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