Accounting Terminology
Date of Record: The date selected by a corporation's board of directors on which the shareholders of record are identified as those who will receive dividends.

Debentures (unsecured bonds): Bonds for which no collateral has been pledged.

Debit: An entry on the left side of an account. Debits increase assets and decrease liabilities and equity.

Debit Memo: Billing a customer again. Example: A customer purchases an item using a check but the check is returned.

Debt-Equity Management Ratio: A measurement of the relative utilization of debt and equity; computed by dividing average total assets by average stockholders' equity.

Debt Financing: Acquiring funds by borrowing money from creditors in the form of long-term notes, mortgages, leases, or bonds.

Debt Securities: Financial instruments issued by a company that carry with them a promise of interest payments and the repayment of principal.

Declaration Date: The date on which a corporation's board of directors formally decides to pay a dividend to shareholders.

Declining-Balance Depreciation Method: An accelerated depreciation method in which an asset's book value is multiplied by a constant depreciation rate (such as double the straight-line percentage, in the case of double-declining-balance.)

Deduction: Business expenses or losses that are subtracted from gross income in computing taxable income.

Deferred Income Taxes: An account used to record the difference between income tax expense on the income statement and income taxes payable for the year to federal and state governments.

Depletion: The process of cost allocation that assigns the original cost of a natural resource to the periods benefited.

Depreciation: The process of cost allocation that assigns the original cost of plant and equipment to the periods benefited.

Direct Method: A method of reporting net cash flow from operations that shows the major classes of cash receipts and payments for a period of time.

Direct Write-Off Method: The recording of actual losses from uncollectable accounts as expenses during the period in which accounts receivable are determined to be uncollectable.

Disbursements: Represents the amount of checks issued and electronic fund transfers, cash or other payments

Disclaimer of Opinion: A disclaimer indicating the auditor was unable to satisfy himself or herself that the overall financial statements were fairly present in accordance with GAAP.

Discount: The amount charged by a financial institution when a note receivable is discounted; calculated as maturity value times discount rate times discount period.

Discounting a Note Receivable: The process of the payee's selling notes to financial institution for less than the maturity value.

Discount Period: The time between the date a note is sold to a financial institution and its maturity date.

Discount Rate: The interest rate charged by a financial institution for buying a note receivable.

Diversified Companies: Companies operating in more than one line of business.

Dividend Payment Date: The date on which a corporation pays dividends to its shareholders.

Dividend Payout Ratio: A measure of the percentage of earnings paid out in dividends; computed by dividing cash dividends by the net income available to each class of stock.

Dividends: Distributions to owners (stockholders) of a corporation.

Dividends Account: The account used to reflect periodic distributions of earnings to the owners (stockholders) of a corporation.

Dividends in Arrears: Missed dividends for past years that preferred stockholders have a right to receive under the cumulative-dividend preference if and when dividends are declared.

Double-Entry Accounting: A system of recording transactions in a way that maintains the equality of the accounting equation. Debits must always equal credits.

Drawings: Distribution to the owner(s) of a proprietorship or partnership; similar to dividends for a corporation.

Drawing Account: The account used to reflect periodic withdrawals of earnings by the owner (proprietor) or owners (partners) of a proprietorship or partnership.

Due Date: The date on which a debt or obligation is payable. The date on which the check to the creditor must be prepared