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ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY

OVER 3,200 ACCOUNTING TERMS

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WACC see Weighted Average Cost of Capital.

WAGE is actual remuneration paid to an employee for services rendered. Minimum wages, in the U.S.A., are established by the federal Fair Labor Standards Act.

WAREHOUSE is a storehouse for goods and merchandise, e.g. to store inventory in a warehouse.

WARRANT, in government accounting, is an order drawn authorizing payment to a designated payee. In securities, it is a security entitling the holder to buy a proportionate amount of stock at some specified future date at a specified price, usually one higher than current market. This "warrant" is then traded as a security, the price of which reflects the value of the underlying stock. Warrants are issued by corporations and often used as a "sweetener" bundled with another class of security to enhance the marketability of the latter. Warrants are like call options, but with much longer time spans -- sometimes years. In addition, warrants are offered by corporations whereas exchange traded call options are not issued by firms.

WARRANTY is a guarantee given to a buyer from a seller that the goods or services purchased will perform as promised, or a refund will be given, repair will be done at no charge, or an exchange made.

WASTAGE see SCRAP.

WEAR AND TEAR is a lessening of asset value due to loss, damage, or depreciation resulting from ordinary use and exposure.

WEIGHTED AVERAGE is one in which different data in the data set are given different "weights." Varying subjective assumptions are derived for determining the level of importance for each data category. For example, many teachers will use a "weighted average" when calculating a student's grade in a course. A teacher might determine the final grade for the course by calculating that the test average is 60% of the grade, quiz average is 30% of the grade, and a single project is 10% of the grade.

WEIGHTED AVERAGE COST OF CAPITAL (WACC) is an average representing the expected return on all of a company's securities. Each source of capital, such as stocks, bonds, and other debt, is weighted in the calculation according to its prominence in the company's capital structure.

WHITE COLLAR CRIME is a number of miscellaneous nonviolent crimes lumped together as white collar crimes. There is no fixed definition of white collar crime, although it usually includes bribery, embezzlement, fraud, forgery, and violations of trust committed by corporations or individuals engaged in commerce. Historically, in the U.S. many white collar crimes have received lenient punishment from a criminal justice system that considered white collar crimes to be less serious than more violent crimes. Today, the trend is for stricter punishment of white collar crimes in recognition of the financial damage they inflict on society.

WHITE KNIGHT is an entity that comes to the rescue of a corporation that is being taken over.

WHITE PAPER 1. in a technological industry, is an informational brief offering an overview of a technology, product, issue, standard, policy, or solution - its importance, use and implementation, and business benefits. White Papers have emerged as the standard way of communicating more in-depth information to business decision-makers in terms of problems solved and markets addressed; or, 2. a White Paper can be an official government report of an investigation into a public event that received a great deal of publicity and notoriety; it indicates the official government position on a particular public issue.

WHOLLY OWNED SUBSIDIARY is an entity whose parent owns virtually 100% of its common stock.

WHOLESALE is the selling of goods to retail merchants; usually in large quantities for resale to consumers.

WINDFALL PROFIT/GAIN is profit that occurs suddenly as a result of an event not controlled by the company or person realizing the gain from the event. For example, a hurricane may bring extraordinary revenue to a roofing contractor as a result of the natural disaster.

WINDOW DRESSING is the act or an instance of making something appear deceptively attractive or favorable. Usually using something, e.g. inflated sales projections, to create a deceptively favorable or attractive impression.

WINDOW OF ENTERPRISE depicts the overall structure of accounting.

WIDGET is a device that is very useful for a particular job. Often used within a name of a fictitious company.

WIP is an acronym for Work in Process/Progress. Usually refers to inventory that has value added from labor or additional processing. When considered for inventory value, the value of the raw material plus the value added component is accounted for in determining the value of that inventory at that point in the process.

WITHDRAWAL is a. the act of taking out money or other capital from a controlled account; or, b. a retraction of a previously held position.

WITHOLDING, dependent upon application, is: a. income tax withheld from employees' wages and paid directly to the government by the employer; or, b. a tax deducted from dividends on investments which are paid to foreign investors. This can be claimed back if there is a Double Taxation Agreement in place between the countries. See WITHHOLDING TAX.

WITHHOLDING TAX usually refers to those taxes that are withheld from an employee’s compensation to account for that individuals tax liability on his/her compensation.

WITNESS is an individual who testifies at a trial on what he has seen, heard, or otherwise observed.

WORK CENTER, normally, is an individual production area or sub-process of an overall manufacturing process.

WORKER’S COMPENSATION is, usually, a state or privately managed insurance fund in the United States that reimburses employees for injuries suffered on the job.

WORKING ASSET STATEMENT is a net worth statement minus any personal assets, the car, house, boat, etc. A working asset statement will give a clear picture of an individual's invested assets.

WORKING CAPITAL (WC) is current assets minus current liabilities; also called net current assets or current capital. It measures the margin of protection for current creditors. It reflects the ability to finance current operations.

WORKING CAPITAL DAYS OF NET SALES measures how many days of net revenue are tied up in working capital. It is calculated: Working Capital Days of Net Sales = Working Capital / Net Revenue * 365. Low values tend to show problems in ability to support sales while high values may indicate under-capitalization problems.

WORKING CAPITAL RATIO is working capital expressed as a percentage of sales.

WORKING CAPITAL STATEMENT (WCS) is part of the financial statements' "Statements of Cash Flows or Changes in Financial Position." The WCS normally includes sections covering: Sources of Working Capital, Uses of Working Capital, and Working Capital Changes.

WORKING CAPITAL TURNOVER (WCT) shows how efficiently Working Capital (WC) is employed, i.e., it measures how efficiently the business is using its available assets. WCT measures the amount of Net Revenue generated per monetary unit of Working Capital. It varies widely by industry; therefore it is best to compare WCT to industry averages. Formula: Net Revenue / (Current Assets – Current Liabilities)

WORKING PAPERS, in accounting, are papers that document the evidence gathered by auditors to show the work they have done, the methods and procedures they have followed, and the conclusions they have developed in an audit of financial statements or other type of engagement.

WORKING TRIAL BALANCE is similar to the trial balance. Additionally, it contains columns for adjusting entries and the adjusted balance. This report is typically used at year-end to assist in making adjusting entries.

WORK IN PROCESS is parts and subassemblies in the process of becoming completed finished goods.

WORK IN PROGRESS a piece of work that is not yet finished.

WORK-OF-ART is a product of one of the fine arts; especially a painting or sculpture of artistic merit.

WORK SHEET is a document or schedule in which an accountant or auditor gathers information to substantiate an opinion concerning an account balance or 'test of transaction.'

WORKSTATION, in a manufacturing environment, is an area with equipment for the performance of a specialized task usually by a single individual. In a computer environment, it is a. an intelligent terminal or personal computer usually connected to a computer network or b. a powerful microcomputer used especially for scientific or engineering work.

WORLD TRADE ORGANIZATION (WTO) is the international trade body formed by the agreement of member nations. The WTO is an evolution of the GATT process designed to resolve trade disputes and work for the lowering of tariff and non-tariff trade barriers.

WORTH is an indefinite quantity of something having a specified value. See VALUE.

WRAP ACCOUNT at its most basic is an alternative form of commission arrangement between a securities firm and its client. Wrap accounts generally charge the client an annual fee based on assets in the account in lieu of a per transaction commission structure. In other words, the firm "wraps" together all the costs and charges them off as a "management fee”. Firms often add further features to wrap accounts such as investment management, custodial services, and enhanced reporting.

WRITE-DOWN is the reduction in the book value of an asset.

WRITE-OFF is to decrease the value of an item, e.g., a tax write-off decreases tax liability, a vehicle involved in an accident can be declared a write-off if the cost to repair is in excess of the value of the vehicle.

WRITE-UP is the increase in value of an asset, but it is seldom used and is not allowed in GAAP (Generally Accepted Accounting Principles).

WRITE-UP SERVICE is the provisioning of all reporting requirements of bookkeeping and accounting services. The following is a non-exhaustive list of reporting services provided:

1099s report preparation for subcontractors.
Bank account reconciliation.
Check coding.
Fixed asset schedules.
Maintenance of general ledger.
Payroll deposit calculations.
Payroll tax filings.
Personal property tax returns.
Preparation of internal financial statements.

W-2 FORM, Wage and Tax Statement, is the form U.S. employers are required by the IRS to issue for each employee before February 28th of the following year. The W2 form lists the employee's total wages/compensation and taxes withheld within the calendar year of the year preceding.

W-3 FORM, Transmittal of Wage and Tax Statements, is a form employers must use when filing paper W-2s with the Social Security Administration. Form W-3 summarizes the total wages, Social Security wages, federal income tax withheld, and FICA tax withheld from employees during the year and lists the number of W-2s being transmitted.

W-4 FORM, Employee's Withholding Allowance Certification , is completed by each employee so that the employer can withhold the correct federal income tax from the employee's pay. Because tax situations may change, employees may want to refigure their withholding each year.