Tracking Financial Performance Standards of ... - Sa-Dhan

Glossary of Financial TermsTermCurrent LiabilitiesCurrent RatioCurrent ValueDebitDebit BalanceDebtDebt ServiceDebtorDecentralized BranchAccountingDeclining-BalanceDepreciation MethodDefaultDefinitionDebts that are due for payment within one year. Examples are accounts payable,salaries payable, sales tax payable, and the current portion of notes payable.Obligations a company has to others, such as creditors, suppliers, & taxauthorities, payable within one year. Listed in the liabilities category on thestatement of financial position. Obligation whose liquidation is expected torequire the use of existing resources classified as current assets, or the creationof other current liabilities. A liability that will be due within a short time(usually one year or less) and that is to be paid out of current assets.Current assets divided by current liabilities -- a measure of liquidity. Generally,the higher the ratio, the greater the "cushion" between current obligationsand a firm's ability to meet them. The ratio obtained by dividing currentassets by current liabilities. It is an indicator of a firm's ability to pay its shorttermdebts as they become due. The ratio of current assets to current liabilities.(1) Value of an asset at the present time as compared with the asset's HistoricalCost. (2) In finance, the amount determined by discounting the future revenuestream of an asset using compound interest principles.Entry on the left side of a double-entry bookkeeping system that representsthe addition of an Asset or expense or the reduction to a Liability or Revenue.(See Credit.) To debit (Dr.) an account means to enter an amount on the left,or debit, side of the account.Balance remaining after one or a series of bookkeeping entries. This amountrepresents an Asset or an expense of the entity. (See Balance.) Occurs whenthe amount(s) on the debit side of an account is greater than the amount(s) onthe credit side.An amount owed for funds borrowed. The debt may be owed to anorganization's own reserves, individuals, banks, or other institutions. Generally,the debt is secured by a note, bond, mortgage, or other instrument that statesrepayment and interest provisions. The note, in turn, may be secured by a lienagainst property or other assets. General name for money, notes, bonds, goodsor services which represent amounts owed.Amount of payment due regularly to meet a debt agreement; usually a monthly,quarterly or annual obligation.Party owing money or other Assets to a Creditor.A system of accounting for branches in which each branch keeps its ownrecords and prepares its own financial statements.A method of depreciation that provides declining periodic depreciation chargesto expense over the estimated life of a asset.A failure to discharge a duty. The term is most often used to describe theoccurrence of an event that cuts short the rights or remedies of one of theparties to an agreement or legal dispute, for example, the failure of themortgagor to pay a mortgage installment, or to comply with mortgagecovenants. Failure to meet any financial obligation. Default triggers a creditor'srights and remedies identified in the agreement and under the law.121