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FINANCIAL DICTIONARY & GLOSSARY: A - AC

above the line - normal business expenses and revenues that come above the net income or net profit in a profit and loss account or income statement.

absolute advantage - the ability to produce a particular good more cheaply than other countries.

absorption costing - see full costing.

accelerated depreciation - subtracting a high proportion of the cost of capital investments from taxable profit during the first years of use.

accelerator or acceleration principle - changes in the demand for consumer goods cause even greater changes in the demand for capital goods.

accepting houses - banks that buy (for a commission or fee) export merchants' short-term bills of exchange, expecting the debtor to pay up at the right time.

account - a statement of money paid or owed; an arrangement with a firm that allows credit for payments.

accountability - the state of being responsible to someone for some actions (company directors are accountable to the company's shareholders).

accountancy - the profession or business of an accountant.

accountant - person who keeps and checks an organization's or an individual's financial records.

account day or settlement day - the day on which all deals made during the previous 14-day account or accounting period on the stock exchange must be settled.

accounting - keeping financial records (recording income and expenditure, and profits and losses, valuing assets and liabilities, etc.)

accounting-entity assumption - see separate-entity principle.

accounting-period assumption - see time-period principle.

accounting equation - the fundamental identity of the balance sheet: Assets = Liabilities + Owners' Equity.

accounting principles - a dozen or so concepts, conventions or doctrines generally observed in accounting.

accounting standards - a country's exact rules concerning valuation, measurement and disclosure.

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