Accounting Definitions

By Kevin

If you're reading this, you're probably looking for accounting definitions. I suggest this single-page, no-advertisement website for easy to understand explanations. Before you go there, I suggest you take a look around my weblog, Truck and Barter; you might find our economic analysis fun and addictive...

A lot of the economic literature I read has economists carping about how accounting definitions are not the same as economic definitions. Usually, economists want accounting definitions to shift towards their own usages, not realizing that many accounting definitions are hard enough as it is to keep straight.

At SynergyFest, Melissa Hershberger is doing a fine job in her new series on accounting definitions.

It all started after a productive lunch meeting:

some very bright colleagues and we were exchanging stories about businesses that thought all was well and then one day woke up and realized they couldn't pay the bills.... Hardworking individuals that had dreams and good ideas (and employed people) and managed their way straight into the ground because they didn't REALLY understand the difference between: Free Cash Flow, EBITDA, Depreciation, Profit and Net Profit.
I took accounting in college (from a Wall Street analyst who lectures on the side), and hated it. I even sold the textbooks after the class was over.

Lesson: Have accountants and business managers--not economists--teach you accounting.

-- May 13, 2004 11:55 AM |

Comments

Kevin Brancato wrote:

You can find a link to a nice set of accounting definitions here.

-- May 28, 2004 2:53 PM ∞

Greg wrote:

In a financial recapitalization what is/are "TIDES Exchanges". Is there a resource that explains their use and application?

-- June 4, 2004 1:22 PM ∞

Kevin Brancato wrote:

I know that TIDES are convertible preferred securities, but I know of no specific internet resource that discusses them

-- June 9, 2004 11:54 AM ∞

Suzanne McKenzie wrote:

For TIDES, try schwab.com

-- June 29, 2004 1:16 PM ∞

Joe Varga wrote:

I need a clear difinition on a Full- Burden Cost. Any help is appreciated, thanks.

-- April 7, 2005 7:30 PM ∞

Sachin Kainth wrote:

Could someone email me at sachin.kainth@atkinsglobal.com with the definition of ASP (Accounting System Project)? Thanks

-- November 30, 2005 6:13 AM ∞

Vincent wrote:

Please explain the following comment related to "Work in process inventory"

" The cost reported on work in process inventory, will appropriately be an estimate of the percentage of total costs to finish the suits in propotion to the percentage of comnpletion of those unfinished units.

-- July 4, 2006 9:25 PM ∞

Jim Reilly wrote:

In accounting classes they taught us that Credit Memos / Refunds on product sales were expenses since only expenses could counteract revenues. The other day, one of my "bosses" insisted on a value for "percentage of net revenue creditted" and the more I try to wrap my mind around it, the more my head hurts. Is there such a term or has this been cobbled together by corporadoes who weren't paying attention in Accounting 101?

-- August 13, 2007 5:44 PM ∞

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