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NEED INSTANT ONLINE FINANCIAL ANALYSIS? VENTURELINE IS THE WORLDWIDE LEADER FOR SEC TRACEABLE COMPANY & INDUSTRY ANALYSES ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARYOVER 3,200 ACCOUNTING TERMS 
The Web's Most Complete Accounting Dictionary-Accounting Glossary of Accounting Terms Download the Accounting Dictionary-Accounting Glossary of Accounting Terms
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GAAP is Generally Accepted Accounting Principles or Generally Accepted Accounting Procedures (less common). See GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. G&A usually refers to the indirect overhead costs contained within the General and Administrative expense / cost categories (see also SG&A). GAI is Guaranteed Annual Income. GAIN is: a. the amount by which the revenue of a business exceeds its cost of operating; b. rise in rate or price; c. earn on some commercial or business transaction; d. earn as salary or wages. GAO is the investigative arm of the United States Congress charged with examining matters relating to the receipt and payment of public funds. GARBAGE IN, GARBAGE OUT (GIGO) is an often used computer and software industry saying meaning that if the data going into a system is suspect, the resulting data output will be suspect. GARNISH is to take a debtor's wages under a legal order, e.g. for child support or an IRS tax liability. GASB stands for Government Accounting Standards Board. The GASB is a nonprofit organization responsible for establishing and improving accounting and financial reporting standards for governmental units. GASB 34 is Government Accounting Standards Board Statement 34. GASB 34 provides the broadest changes in government accounting practices since the inception of Generally Accepted Accounting Practice (GAAP) for governmental agencies dating back to the 1930s. The principal change that GASB 34 requires of government entities is the reporting of the value of capital assets on Consolidated Annual Financial Reports (CAFR). GATT (GENERAL AGREEMENT ON TARIFFS AND TRADE) is a multilateral treaty that aims to reduce trade barriers and increase trade. The GATT was an interim treaty process that has now culminated in the World Trade Organization (WTO). GBP is United Kingdom Pound Sterling (Currency Code). GDP see GROSS DOMESTIC PRODUCT. GEARING is the proportion of the capital employed of a company that is financed by lenders rather than shareholders. GEARING RATIO measures the percentage of capital employed that is financed by debt and long term financing. The higher the gearing, the higher the dependence on borrowing and long term financing. Whereas, the lower the gearing ratio, the higher the dependence on equity financing. Traditionally, the higher the level of gearing, the higher the level of financial risk due to the increased volatility of profits. Financial manager face a difficult dilemma. Most businesses require long term debt in order to finance growth, as equity financing is rarely sufficient, on the other hand, the introduction of debt and gearing increases financial risk. A high gearing ratio is positive; a large amount of debt will give higher return on capital employed but the company dependent on equity financing alone is unable to sustain growth. Gearing can be quite high for small businesses trying to become established, but in general they should not be higher than 50%. Shareholders benefit from gearing to the extent that return on the borrowed money exceeds the interest cost so that the market value of their shares rise. GENERAL ACCOUNTING involves the basic principles, concepts and accounting practice, recording, financial statement preparation, and the use of accounting information in management. GENERAL EXPENSE is expense not directly connected with any single department. GENERAL JOURNAL is the most basic of journals. It is a chronological list of transactions. It has a very specific format for recording each transaction. Each transaction is recorded separately and consists of: 1.) a date; 2.) any and all accounts to receive a debit entry are listed first with an amount in the appropriate column, then; 3.) any and all accounts to receive a credit entry are indented and listed next with an amount in the appropriate column; 4.) a clear description of the transaction. At least one line is then skipped to visually separate recorded transactions. GENERAL LEDGER see LEDGER. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) is a recognized common set of accounting principles, standards, and procedures. GAAP is a combination of accepted methods of doing accounting and policy board set authoritative standards. GENERALLY ACCEPTED AUDITING STANDARDS (GAAS), in the US, are the broad rules and guidelines set down by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA). In carrying out work for a client, a certified public accountant would apply the generally accepted accounting principles (GAAP); if they fail to do so, they can be held to be in violation of the AICPA's code of professional ethics. GENERAL LEDGER is the ledger that contains all of the financial accounts of a business; contains offsetting debit and credit accounts (including control accounts). GENERAL PARTNERSHIP is one or more partners who are jointly and severally responsible or liable for the debts of the partnership. GEOGRAPHICAL SEGMENT is a component of an enterprise that (a) provides products and services within a particular economic environment and (b) that is subject to risks and returns that are different from those of components operating in other economic environments. GFOA is Government Finance Officers' Association. GI, among others, is an acronym for: Government Issue, General Increase, General Information, or General Issue. GIFTS-IN-KIND are non-cash gifts of tangible or intangible property. Tangible property can fall into two distinct categories, and its value is derived from its physical existence: 1. objects, such as equipment, software, automobiles, printed materials, etc.; or, 2. services, such as providing photography services. Intangible personal property is property whose value stems from intangible elements, e.g. patents and copyrights. GILT is a bond issued by the UK government. Gilts are equivalent to a U.S. Treasury security. GLOBAL BOND is a bond issued and traded outside the country whose currency it is denominated in, and outside the regulations of a single country; usually a bond issued by a non-European company for sale in Europe; also called Eurobond. GLOBAL CUSTODY is a term used within the investment banking industry in defining securities/monetary instruments that are traded internationally by Global Custodians. Those securities would be held in "Global Custody". Chase Bank originated the concept of providing Global Custody trading services for institutional investors trading in foreign markets in 1974. Banks recognized as Global Custodians provide their customers with Global Custody services in respect to securities traded and settled not only in the country in which the Global Custodian is located but also in numerous other countries throughout the world. GLOBAL DEPOSITORY RECEIPTS are receipts evidencing ownership in the underlying shares of a foreign company. Generally, U.S. banks and trusts issue American depository receipts (ADR) and American depository shares (ADS). They hold the foreign company securities underlying the receipts in their vaults. In addition to the underlying securities, the receipts entitle the shareholder to all dividends and capital gains. The bank or trust company issuing the receipts may have denominated the receipts in a currency other than the currency underlying the foreign security. U.S. and European banks and trust companies usually issue global depository receipts (GDR), which are receipts in the shares of global offering of a foreign issuer who has issued two securities simultaneously in two markets, usually publicly in non-U.S. markets and privately in the U.S. market. European banks and trust companies generally issue European depository receipts (EDR), sometimes called continental depository receipts (CDR) when issued in bearer form, which evidence ownership in foreign securities. GLOBAL FUND is a (mutual) fund that can invest in companies located anywhere in the world, including the home country, e.g. the United States. Whereas, an International Fund is a (mutual) fund that can invest only outside the home country. GLOBALIZATION is the name for the process of increasing the connectivity and interdependence of the world's markets and businesses. In its literal sense, globalization is a social change, an increased connectivity among societies and their elements due to transculturation; the explosive evolutions of transport and communication technologies to facilitate international cultural and economic exchange are examples of globalization. GMP is either Good Manufacturing Practice(s) or Gross Maximum Price. GMROI is an acronym for Gross Margin Return On Investment (retail). GNP see GROSS NATIONAL PRODUCT. GOAL is the milestone the organization aims to achieve that evolves from strategic issues or operational improvement planning. They transform strategic issues into specific performance targets that impact the entire organization, or operational improvement that is more localized in nature. They can be qualitative or quantitative. Dependent upon usage, GOALS are general in nature, while OBJECTIVES are specific, measurable and time-based. In some organizations, the meanings for GOAL and OBJECTIVE are reversed. GOING CONCERN refers to the liquidity of a concern. If the concern is illiquid, the viability of that concern being able to continue to operate is in doubt. GOING CONCERN CONCEPT is the underlying assumption that any accountant makes when he prepares a set of accounts. That the business under consideration will remain in existence for the foreseeable future. GOING CONCERN PRINCIPLE assumes that the accounting entity will maintain proper accounting records from the date of its establishment to the date of its liquidation. GOING LONG is the purchase of commodities, bonds, or stock with no immediate intention of selling them, i.e. the purchase is for long term investment or speculation. See GOING SHORT. GOING PUBLIC refers to those activities that relate to offering a private company's shares to the general investing public including registering with the SEC. GOING RATE is an expression that means the cost of the average of suppliers of like products or services. The connotation is that the cost will be "no more expensive than the competition." GOING SHORT is the selling of commodities, bonds, or stock before actually buying it. This happens when a dealer or investor believes the price of the item (on the date of its delivery to the buyer) will be lower than its current price. He or she expects to make a profit by buying the item on or just before its delivery date. See GOING LONG. GOLDEN RULES OF ACCOUNTING are: 1. Debits ALWAYS EQUAL Credits; 2. Increases DO NOT NECESSARILY EQUAL Decreases; and, 3. Assets - Liabilities = Owner's Equity (The Accounting Equation). GOODS, generally, is cargo shipped by land, sea or air. In asset-based finance, the term goods refers to equipment or inventory. GOODS RECEIVED NOTE is a document produced when goods are received into the company/factory. It will usually accompany goods to any inspection and is used to check against invoices before payment. GOODWILL is that intangible possession which enables a business to continue to earn a profit that is in excess of the normal or basic rate of profit earned by other businesses of similar type. The goodwill of a business may be due to a particularly favorable location, its reputation in the community, or the quality of its employer and employees. The evidence that goodwill exists is the proven ability to earn excess profits. Goodwill is created on the books of a newly purchased company to the extent that the purchase price of the company is greater than the value of its net tangible assets. There are a number of methods for valuing goodwill: a. Simple Capitalization - The net profit of the business is capitalized to determine the total value of the business. The value of all the tangible assets is subtracted from the total value to establish the value of the intangible assets, or goodwill. b. Excess Earnings - the amount of earnings that are in excess of those normally earned by a similar business are capitalized to determine the value of goodwill. c. Income Tax Method - The past five years net income is averaged and a reasonable expected rate of return for tangible assets and salary requirements are subtracted. The resulting value is then capitalized to arrive at the goodwill value. d. Market Value - The price a willing seller would accept and a willing buyer would pay for goodwill. e. Buy /Sell Agreement - The value of goodwill is established by a formula in the buy/ sell agreement. f. Rule of Thumb - Goodwill is worth one years gross income. GOVERNMENT ACCOUNTABILITY OFFICE (GAO) is the organization in the U.S. Congress that investigates the performance of the federal government. GAO evaluates the use of public funds and the performance of federal programs, while also providing analytical, investigative and legal services in order to support to Congress in its policy formulation and decision making processes. Most GAO reports are initiated at the request of Congress, while some are initiated by the agency itself or are required by law. GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) is a nonprofit organization responsible for establishing and improving accounting and financial reporting standards for governmental units. GOVERNMENT PROVISION OF DEPOSIT INSURANCE affects banks’ demands for deposits and households’ (and others’) supply of deposits to banks. The banking industry models deposit insurance premiums that banks pay as a fixed share of deposits. As is the case for many government subsidies, the government subsidies attributable to the under-pricing of deposit insurance are likely to be shared with depositors (and bank customers more generally) because that subsidy lowers the cost of providing that insurance. In response to the subsidy, banks raise the deposit interest rates that they pay. In doing so, banks transfer some of the government subsidy to depositors. GRACE PERIOD is the period of time between your statement date and the due date, i.e. it is the time period stipulated in most loan contracts and insurance policies during which a late payment will not result in penalties, default or cancellation. GRADUATED TAX see PROGRESSIVE TAX. GRANTEE is the person or entity to whom property or assets are transferred. GRANTOR is the person or entity who transfers property or assets. GREEN BOOK is a publication entitled U.S. Overseas Loans and Grants and Assistance from International Organizations. This data, which is grouped by country and geographic region, includes assistance from USAID, military assistance, P.L. 480, Export-Import Bank, etc. from 1945 to the last completed fiscal year.. This publication is released shortly after the Congressional Presentation is distributed. GREEN SHOE OPTION is a clause contained in the underwriting agreement of an initial public offering (IPO). The green shoe option, which is also often referred to as an over-allotment provision, allows the underwriting syndicate to buy up to an additional 15% of the shares at the offering price if public demand for the shares exceeds expectations and the stock trades above its offering price. GRNI is Goods Received Not Invoiced. GROSS is: a. the entire amount of income before any deductions are made; or, b. any total amount before any deductions (examples: gross income or gross labor). GROSS CONTRIBUTION is the starting amount prior to any relevant deductions have been made to the gross amount, e.g., Gross Contribution to Margin. GROSS DEBT, generally, is the sum total of an entities debt obligations. In corporate finance, it is usually comprised of debt financing, irrespective of its maturity, i.e. medium and long-term (various borrowings due in more than one year that have not yet been repaid) and short-term bank or financial borrowings (portion of long-term borrowings due in less than one year, discounted notes (same technique as discounting of bills of exchange), bank overdrafts, etc.). GROSS DOMESTIC PRODUCT (GDP) is the value of all the goods and services produced by workers and capital located within a country (or region), such as the United States, regardless of nationality of workers or ownership. Domestic measures relate to the physical location of the factors of production; they refer to production attributable to all labor and property located in a country. The national measures differ from the domestic measures by the net inflow -- that is, inflow less outflow -- of labor and property incomes from abroad. Gross Domestic Product includes production within national borders regardless of whether the labor and property inputs are domestically or foreign owned. GROSS INCOME see GROSS PROFIT. GROSS MARGIN is the ratio of gross profit to sales revenue. (sometimes used as a synonym for gross profit). For a manufacturer, gross margin is a measure of a company's efficiency in turning raw materials into income; for a retailer it measures their markup over wholesale. GROSS MARGIN is gross income divided by net sales, expressed as a percentage. GROSS NATIONAL PRODUCT (GNP) is the total dollar value of all final goods and services produced for consumption in society during a particular time period. The GNP does include allowances for depreciation and indirect business taxes such as those on sales and property. Gross national product is the output of labor and property of US nationals regardless of the location of the labor and property. Gross National Product includes income earned by the factors of production (assets and labor) owned by a country's residents but excludes income produced within the country's borders by factors of production owned by nonresidents. GROSS NEGLIGENCE is any action or an omission in reckless disregard of the consequences to the safety or property of another. Sometimes referred to as "very great negligence" and it is more then just neglect of ordinary care towards others or just inadvertence. Also known as the Latin term culpa lata. GROSS PAY is employee salary prior to the application of taxes and other deductions. GROSS PROFIT is net sales minus cost of sales. GROSS PROFIT MARGIN ANALYSIS indicates what the company's pricing policy is and what the true mark-up margins are. Calculated by: Revenue - Cost of Goods Sold / Revenue. See GROSS PROFIT MARGIN ON SALES for more in-depth definition. GROSS PROFIT MARGIN ON SALES (GPM) is one of the key performance indicators. The gross profit margin gives an indication on whether the average markup on goods and services is sufficient to cover expenses and make a profit. GPM shows the relationship between sales and the direct cost of products/services sold. It measures the ability of both to control costs and to pass along price increases through sales to customers. The gross profit margin should be stable over time. A persistent gradual decrease is likely to indicate that productivity needs to be increased to return profitability back to previous levels. GROSS PROFIT METHOD is an inventory estimate based on gross margin. GROSS RECEIPTS is the total amount received prior to the deduction of any allowances, discounts, credits, etc. GROSS REVENUE is income (at invoice values) received for goods and services over some given period of time. See also GROSS SALES. GROSS SALES is the total revenue at invoice value prior to any discounts or allowances. See also GROSS REVENUE. GROSS SURPLUS RATIO measures the margin on each dollar of operating revenue for the entity in question. The operating results before interest and depreciation, or gross surplus, are calculated as a percentage of total operating revenue. The gross surplus ratio shows the gross surplus as a percentage of the entity's turnover. If the percentage is high this could be interpreted as a sign that the entity is operating efficiently. GROSS WEIGHT is the weight of a shipment including packing material. GROUP is a number of individual companies assembled together; often having some unifying relationship. GROUP ACCOUNTS are the financial statements of a group of companies. These are usually presented in the form of consolidated accounts. GUARANTEE see WARRANTY. GUARANTEE DEPOSIT see SELLER GUARANTEE DEPOSIT. GUIDANCE, in corporate finance, is information that a company provides as an indication or estimate of their future earnings; sometimes known as "earnings guidance". GULL is Georgetown University Legal Library; important resource for sales tax information. |
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