Glossary of Terms

A | B | C D | E | F | G | H | I | J | K | L | M | N | O| P | Q | R | S | T | U | V | W | X | Y | Z


A

Terms Definition
Accrual Accounting A system of accounting based on the accrual principal, under which revenue is recognized when earned and expenses are recognized when incurred.
Accruals Accruals are liabilities to pay for goods or services that have been received but have not been invoiced. Record accruals when invoices are received in a different month than the service or good is received or supplied or where a liability to pay goods and services that have not been received or supplied are not yet reflected in the general ledger.

Back to Top

B

Terms Definition
Balance Sheet A financial statement that summarizes a company's assets, liabilities, and Net Assets at a specific point in time.

Back to Top

D

Terms Definition
D-0 D-0 represents the final business day of a given month. (A month end close calendar is being developed.)
D+1 Represents the first working day of the subsequent month. ( D+2 - D+11 represents the second working day, the third working day etc. of the subsequent month). A month end close calendar is being developed.
Deferred Revenue A liability that is created when payment is received by the University for goods and services not yet provided. An example of deferred revenue is student tuition and fees.

Back to Top

E

Terms Definition
Expense Recognition Principles
If goods are received or the services are provided are not paid in the same period (e.g., month), then the University needs to record an entry on its balance sheet. The type of balance sheet entry depends on when the University receives the goods/services relative to when the University pays for them.

Back to Top

I

Terms Definition
Internal Transactions Do not record balance sheet entries for internal transactions. No, accruals or prepaid expense items should be recorded for internal transactions.

Back to Top

M

Terms Definition
Materiality Omission or misstatements of items are material if they could, individually or collectively, influence the economic decisions that users make on the basis of the financial statements. Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances. The size and nature of the item, or a combination of both, could be the determing factor (Source: International Accounting Standard 1.7)

Back to Top

P

Terms Definition
Prepaid Expense
When the University pays a vendor in advance and won’t receive the goods or services until a subsequent period (e.g., month), the University records a prepaid expense until it actually receives the goods or services.
Profit and Lost Statement (P&L) A financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time.

Back to Top

R

Terms Definition
Revenue Recognition Principles

The recognition of revenue during a period involves consideration of two factors - Earned or Realized.

Revenues are considered earned when the University has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. (Source: U.S. GAAP Codification Topic 600:Revenue)

Revenue is considered realized when goods and services, merchandise, or other assets are exchanged for cash or claims to cash. (Source: U.S. GAAP Codification Topic 600:Revenue)

Back to Top