all departments. (IMA)</p>

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21
Q

<p>Recognition</p>

A

<p>The process of formally recording an item in an entity's financial statements. (IMA)</p>

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22
Q

<p>Reconciliation</p>

A

<p>A schedule or calculation showing how one amount is derived from another amount. (IMA)</p>

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23
Q

<p>Recording</p>

A

<p>One of the four duties that needs to be segregated, this is the recording of a transaction or event. (HOCK)</p>

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24
Q

<p>Recourse</p>

A

<p>The rights of a lender if a borrower does not repay as promised. (IMA)</p>

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25
Q

<p>Redeemable Preferred Shares</p>

A

<p>Preferred shares that can be redeemed (sold back to the company) at the option of the shareholder. (HOCK)</p>

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26
Q

<p>Reducing (Mitigating) The Risk</p>

A

<p>One of the four responses to risk, reducing the risk recognizes that the risk will continue to exist, but looks to reduce the risk to a level acceptable to the company. (HOCK)</p>

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27
Q

<p>Reengineering</p>

A

<p>A technique used to make improvements within an organization, focusing on identifying and abandoning outdated rules and fundamental assumptions.The end result is a new work method to achieve organizational goals within production, support, or decision-making processes.</p>

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28
Q

<p>Regression Analysis</p>

A

<p>A statistical analysis tool that quantifies the relationship between a dependent variable and one or more independent variables. (IMA)</p>

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29
Q

<p>Regression Equation</p>

A

<p>A statistical technique used to explain or predict the behavior of a dependent variable, taking the form of Y = a + bx + c, where Y is the dependent variable that the equation tries to predict, x is the independent variable that is being used to predict Y, a is the Y-intercept of the line, and c is a value called the regression residual. (IMA)</p>

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30
Q

<p>Reinvestment Rate</p>

A

<p>The rate of return at which cash flows from an investment are expected to be reinvested. (IMA)</p>

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31
Q

<p>Reinvestment Rate Risk</p>

A

<p>The risk that invested money cannot be reinvested into in another investment that will provide the same, or a higher, level of return. This impacts short-term bonds more than long-term bonds. (HOCK)</p>

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32
Q

<p>Relative Sales Value Method</p>

A

<p>A method used to allocate joint costs in proportion to the sales value of joint products produced. (IMA)</p>

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33
Q

<p>Relevance</p>

A

<p>The capacity of information to make a difference in a decision by helping users to form predictions about the outcomes of past, present, and future events or to confirm or correct prior expectations. (IMA)</p>

34
Q

<p>Relevant Cost</p>

A

<p>A cost that should be considered in choosing among alternatives. Only those costs yet to be incurred (future costs) that differ among the alternatives (differential costs) are relevant in decision making. (IMA)</p>

35
Q

<p>Relevant Range</p>

A

<p>The range of economic activity within which estimates and predictions are valid. (IMA)</p>

36
Q

<p>Reliability</p>

A

<p>The quality of information that assures that information is reasonably free from error and bias and faithfully represents what it purports to represent. (IMA)</p>

37
Q

<p>Remeasurement</p>

A

<p>The process of converting foreign currency financial statements from the reporting currency into the functional currency. This step is not necessary if the foreign financial statements are kept in the functional currency. (HOCK)</p>

38
Q

<p>Reorder Point</p>

A

<p>The quantity level of an inventory item that triggers an order to replenish the item. (IMA)</p>

39
Q

<p>Reorganization</p>

A

<p>1. A financial restructuring of an organization, such as bankruptcy. 2. A restructuring of a firm's operations in order to focus on core activities and outsource others. (IMA)</p>

40
Q

<p>Repair</p>

A

<p>The activity of putting assets back into normal or expected operating condition without an increase in the asset's previously estimated service life. (IMA)</p>

41
Q

<p>Reporting Currency</p>

A

<p>The currency in which an entity prepares its financial statements. (IMA)</p>

42
Q

<p>Repurchase Agreement</p>

A

<p>A contract in which the seller of securities, such as Treasury Bills, agrees to buy them back at a specified time and price. (Also called Repo or Buyback.) (IMA)</p>

43
Q

<p>Required Rate of Return</p>

A

<p>The minimum acceptable rate of return on an investment. (Also called Hurdle Rate.) (IMA)</p>

44
Q

<p>Required Reserves</p>

A

<p>The minimum amount of funds that a bank is required by law to keep on hand in order to back-up its deposits. (IMA)</p>

45
Q

<p>Research and Development Cost</p>

A

<p>Outlays made in an attempt to discover new knowledge (research) or to use the results of research to develop new or improved products or processes (development). (IMA)</p>

46
Q

<p>Reserve</p>

A

<p>A term used primarily to segregate part of retained earnings, such as for a reserve for contingencies. (IMA)</p>

47
Q

<p>Reserve Allowance</p>

A

<p>In the sale of receivables, the reserve allowance is an amount of cash that is withheld at the original sale in order to protect the purchaser against uncollected receivables. (HOCK)</p>

48
Q

<p>Residual Dividend Policy</p>

A

<p>A dividend policy in which a dividend will be paid only if the funds are not needed for investment. This is considered a passive dividend policy. (HOCK)</p>

49
Q

<p>Residual Income</p>

A

<p>A means of measuring performance of an investment center that stresses profit responsibility and the financial management efficiency of the investment center manager. Residual income is typically calculated as the difference between investment center profits and a charge for capital resources committed to the unit. (IMA)</p>

50
Q

<p>Residual Risk</p>

A

<p>The risk remaining after controls have been put in place to mitigate the inherent risk; or, the exposure to loss after all known risks have been mitigated. (IMA)</p>

51
Q

<p>Resource Allocation</p>

A

<p>A plan for using available resources, for example human resources, especially in the near term, to achieve goals for the future; the allocation of resources among the various projects or business units. (IMA)</p>

52
Q

<p>Resource Driver</p>

A

<p>A measure of the quantity of resources consumed by an activity (e.g., floor space occupied by the activity). (IMA)</p>

53
Q

<p>Responsibility</p>

A

<p>A system of accounting that assigns revenues, costs, and/or capital to units of an enterprise (responsibility centers). (IMA)</p>

54
Q

<p>Responsibility Budget</p>

A

<p>A budget that sets forth approved plans structured in terms of the units responsible for carrying them out. It is a control device in that it is a statement of performance expected of each responsibility center manager against which actual performance can be compared. (IMA)</p>

55
Q

<p>Responsibility Center</p>

A

<p>An organizational unit headed by a manager who is responsible for its activities. (IMA)</p>

56
Q

<p>Responsibility Centers</p>

A

<p>An organizational unit for which a manager is assigned responsibility for the unit's performance. (HOCK)</p>

57
Q

<p>Restatement</p>

A

<p>The process of converting financial statements that have not been prepared under US GAAP into US GAAP. Usually this is done for the purposes of a consolidation. (HOCK)</p>

58
Q

<p>Restrictive Covenants</p>

A

<p>Clauses in a debt agreement that limit the actions that a company may take that may be detrimental to the bondholders. These covenants may be related to various ratios that must be maintained, working capital amounts or even dividend payments. (HOCK)</p>

59
Q

<p>Restructuring</p>

A

<p>A significant modification made to the debt, operations, or structure of a company. (IMA)</p>

60
Q

<p>Retained Earnings</p>

A

<p>Net income over the life of a corporation less dividends. (IMA)</p>

61
Q

<p>Retained Risk</p>

A

<p>The portion of a risk not covered by insurance, such as a deductible amount that must be paid before any losses are reimbursed. A retained risk may also be a risk the firm chooses to self-insure against. (HOCK)</p>

62
Q

<p>Return</p>

A

<p>The change in the value of an investment over an evaluation period, including any cash flows received pertaining to the investment during that period. (IMA)</p>

63
Q

<p>Return on Assets (ROA)</p>

A

<p>A measure of how effective an entity is at earning a return on the assets employed in its business. (IMA)</p>

64
Q

<p>Return on Common Equity</p>

A

<p>A measure that indicates the rate of return on the shareholders' investment. (Also called return on owners' equity.) (IMA)</p>

65
Q

<p>Return on Invested Capital</p>

A

<p>A measure of how effectively a company uses the money (debt or equity) invested in its operations. (IMA)</p>

66
Q

<p>Return on Investment (ROI)</p>

A

<p>The ratio of income earned on the investment to the investment made to earn that income. (IMA)</p>

67
Q

<p>Revenue</p>

A

<p>Inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations. (IMA)</p>

68
Q

<p>Revenue Center</p>

A

<p>A responsibility center in which management control is focused on the revenue that the center earns. (IMA)</p>

69
Q

<p>Revenue Recognition</p>

A

<p>An accounting principle undergenerally accepted accounting principles (GAAP)that determines the specific conditionsunder which revenue is recorded in the financial statements. (IMA)</p>

70
Q

<p>Reverse Stock Split</p>

A

<p>The same process as a stock split except that instead of increasing the number of shares and reducing the value of the shares, a reverse stock split reduces the number of shares outstanding, but increases the value of each share. (HOCK)</p>

71
Q

<p>Rework</p>

A

<p>When spoiled goods are fixed and prepared for sale, this is called rework. (HOCK)</p>

72
Q

<p>Rights</p>

A

<p>An offer made by a company to its shareholders to enable them to buy new shares in the company at a discount from the market price. (IMA)</p>

73
Q

<p>Risk</p>

A

<p>A measure of the variability of the return on investment</p>

74
Q

<p>Risk Analytics</p>

A

<p>The process of defining and analyzing the dangers to firms posed by potential natural and human-caused adverse events; quantitative risk analysis estimates the probabilities of adverse events and the likely extent of the losses; qualitative risk analysis defines the threats, determines the extent of vulnerabilities, and devises countermeasures should an adverse event occur. (IMA)</p>

75
Q

<p>Risk Assessment</p>

A

<p>1. In capital budgeting, methods used to identify, and quantify the relative risk of a project. 2. In auditing, a systematic process for exercising and integrating professional judgments about potential adverse conditions and events. (IMA)</p>

76
Q

<p>Risk Premium</p>

A

<p>The return in excess of the risk-free rate of return that an investment is expected to yield; a form of compensation for investors who take on the extra risk. (IMA)</p>

77
Q

<p>Risk Response</p>

A

<p>Steps taken to deal with variance types of risk; four different strategies: avoidance, mitigation, acceptance, or transference. (Also called Risk Treatment.) (IMA)</p>

78
Q

<p>Risk Transfer</p>

A

<p>Shifting risk from one party to another (e.g., insurance). (IMA)</p>

79
Q

<p>Risk-Adjusted Return</p>

A

<p>In capital budgeting, a rate of return that is adjusted for the expected risk of the proposed project. The net present value of a project whose risk is expected to be greater than average is found by using a higher than average discount rate. (Also called Risk-Adjusted Discount Rate.) (IMA)</p>

80
Q

<p>Risk-Free Rate</p>

A

<p>The rate of return an investor could receive on an investment in a riskless asset. This is approximated by the return on very short-term U.S. Treasury bills. (HOCK)</p>

81
Q

<p>Rolling Budget</p>

A

<p>A moving projection of financial operations for a series of weeks, months, or quarters immediately ahead. At the end of each period, the portion of the projection then lapsed is removed and a new projection for a period of similar length is added to the series. (Also called Continuous Budget.) (IMA)</p>

82
Q
A

Accounting Definitions (15 decks)

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