IDRAC Lyon, 2009-2010

Alexandros Dimitriadis

Financial management Glossary

A absorption costing A method of costing that, in addition to direct costs, assigns all, or a proportion of, production overhead costs to cost units by means of one or a number of overhead absorption rates. accounting The classification and recording of monetary transactions, the presentation and interpretation of the results of those transactions in order to assess performance over a period and the financial position at a given date, and the monetary projection of future activities arising from alternative planned courses of action. accounting adjustments Accounting entries that do not arise from the basic transactions of cash and invoices. Adjusting entries are made for depreciation, bad and doubtful debts, closing stocks, prepayments, and accruals. accounting period The time period covered by the accounting statements of an entity. accounting policies The specific accounting bases selected and consistently followed by an entity as being, in the opinion of the management, appropriate to its circumstances and best suited to present fairly its results and financial position. accounting standard Authoritative statement of how particular types of transaction and other events should be reflected in financial statements. Compliance with accounting standards will normally be necessary for financial statements to give a true and fair view. accounts payable Also called trade creditors, is the money owed to suppliers for goods and services. accounts receivable Also called trade debtors, is the money owed to entities by customers. accruals Allowances made for costs and expenses payable within one year of the balance sheet date but for which no invoices have yet been recorded. accruals concept The principle that revenues and costs are recognised as they are earned or incurred, and so matched with each other, and dealt with in the profit and loss account of the period to which they relate,