transaction entered in the accounting records of a business. It can be an external transaction-that is, one with an outsider, such as recording a sale. It can also refer to an internal transaction such as making an adjusting entry (e.g., expense or revenue accrual).
reporting methods, measurement systems, and disclosures used by a specific company. The accountant should evaluate the appropriateness of accounting policies employed by management. A description of the company's accounting policies should be presented in a separate section preceding the footnotes to the financial statements or as the first footnote. Disclosure of accounting policies should include accounting principles and methods of application that involve: (1) a selection from generally accepted alternatives; (2) those peculiar to the industry or field of endeavor; and (3) unusual or different applications of Generally Accepted Accounting Principles (GAAP) . Examples of disclosures are basis of consolidation , depreciation methods, and inventory pricing. , Disclosure of accounting policies assists financial readers in better
A required annual filing in a state, usually requiring names of the directors (for corporations), members (for LLCs) and financial information. This term can also refer to an annual statement of business and affairs furnished by a corporation to its shareholders
Also called the statement of financial condition, it is a summary of the assets, liabilities, and owners' equity.
outlay charged to a long-term asset account. A capital expenditure either adds a fixed asset unit or increases the value of an existing fixed asset. An example is a new motor for a truck.
An accounting method under which income is subject to tax when actually received and deductions are allowed when actually paid.
Certain characteristics are generally attributed to churches. These attributes of a church have been developed by the IRS and by court decisions. They include: distinct legal existence; recognized creed and form of worship; definite and distinct church government; formal code of doctrine and discipline; distinct religious history; membership not associated with any other church or denomination; organization of ordained ministers; ordained ministers selected after completing prescribed courses of study; literature of its own; established places of worship; regular congregations; regular religious services; Sunday schools for the religious instruction of the young; schools for the preparation of its ministers.
The IRS generally uses a combination of these characteristics, together with other facts and circumstances, to determine whether an organization is considered a church for federal tax purposes.
The IRS makes no attempt to evaluate the content of whatever doctrine a particular organization claims is religious, provided the particular beliefs of the organization are truly and sincerely held by those professing them and the practices and rites associated with the organizationís belief or creed are not illegal or contrary to clearly defined public policy.
Delayed Effective Date
Certain states allow for a business to choose an effective date for when the business will officially be formed as a corporation or LLC in that state. For instance, a business owner submitting a formation order in November of 2004 can choose an effective date of January 1, 2005, when his company will be officially recognized as a corporation or LLC in that state.
The ownership of a shareholder in a corporation.
Fair market price
Amount at which an asset would change hands between two parties, both having knowledge of the relevant facts. Also referred to as market price.
A discipline concerned with determining value and making decisions. The finance function allocates resources, which includes acquiring, investing, and managing resources.
A corporation that owns a large number of shares in other companies. Holding companies use the voting rights that come with their shares to exert influence over the companies under them.
The person or entity that prepares, files and signs the articles of incorporation.
bill prepared by a seller of goods or services and submitted to the buyer. The invoice describes such items as date, customer, vendor, quantities, prices, freight, and credit terms of a transaction.
customer order for a specific number of specially designed, made-to-order products.
joining together of two or more business entities or persons in order to undertake a specific business venture. A joint venture is not a continuing relationship such as a partnership but may be treated as a partnership for income tax purposes.
termination or forfeiture of an item-for example, when coverage under an insurance contract expires because of nonrenewal.
A binder usually containing essential items for the routine maintenance and administration of a limited liability company. LLC kits include membership certificates, an LLC seal and sample operating agreements.
A device made to either emboss or imprint certain company information onto documents. This information usually includes the company's name and date and state of formation. LLC seals may be required when opening bank accounts, distributing membership certificates or conducting other company business.
An LLC may be operated by a group of managers who act much like a board of directors. If an LLC is to Controlled by managers this fact must be stated in the articles of organization.
The term minister is not used by all faiths. The term minister denotes members of clergy of all religions and denominations and includes priests, rabbis, imams, and similar members of the clergy
The name of a corporation or LLC must be distinguishable on the records of the state government. If the name is not unique, the state will reject the articles of incorporation or articles of organization (for LLCs). A name can be reserved, usually for 120 days, by applying with the proper state authorities and paying a fee.
The directors appoint officers. They manage the daily affairs of the corporation. A corporation's officers usually consist of a president, vice-president, treasurer, and secretary. In most states, one person can hold all of these posts.
Paid in Capital
A few states require corporations to have a specified amount of paid in capital prior to starting business. Broadly defined it is all the money and other property belonging to a corporation.
The minimum attendance required to conduct business at a shareholder or board of directors meeting. Usually, a quorum is achieved if a majority of directors are present (for directors meetings) or outstanding shares are represented (for shareholder meetings).
The agent named in the articles of incorporation. The agent will receive service of process on the corporation and other important documents. The agent must be named in the articles of incorporation, and must be located in the state of incorporation or organization.
The par value of shares multiplied by the number of shares outstanding.
Stock Transfer Book
A record book, also called a stock transfer ledger, which lists the owners of shares of stock in a corporation.
Shares of stock which were issued and later acquired or bought back by the corporation.
A company that purchases shares of a corporation and arranges for sale of the shares to the general public.