D
| Term | Meaning |
|---|---|
| Date of Auditors’/Accountants’ Report | Last day the auditors perform fieldwork and the last day of responsibility relating to significant events subsequent to the financial statement date. |
| DDB | Method of accelerated depreciation, approved by the Internal Revenue Service (IRS), permitting twice the rate of annual depreciation as the straight-line depreciation method. |
| Dealer | Individual or firm acting as a principal in a securities transaction. |
| Death benefit | Amounts received under a life insurance contract and paid by reason of the death of the insured. |
| Debenture | General debt obligation backed only by the integrity of the borrower and documented by an agreement called an indenture. |
| Debenture stock | Stock issued under a contract providing for fixed payments at scheduled intervals and more like preferred stock than a debenture, since their status in liquidation is equity and not debt. |
| Debit | Entry on the left side of a double-entry bookkeeping system that represents the addition of an asset or expense or the reduction to a liability or revenue. |
| Debit balance | Balance remaining after one or a series of bookkeeping entries. This amount represents an asset or an expense of the entity. |
| Debt | General name for money, notes, bonds, goods, or services which represent amounts owed. |
| Debt instrument | Written promise to repay a debt. |
| Debt retirement | Repayment of debt. |
| Debt security | Document that is evidence of an obligation or liability. |
| Debt service fund | Fund whose principal or interest is set aside and accumulated to retire debt. |
| Debtor | Party owing money or other assets to a creditor. |
| Debt-to-Equity Ratio | A way of measuring the relationship of debt financing to equity financing, or the extent to which a company is leveraged. |
| Decedent | Individual who has died. |
| Declare | Authorize the payment of a dividend on a specified date, an act of the board of directors of a corporation. |
| Declining-balance method | An accelerated method of depreciating a tangible long-lived asset by applying a fixed rate based on some multiple of the straight-line depreciation rate to its carrying value. |
| Defalcation | To misuse or embezzle funds. |
| Default | Failure to meet any financial obligation. Default triggers a creditor’s rights and remedies identified in the agreement and under the law. |
| Defeasance | Annulment of a contract or deed; a clause within a contract or deed that provides for annulment. |
| Deferral | The postponement of the date that an expense already paid or incurred, or of a revenue already received, is entered in the ledger. |
| Deferred charge | Income received but not earned until all events have occurred. Deferred income is reflected as a liability. |
| Deferred income taxes | Assets or liabilities that arise from timing or measurement differences between tax and accounting principles. |
| Deferred interest bond | Bond that pays interest at a later date. |
| Deferred payment annuity | Annuity whose contract provides that payments to the annuitant be postponed until a number of periods have elapsed. |
| Deficiency in Design | This exists when a control necessary to meet the control objective is missing or an existing control is not properly designed so that even if the control operates as designed, the control objective is not always met. |
| Deficiency in Operation | This exists when a properly designed control does not operate as designed, or when the person performing the control does not possess the necessary authority or qualifications to perform the control effectively. |
| Deficit | Financial shortage that occurs when liabilities exceed assets. |
| Deflation | Decline in the prices of goods and services. |
| Demand loan | Loan repayable on demand, also known as a call loan. |
| Dependent care expenses | Qualified child care expenses that allow a taxpayer to compute a credit against tax. |
| Depletion | Method of computing a deduction to account for a reduction in the value of extractable natural resources. |
| Deposit method | Expense allowance made for wear and tear on an asset over its estimated useful life. |
| Depreciation | Expense allowance made for wear and tear on an asset over its estimated useful life. |
| Derivatives | Financial instruments whose value varies with the value of an underlying asset or index, such as interest rates. |
| Detailed income statement | A complete and explicit statement of an economic entity’s financial activities and holdings. |
| Detection risk | Risk that the auditor will not detect a material misstatement. |
| Detective controls | These have the objective of detecting errors or fraud that have already occurred that could result in a misstatement of the financial statements. |
| Direct labor costs | The labor cost is for specific work that can be easily and economically traced to an end product. |
| Direct material | A material that will become part of a finished product and can be easily and economically traced to specific product units. |
| Direct overhead | Portion of overhead costs allocated to manufacturing by the application of a standard factor termed a burden rate or overhead application rate. |
| Disbursement | Payment by cash or check. |
| Disclaimer of Opinion | Statement by an auditor indicating inability to express an opinion on the fairness of the financial statements provided and the reason for the inability. The auditor is required to disclaim depending on the limitation in scope. |
| Disclosure | Process of divulging accounting information so that the content of financial statements is understood. |
| Discontinued operations | Portion of a business that is planned to be or is discontinued. |
| Discount | Reduction from the full amount of a price or debt. |
| Discount bond | Bond selling below its redemption value. |
| Discount rate | Rate at which interest is deducted in advance of the issuance, purchasing, selling, or lending of a financial instrument. Also, the rate used to determine the current value or present value of an asset or income stream. |
| Discount yield | Yield on a security sold at a discount. |
| Discounted cash flow | Present value of future cash estimated to be generated. |
| Discretionary trust | Arrangement in which the trustee has the authority to make investment decisions and has control over investments within the framework of the trust instrument. |
| Disposable income | Personal income remaining after personal taxes and non-commercial government fees have been paid. |
| Dissolution | Termination of a corporation. |
| Distribution expense | Expense of selling, advertising, and delivery of goods and services. |
| Distributions | Payment by a business entity to its owners of items such as cash assets, stocks, or earnings. |
| Dividend payout ratio | Percentage of earnings paid to shareholders in cash. |
| Dividends | Distribution of earnings to owners of a corporation in cash, other assets of the corporation, or the corporation’s capital stock. |
| Dividends in Arrears | Dividends on cumulative preferred stock that remain unpaid in the year they are due. |
| Dividends payable | A liability for payment of a company’s earnings to its shareholders. |
| Dividends yield | Used to measure the current return to an investor in a stock. |
| Documentation completion date | A complete and final set of audit documentation should be assembled for retention as of a date not more than 45 days after the report release date. |
| Double taxation | The act of taxing corporate earnings twice, once as the net income of the corporation and once as the dividends distributed to stockholders. |
| Double-declining-balance depreciation method (DDB) | Method of accelerated depreciation, approved by the Internal Revenue Service (IRS), permitting twice the rate of annual depreciation as the straight-line depreciation method. |
| Double-entry bookkeeping | Method of recording financial transactions in which each transaction is entered in two or more accounts and involves two-way, self-balancing posting. Total debits must equal total credits. |
| Draft | Signed, written order by which one party (drawer) instructs another party (drawee) to pay a specified sum to a third party (payee). |
| Dual dating | Dating of the accountant’s or auditor’s report when a subsequent event disclosed in the financial statements occurs after completion of the fieldwork but before issuance of the report. For example, “January 3, 19xx, except for note x, as to which the date is March 10, 19xx.” |
| Due date | Each governing agency and its forms scheduled reporting and most importantly payments have a required due date. It is this date that if most files timely may result in a penalty, fine, and commence interest charges. |
| Due diligence | (1) Procedures performed by underwriters in connection with the issuance of a Securities Exchange Commission (SEC) registration statement. These procedures involve questions concerning the company and its business, products, competitive position, recent financial and other developments and prospects. Also performed by others in connection with acquisitions and other transactions. (2) Requirement found in ethical codes that the person governed by the ethical rules exercise professional care in conducting his or her activities. |
| Dutch auction | Auction system in which the price of an item is gradually lowered until it meets a responsive bid and is sold. |