Back charge - Item previously charged to an account but unpaid. The current invoice requests payment of the previous charge as well as of current charges.

Back door listing - This is a method that a company which failed to get listed on the stock exchange ( stock market) acquires and merges with a company that is already listed on that exchange, thereby getting a 'back door' listing.

Backlog - Is used to refer to the value of the unfilled orders placed with a company (manufacturing).

Back order - Customer's order that cannot be filled at the present time usually because the merchandise is not currently in stock. As soon as the product is available, it will be shipped to the customer. There usually exists a company policy of how long an unshipped order remains an order without some sort of confirmation or communication. An excessive amount of back orders may indicate to the accountant that poor inventory planning exists.

Back up - To make a duplicate copy of original data or files usually stored on a separate data storage medium. Backup ensures the recoverability of files in the event of loss of the original data.

Backward vertical integration - Merging with a firm involved  with the previous stage of production.

Bad debt - Account or note receivable that proves to be entirely or partially uncollectible despite collection efforts. If the allowance method of estimating bad debts is used, the entry at time of uncollectibility is to debit allowance for bad debts and credit accounts receivable. If the direct write-off method is employed, the entry is to debit bad debt expense and credit accounts receivable.

Bad debts account- An account in the general ledger to record the value of unrecoverable debts from customers. Real bad debts or those that are likely to happen can be deducted as expenses against tax liability (provided they refer specifically to a customer).

Bad debts reserve account- An account used to record an estimate of bad debts for the year (usually as a percentage of sales). This cannot be deducted as an expense against tax liability.

Balance - 1. the difference between total debits and total credits in an account. Or 2.the equality of total debits and total credits of all accounts in a general ledger in the preparation of a trial balance. Or  3. the equality of a control account in the general ledger (e.g., accounts receivable) and the total balance of all accounts in the subsidiary ledger (e.g., customer accounts). Or 4. balance in a bank account. Or 5. balance of a loan.

Balanced budget - One in which total expenditures equal total revenue. An entity has a budget surplus if expenditures are less than revenues. It has a budget deficit if expenditures are greater than revenues.

Balanced budget multiplier - The change in income divided by the tax-financed change in government expenditure that brought it about.

Balanced scorecard - An approach to performance measurement that also focuses on what managers are doing today to create future shareholder value. A balanced scorecard is a set of performance measures constructed for four dimensions of performance. The dimensions are financial, customer, internal processes, and learning and growth. Having financial measures is critical even if they are backward looking. After all, they have a great effect on the evaluation of the company by shareholders and creditors. Customer measures examine the company's success in meeting customer expectations. Internal process measures examine the company's success in improving critical business processes. And learning and growth measures examine the company's success in improving its ability to adapt, innovate, and grow. The customer, internal processes, and learning and growth measures are generally thought to be predictive of future success (i.e., they are not backward looking). After reviewing these measures, note how "balance" is achieved: (I) performance is assessed across a balanced set of dimensions (financial, customer, internal processes, and innovation); (2) quantitative measures (e.g., number of defects) are balanced with qualitativemeasures (e.g., ratings of customer satisfaction); and (3) there is a balance of backward-looking measures (e.g., financial measures like growth in sales) and forward-looking measures (e.g., number of new patents as an innovation measure).

Balance of payments (BOP) - Record of the transactions of a country with the rest of the world. There are three main accounts in the balance of payments: (I) the current account, (2) the capital account, and (3) gold. The current account records trade in goods and services, as well as transfer payments. Services include freight, royalty payments, and interest payments. Transfer payments consist of remittances, gifts, and grants. The balance of trade simply records trade in goods. The capital account records purchases and sales of investments, such as stocks, bonds and land.

Balance of payments on current account – The balance of trade in goods and services plus net investment income and current transfers.

Balance of trade (BOT) - The difference between the value of visible exports and the value of visible imports.

Balance on trade in goods - Exports of goods minus imports of goods.

Balance on trade in goods and services (or balance of trade) - Exports of goods and services minus imports of goods and services.

Balance on trade in services - Exports of services minus imports of services.

Balance sheet - The Balance Sheet shows the financial position of a business at a point in time.  It is a snapshot of the organisation at the date for which it was prepared.  It shows all the asset, liabilities and equity of a business.

Balancing charge - This is a charge that is calculated when a fixed asset is sold or disposed of.  It may be an income or expense item.

Balancing item - The estimated net value of omissions from all other items recorded on the balance of payments accounts.

Balloon payment -  Last loan payment when it is significantly more than the prior payments; also called partially amortized loans. For example, a debt agreement might provide for a balloon payment when future refi­nancing is anticipated.

Bank balance - Amount in a bank deposit account, such as a checking or savings account, as of a certain specified time or date, indicated on a bank statement.

Bank bills - Bills that have been accepted by another institution and hence insured against default.

Bank (or deposits) multiplier - The number of times greater the expansion of bank deposits in that the additional liquidity in banks causes it – 1/L (the inverse of the liquidity ratio).

Bank notes - Paper money issued by commercial banks.

Bank reconciliation -Term used when settling differences contained in the BANK STATEMENT and the cash account in the books of the bank's customer. Rarely do the ending balances agree. To reflect the reconciling items, a bank reconciliation is required.

Bankrupt - When either an unincorporated business or liabilities are greater than it has in assets.  The person can file or have their creditors file for them to be declared bankrupt.

Bankruptcy - 1. (Business) situation in which a business' debt exceeds the fair market value of its assets. It is also a court action under which a debtor may be discharged for unpaid debts, in whole or in part, and in which creditors receive distributions of assets from the debtor's property under the supervision of the court. Or 2. (Personal) legal process that is available for an individual who is overextended financially and is unable to pay his debts. The individual can file for bankruptcy in order to seek to legally eliminate some or all of his debts.

Bank statement - A statement from a financial institution reporting all transactions in the accounts held by the account holder.

Bar chart - A chart where numerical information is represented by blocks or bars.

Barometric firm price leadership - Where the price leader is the one whose prices are believed to reflect market conditions in the most satisfact­ory way.

Barriers to entry - Barriers that make it difficult for firms to enter an industry and offer competition to existing producers or suppliers.

Barter - A system of exchange in which goods or services are exchanged for goods or services without the use of money.

Barter economy - An economy where people exchange goods and services directly with one another without any payment of money. Workers would be paid with bundles of goods.

Base amount - The amount from which something numerical is begun or developed or calculated or explained, e.g. base year.

Base year - The year which is chosen as the point of reference for comparison.

Basic earnings per share - net income available to common stockholders divided by the weighted-average number of shares out­standing. Net income available to common stockholders is net income less declared preferred dividendss for the year. If the preferred stock is non-cumulative, preferred stock dividends are subtracted only if they are declared during the year. If the preferred stock is cumulative, the divi­dends are deducted even if they are not declared in the current year. The weighted-average number of common stock shares outstanding is deter­mined by multiplying the number of shares issued and outstanding for any time period by a fraction, the numerator being the number of months the shares have been outstanding and the denominator being the number of months in the period (e.g., 12 months for annual reporting).

Basic economic problem – How scarce resources with different uses are allocated to satisfy wants.

Basic rate of tax - The main marginal rate of tax, applying to most people's incomes.

Basis - The starting value or  used point in calculating the gain or loss, depreciation, amortisation and depletion,. For example, in an asset sale, gain is proceeds minus basis, where basis is the amount on which depreciation is calculated.

Basis of accounting - Method of recognizing revenues and expenses. Under the accrual basis of accounting, revenues are recog­nized as goods are sold and services are rendered regardless of the time when cash is received. Expenses are recognized in the period when the related revenue is recognized and the difference is the net income figure for a particular period. Under the cash basis of accounting, revenues are recognized only when money is received and expenses are recognized only when money is paid. Cash basis finan­cial statements, however, distort financial position and operating results of an organization.

Basis points - Is given as 0.01% in yield . For example, in increasing from 6.00% to 6.05%, the yield increases by a total of five basis points.

Batch - Refers to a collection of things or items that are to be handled or processed at the same time i.e. batch production.

Batch costing - The identification and assigning of relevant costs incurred in completing the manufacturing process of a specified batch of components or items. From the batch cost is is possible to then calculate the unit cost by dividing it by the number of components in the batch.

Batching (accounting) -  The collecting and organising of incoming invoices before processing. 2. (marketing) A form of price discrimination where products are joined or packaged  together in order increase sales i.e. a tennis rackets player with tennis balls.

Batch production – A method which involves completing one operation at a time on all units before performing the next.

B/D - Brought Down (T Account).

Beggar-my-neighbour policies - Policies designed to increase a country's prosperity (especially by reducing its unemployment ) at the expense of reducing prosperity in other countries (especially by increasing their unemployment).

Behavioural accounting - 1. approach to accounting that stresses psychological considerations in decision making; also called human resource accounting. For example, a budget should be participative so departmental managers who are involved with it will internalize the goals. Also profit centres engage a manager's ego because the financial results of the entity are a direct reflection of the manager's performance. In human resource accounting, a valuation is placed on people and reflected as an asset in the balance sheet. Or 2. theory that the management accounting function is essentially behavioural. The theory states that the nature and scope of accounting systems is materially influenced by the view of human behaviour that is held by the accountants who design and operate these systems. Participative budgeting is a simple application of behavioural accounting.

Behavioural theories - Theories which state that business objectives are determined jointly by groups of interested parties.

Below the line- 1.This term is applied to items within a business which would not normally be associated with the everyday running of a business. 2. Advertising that uses low profile media such as direct mail or the Internet. See above the line .

Benchmark - 1. a standard, norm, or yardstick to judge one's performance as an individual or company. Or 2. a standard measurement or metric used to evaluate the performance of a portfolio. For example, an appropriate stock or bond index can be used to gauge the performance of an investment such as a mutual fund.

Benchmarking (best practices) - The process of searching for new and better procedures by comparing your own procedures to that of the very best. The objective is to measure the key outputs of a business process or function against the best and to analyze the reasons for the performance difference. Benchmarking applies to services and practices as well as to products and is an ongoing systematic process. It entails both quantitative and qualitative measurements that allow both an internal and an external assessment Process benchmarking is the process of assessing the quality of key internal processes by com­paring them with those of other firms. In results benchmarking, a firm examines the end product or service of another company, focusing on product/service specifications and performance results.

Beneficial owner - Refers to the individual who enjoys the benefits of ownership even though the title may be in a different class="d-title" name.

Beneficiary - Individual who will receive an inheritance upon the death of another. The proceeds of an insurance policy may be in the form of a lump-sum or annuity.

Benefit period - The estimated useful life period of time that an asset will be productive.

Benefits in kind - Goods or services which the state provides directly to the recipient at no charge or at a subsidised price. Alternatively, the state can subsidise the private sector to provide them.

Benefits principle - The idea that people should pay taxes based on the benefits they receive from government services.

Beta - Measure of systematic or undiversifiable risk of a stock. A beta coefficient of more than 1 means that the company's stock price has shown more volatility than the market index (e.g., Standard & Poor's 500) to which it is being related; usually, that indicates it is a risky security. If the beta is less than I, it is less volatile than the market average. If it equals I, its risk is the same as the market index. High variability in stock price may indicate greater business risk, instability in operations, and low quality of earnings.

Bid and asked - Term in the over-the-counter market for unlisted securities. Bid is the highest price an investor is willing to pay while asked is the lowest price a seller is willing to take. Together, the two prices represent a quotation in that stock. A spread is the difference between the bid and asked prices. Bid and offer are the more common terms in discussing listed securities.

Bilateral monopoly - Where a monopsony buyer faces a monopoly seller.

Bill - A term typically used to describe a purchase invoice (eg. an invoice from a supplier).

Billable - Refers to the costs and/or other expenses that are covered by the contractual agreement between two parties  that may be billed.

Billable hours - Normally refers to those hours a professional has worked and then billed to their client.

Bill of exchange - A certificate promising to repay a stated amount on a certain date, typically three months from the issue of the bill. Bills pay no interest as such, but are sold at a discount and redeemed at face value, thereby earning a rate of discount for the purchaser.

Bill of lading - Written document issued by a carrier that specifies contractual conditions and terms (such as time, place, person class="d-title" named for receipt) for delivery of goods. It also evidences receipt of goods. Upon transfer of the bill, title is passed to the goods.

Bill of sale - Written document that transfers goods, title, or other interests from a seller to a buyer and specifies the terms and conditions of the transaction.

Bills payable - Are bills which have been accepted, these are called "bills payable," and are entered in a ledger account under that class="d-title" name.

Birth-rate -  The number of births per 1000 people in the population per year.

Black economy I parallel economy - Unofficial economic activity. It cannot be precisely measured because it fails to go through official accounts.

Black market I parallel market - An illegal trading arrangement in which buyers and sellers do business at a price higher than the legally imposed price ceiling.

Blanket authorisation - Is the  authority to act without having to gain further approval.

Blind trust - Trust where the assets are not disclosed to their owner.  Often used when people gain public office to avoid conflict of interest.

Blending - A graphical approach to linear programming which deals with resource allocation subject to constraints.

Blue chip - Common stock of high quality that has a long record of earnings and dividend payments. Blue chip stocks are often viewed as long-term investment instruments. They have low risk and provide modest but dependable return. Examples are International Telephone and Telegraph and Minnesota Mining and Manufacturing. Blue chip may also refer to a high-quality bond that is secure and stable in price and interest payments.

Board of directors - Group of persons elected by a company's stockholders to run the business according to the corporate charter. Senior management is appointed by the Board. Typically, the Board consists of top management executives (inside directors) and repre­sentatives external to the company (outside directors). The Board has significant influence over accounting and financial policies of the business entity.

Bond - 1.  a written promise by a company, government, or other institution to pay the face amount at the maturity date. Periodic interest payments are usually required. Bonds are typically stated in $1000 denomi­nations. Bonds may be secured by collateral or unsecured (deben­ture). A registered bond has the class="d-title" name of the owner on the issuer's records, whereas the holder of a bearer bond presents coupons for interest payments. Sinking fund bonds require the company to make annual deposits to a trustee. At maturity, the amount in the sinking fund (principal plus interest) is sufficient to pay the face of the bond. From the company's perspective, a bond issue has several advantages over a stock issue. Interest expense is tax deductible, whereas dividend payments are not. During inflation, debt is paid back in cheaper dollars. When bonds are issued at face value, the entry is to debit cash and credit bonds payable. When bonds are issued at a discount, such as with zero-coupon bonds, the entry is to debit cash and bond discount and credit bonds payable. The entry to record the interest each period is to debit interest expense and credit cash. Or 2. the cash or property given to assure performance (i.e., contractor depositing a performance bond on a construction project to be com­pleted by a specified date). Or 3. type of insurance compensating employer for employee dishonesty.

Bonded warehouse - A warehouse that is authorised by customs department for the storage of items on which payment of duty is not required until the goods are removed.

Bond discount - The amount below face value at which a bond is issued.

Bond premium - The amount in excess of face value (maturity value) at which a bond is issued.

Bonus - Usually an extra payment made in recognition of the contribution a worker has made to the company.

Book/s  - In accounting is used to refers to the ledgers or journals (for example: general journal). Used a verb it means to the recording of an entry (e.g to book the sale).

Book cost - This is the cost when asset is purchased or realised, i.e. or in other words the amount paid to get the asset.

Bookkeeping - Accounting support functions performed by the book keeper. Bookkeeping is the most basic of the accounting duties and requires less education and experience.

Books of account - Theses are the financial records of an entity.

Book value - 1. net amount shown for an asset on the balance sheet. It equals the gross cost less the related valuation account. For example, the book value of an auto is its initial cost less the accumulated depreciation. Since book value is based on historical cost, it will differ from market value. Book value is a going-concern value. Or 2. carrying value of a liability equal to its face value less unamortised discount.

Boom - The stage when an economy is at the peak

Bottom line - 1. net income after taxes. Or 2. expression as to the end-result of something. An example is the sales generated from an advertising campaign.

Bounced cheque - A cheque which has been written for an amount greater than the account balance and is not paid by the bank because of the insufficient funds.

Branch accounting - Normally means the accounting for regions separated geographically or sections of enterprises. The accounting system which is adopted depends upon the degree of centralisation of the the branch and how much it is controlled from its central or head office.

Brand - A class="d-title" name given by a business to one or more of its products, as a means of identification by the customer.

Brand image - The view or opinion held by consumers/customers about a particular brand of an item. A stronger the brand image is more likely to have  an inelastic the demand curve.

Brand loyalty - This is used to refer to the situation when a consumer is unlikely or reluctant to switch from consumption of this good. The consumer is said to be  "loyal" to the brand.

Brand class="d-title" name - Means an identifiable or recognised class="d-title" name given to a product or service often registered as a trademark e.g. Nike.

Breach of contract - Breaking of terms agreed in the contract of employment by the employers and the employees.

Break-even - Where a business sells just enough to cover its costs.

Break-even analysis - Is a method of analysis used to determine the number of units that need to be sold to reach a break-even point in a business i.e. where total revenue is equal to total cost.

Break-even chart - A graph containing the total cost and total revenue functions. illustrating the break-even point.

Break-even point - The level of output where total revenue and total cost are the same.

Break-even price - The price at which a firm is just able to cover all of its costs, including the opportunity cost of capital.

Brentton Woods system - An adjustable peg system whereby currencies were pegged to the US dollar. The USA maintained convertibility of the dollar into gold at the rate of $35 to an ounce.

Bridge loan (bridging loan) - short-term loan that is made in expectation of interme­diate- or long-term loans; also called a swing loan. The interest rate on the bridge loan is generally higher than on longer term loans. An exam­ple would be a temporary loan that is made to permit a closing on a building purchase prior to a closing on long-term mortgage financing.

Broad definitions of money - Items in narrow definitions plus other items that can be readily converted into cash.­

Broad Money in UK (M4) - Cash in circulation plus retail and wholesale bank and building society deposits.

Brokerage - Cab be either the business of a broker who charges a fee to arrange a contract between two parties, or, the place where a broker carries out their business.

Brought forward - The act of bringing a previously recognised  value that was determined in the past, e.g. a balance brought forward from the previous accounting period at the start of a new accounting period.

Brownfield site - Areas of land which were once used for urban development.

Budget - A quantitative economic plan prepared and agreed in advance. It is used for planning and control purposes.

Budget (government) -  The annual statement by the government of its financial plan, it itemizes spending programmes and their costs, tax revenues and the proposed deficit or surplus.

Budget surplus (or budget deficit) - The difference between government sector revenue and expenditure in a given period of time. If revenue exceeds expenditure, the government sector has a budget surplus. If expenditure exceeds revenue, the government sector has a budget deficit

Budgetary accounting - Contrary to financial accounting, looks forward: it measures the cost of planned acquisitions and the use of economic resources in the future.

Budgetary accountability - In government accounting, process of recording budgetary amounts in the accounts of a fund. Recording the balances has a dual effect. (1) The control aspect of the budgetary function is stressed, and (2) recognition is given to the legal foundations of the budget. The need for such recording is consistent with the responsibility of fund accounting. It is concerned with per­formance in terms of authority to act and the action itself.

Budgetary deficit - Occurs when expenditures are greater than revenues.

Budgetary control – A business system which involves making future plans. comparing the actual results with the planned objectives and then investigating causes of any differences.

Budgeting - The planning of intended revenues and expenditures over a specified time period.

Budgeting process - The process of collecting the data and preparing the budget for future activities of an entity or activity. This process may include money or time and is aimed at achieving the desired result.

Buffer - Is something that stands in between two other things e.g. an inventory buffer would be additional inventory kept on hand over and above the  committed or planned level of inventory.

Buffer stocks (accounting) - Stocks held as a precaution to cope with unforeseen demand.

Buffer Stock (economics) - An organisation, usually run by producers or the government, that attempts to smooth out fluctuations in prices by the purchase and sale of stocks.

Burn rate - The rate at which a company spends its money. Example: if a company had cash reserves of $120m and it was currently spending $10m a month, then you could say that at the current 'burn rate' the company will run out of cash in 1 year.

Bursary - The treasury of a public institution or religious order.

Business cycle I trade cycle - Fluctuations of national income around its trend value, after seasonal fluctuations have been removed, that follow a wavelike pattern..

Business decisions - These include strategic decisions (very important ones which can affect the overall success of the business), tactical decisions (those which are taken more frequently and which are less important) and operational decisions (day-to-day decisions which will be taken by lower-level managers).

Business entity - The legal form under which a business is conducted. Examples of business entities are sole proprietorship, general partnership, corporation, or, a limited liability company.

Business entity principle - A firm or business is seen as separate from its owner(s) in the presentation of the final accounts and financial statements.

Business ethics  - The influence of values and beliefs upon the conduct and operation of the business.

Business plan - A statement made by a business, outlining the way it will attempt to achieve its objectives. A business plan should includes the  product(s) and/or service(s), the market situation, an analysis of competitors, the key people involved in the business, financing needs and projections, and the financial rewards/results if the business plan is successful.

Business segment - Is used to refer to a component of a firm that (a) may provides a single product/service or a group of related products/services and/or(b) that is or can be subject to risks and rewards that are different from those of other of the businesses segments.

Business structure – The way in which a business is organized.

Business valuation - The price that a hypothetical buyer (estimate) would pay for a business or entity under a given set of circumstances.

Buyer’s market - Means the quantity or supply of items for sale exceeds the demand or amount consumers are willing and able to buy at the current price. It is often characterised by low prices.

By laws - Can mean the provisions of corporate policies or refer to local council rules and regulations.

By-products - Materials which are produced as a result of a process designed to produce a different material.