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O - Object cost to Owners equity - Dictionary

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Object code - Is used to designate or list the type of revenue or expense that is to be charged to the account.

Object cost -  The sum or total cost involved in the production an item. It consists of the direct cost (labour and material) + the overhead cost = the total object cost.

Objective - This normally refers to statement  of specific and measurable time period or other outcomes which are verifiable that tries to get the business to respond better to the circumstances of its environment in order achieve the firms goals. Dependent upon how it is used, goals tend to general in their nature, while objectives tend to be more specific.

Objective probability - Characteristic obtained as a result of repeated experiments or repeated trials rather than on the basis of subjective estimates. It is useful in estimating dollar value, quantity, or other characteristics of a given universe for purposes of making statistical decisions.

Objectives of financial statements – The goals of financial statements are supposed to accomplish. The intent of financial statements is to provide information useful in economic decision making. In particular, the data should be useful in making investment and credit decisions. Financial statements should provide a reliable indication of a company's financial position, operating results, and changes in financial position. Also, statement components and categories should aid in decisions.

Objectivity - Freedom from subjective valuation and bias in making an accounting decision. Objectivity applies to a measurement having supporting evidence. Verifiability exists in that two accountants working independently of each other will come up with similar answers. An example of objectivity is recognising revenue at time of sale because it emanates from an independent external transaction.

Objectivity principle This principle states that the accounts should be recorded using objective rather than subjective evidence. Objective evidence is taken to mean, evidence that a different individual looking at the same data would arrive at the same conclusion. The principle means accounting entries should be based on the facts and not based on personal individual opinions or their feelings.

Obligation - In business, an obligation refers to a legal duty that requires an entity pay or possibly do something.

Obsolete - An asset that is no longer any use to a company.

Obsolescence – A  major factor in depreciation, resulting from technological or market changes. Wear and tear from use and natural deteri­oration through interaction of the elements are other factors that cause depreciation in assets. It is also a big factor in inventory risk.

Occupancy cost - Any costs incurred by tenants relating to their lease, such as rent,  parking charges, operating expense increases, moving expenses, renovations etc.

Occupational mobility - The ease with which workers can switch from one type of job, with particular skills, to another requiring different skills.

Occupational immobility - The lack of ability or willingness of people to move to other jobs irrespective of location.

Odd-lot Any exception to the standard trading unit of a security.

OECD - Organization for Economic Co-operation and Development - (Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom, and United States).

Official interest rate - The rate of interest that the central bank or government charges to banks or the rate charged to money market traders  e.g., federal funds rate and or base rate.

Official reserves - The central government's holdings of foreign currencies.

Off peak - Not in the period of most frequented or getting the heaviest levels of use.  This period normally has lower rates e.g. Airfares taken not winter are often off-peak fares.

Offset account -  An account that reduces the gross amount of another account to derive a net balance. Accumulated depreciation, which is a contra account to fixed assets to obtain book value, is an example of an offset account. Discount on note payable, which is a reduction of notes payable to derive the carrying value, is another example.

Offsetting error - An error that cancels out another error; also called counterbalancing error.

Off-the-job training - Being trained away from the workplace, usually by specialist trainers.

Oligopoly - A market type in which small numbers of producers compete with each other.

Oligopsony - A market with just a few buyers or employers.

Omitted - To leave out or not done, such as to prevent from being included or considered or accepted.

On account - 1. purchase or sale on credit. For example, the journal entry for a sale on account is to debit accounts receivable and credit sales. Or 2. partial payment on an obligation.

On line - 1. computer equipment under the control of the central processing unit (CPU). Examples are disk drives and printers. Or 2. linking up one computer to another computer that is in a remote location. This connection is made possible by using the telephone lines. The computers transmit data to each other.

On line data base - The information transmitted by telephone, microwaves, and so on, that may be accessed with a decoding device (called a MODEM) and displayed on a monitor or as a printout. A data base for accountants may consist of information such as tax laws and regulations, accounting practices and footnote references, industry data, financial information on companies, investment information, or economic and political statistics.

On line searching - Is using a computer retrieval system to obtain information from a database such as on the Internet.  Now sometimes referred to as Googleing.

One off – An event that occurs only once and is not expected to be repeated, e.g. a one-off sale to a specific customer.

Onerous contractA contract where the unavoidable costs associated with the meeting the requirements under the contract is greater than the economic benefits or income to be received from completing the contract.

One stop shopping – The opportunity to purchase a variety of products from a single location.

One-way communication - Transmission of a message which does not call for or require a response.

On-the-job training - Watching a more experienced worker doing the job and learning skills while under their supervision.

Open account - 1. account that has a nonzero credit or debit balance. Or 2. credit or charge account that is, an account initiated by a creditor on the basis of credit standing. It may also refer to a balance currently owing due to a credit sale, under mutually agreed upon terms (such as method of payment, trade discounts, delivery date, and quantities).

Open economy- An economy that engages in international trade.

Open book management - A management philosophy that gets all employees involved in increasing financial performance and ensures that all workers have access to operational and financial information necessary to accomplishing performance improvements.

Opening cash (or bank) balance - The amount of cash held by the business at the start of the month operational decisions see business decisions.

Open item - A contracted or scheduled commitment that has not yet been reflected in the accounts but will lead to expenditures at some future date.

Open market operations - The purchase and sale of securities (usually short-term government securities) on the open market by the central bank.

Open market value (OMV) - An opinion of what the best price that the sale of an asset or interest in an asset would have been received for cash  on the date given for valuation of that item.

Opening balance - The balance of an account at the start of an accounting period.

Opening entry – An entry or a series of entries usually undertaken upon forming a new enterprise, or new accounts, or a new accounting period. A new enterprise requires opening entries with respect to the owner's interests, assets, and liabilities on the books.

Operating activities - The business activities that involve the cash effects of transactions and other events that enter into the determination of net income.

Operating allowance Is the money or allowance advanced to carry out specific operations.

Operating assets Refers to the long-term, non current assets acquired for the business to use in its activates rather than for resale e.g.  property, plant, and equipment.

Operating budgetIs the budget that relates on the budgeted income (profit and loss) statement and the supporting documentation and schedules.  An operating budget embraces the impacts of operating decisions. It contains forecasts of sales, net income, the cost of goods sold, selling and administrative expenses, and other expenses. The cornerstone of an operational budget is forecasted sales. Therefore, the sales budgetis the basic building block for the operational budget. Once the sales budget is prepared, then the production budget can be formulated. The operational budget also consists of the ending inventory budget, direct material budget, direct labor budget, factory overhead budget, selling and administrative budget, and budgeted income statement.

Operating cycle Is the average time period between buying inventory and receiving cash proceeds from its eventual sale.

Operating decisions - The decisions that involve routine tasks, such as planning production and sales, scheduling personnel and equipment, adjusting production rates, and controlling the quality of production.

Operating expendituresRefers to the amount used over a specific period of time directly used to support the day-to-day operations of a business such as wages, office supplies and such like.

Operating expensesAre the costs associated with the selling and administrative activities of the company.

Operating incomeRefers to the revenue minus cost of sales and other related operating expenses that apply to the day-to-day operational activities of the firm. It does not include  items such as interest income, interest expense ,extraordinary items or taxes.

Operating loss - The amount by which the cost of goods sold plus operating expenses exceeds operating revenues.

Operating margin Refers to the ratio of a firms operating income as compared to its sales revenue.

Operating profitRefers to the gross profit less the firms operating expenses.

Operating profit to sales ratio – This ratio discounts the effect of differing tax rates and other benefits to show a more accurate or realistic situation of the returns from the firm.

Operating ratioIs calculated by company operating expenses divided by its operating revenues. It is a measure of a firm's operating efficiency

Operating revenue Is the net sales plus other regular income sources related to the normal business operations carried out by the entity.

Operating riskIs the risk caused by fluctuations of operating income. Sometimes this is called business risk.

Operating system - Is computer program that allows users to enter and run their software packages i.e. Windows XP.

Operational audit Is the evaluation made of management's performance and conformity with policies and budgets. The organisation and its operations are analysed, including appraisal of structure, controls, procedures, and processes.

Operational gearing -  The higher is the percentage of fixed costs in relation to the variable operating costs, the higher is the operational gearing of a firm. Therefore the higher the risk.

Operational decisions - Lower level, often administrative decisions with little or no risk.

Operational research ­ - A logical and scientific approach to decision making which uses calculations.

Opportunism The legal behaviour of self-interest seeking whereby party who has information that another other party does not takes advantage of this information. This is different from insider trading which is illegal.

Opportunistic behaviourRefers to when party takes advantage of knowledge that the another party does not have, in order to further their interests, and fails to tell the other such information.

Opportunity cost - The cost of using resources for a certain purpose, measured by the benefit given up by not using them in their best alternative use. The best alternative forgone.

Opportunity cost approach – (Management) Refers to the decision method in which the concept of opportunity cost  is applied to solve a short-term, non routine decision problem. Opportunity cost represents the net benefit lost by rejecting some alternative course of action. Its significance in decision making is that the best decision is always sought, since it considers the cost of the best available alternative not taken.

Optimal currency area - The optimal size of a currency area is the one that maximises the benefits from having a single currency relative to the costs. If the area were increased or decreased in size, the costs would rise relative to the benefits.

Optimal price - The profit maximising price. Where marginal revenue is equal to marginal cost.

Optimal solution -  The most profitable or the least costly solution that simultaneously satisfies all the constraints.

Optimism - To expect the best in the issue under consideration.

Option - 1. ability or right to choose a certain alternative. Or 2. right to buy/sell something at a specified price within a specified period of time. If the right is not exercised within the specified time, the option expires.

Ordering costs - Are all costs associated with preparing a purchase order. These include the cost of preparing a purchase invoice, telephone, salaries of purchasing clerks, and stationery.

Order of performanceRefers to where fixed assets are listed in the balance sheet of a firm in a descending order based on their permanence (i.e. land, buildings, then equipment etc.).

Ordinary course of businessRefers to the operations of a business that could be normally expected to occur under their day to day operations.

Ordinary income  - 1. earnings attributable to the nominal and recurring business operations of the entity. Or 2. in taxation, income on the sale of an investment held for 6 months or less.

Ordinary share - This is a type of share issued by a limited company. It carries the highest risk but usually attracts the highest rewards.

Organic growth - Growth achieved through the expansion of current business activities.

Organisational structure - The levels of management and division of responsibilities within an organisation.

Organisation chart - A diagram which illustrates the structure of an organisation.

Organisation costsRefers to the amounts of money spent in beginning a business organisation.

Organisation theory - A set of hypotheses that predicts that the substance of a firm's decisions is affected by its size and form of organisation.

Original book of entry- A book which contains the details of the day to day transactions of a business (see journal(s)).

Original entry - The recording a business transaction in a journal.

Other assets -  Refers to the balance sheet category for minor assets not classified under the typical headings (e.g., current assets, intangible asset, and long-term investments). This type of asset may be immaterial in amount relative to total assets. An example is obsolete machinery to be sold.

Other income Refers to income gained from activities that are not part of the businesses normal operations.

Out of pocket - The actual cash outlays made during the period for wages, amenities, advertising, and other operating expenses.

Output - The goods or services resulting from production. Output depends on the amount of resources and how they are 1 Different amounts and combinations of inputs will lead to different amounts of output. If output is to be produced efficiently, then inputs should be combined in the optimum proportions

Output gap - Potential national income minus actual national income. Also called the GDP gap.

Outsiders - Those out of work or employed on, a casual, part-time or short-term basis, who have little or no power to influence wages or employment.

Outsource -  Is the process of obtaining items or services from a supplier external to the business organisation.  These activities may have previously been done within the organisation.

Outsourcing - The contracting out of work to of the businesses that might otherwise have been performed within the organisation.

Outstanding - The amount owed as a debt, example: outstanding bills.

Outstanding shares Refers to the number  or amount of shares which currently are owned by all a company's investors.  Shares that the company may  have repurchased or possibly retired are not counted as outstanding stock.

Overdraft - 1. a draft that is greater than the credit balance of the account. Or 2. a facility of revolving credit (usually with a bank) enabling an account holder to write cheques over their account balance for an agreed period of time.  A form of short term finance.

Overhaul - To repair and rebuild or to make repairs and/or adjustments to something.

Overheads-  These are the costs involved in running a business. They consist entirely of expense accounts (eg. rent, insurance, petrol, staff wages etc.)

Overhead absorption - Is used to describe the transfer of the value from an asset which is fixed  such as a machine to the final item being produced.  This is the that indirect costs of a firm can be assigned or attributed to the products/services produced.

Overhead budget Is a budget which shows the expected cost of all production costs other than direct materials and direct labour.

Overhead rate - Calculated by totalling the relevant expenses excluding labour and materials, and dividing this number by the total cost of labour and other materials.

Overtrading - A situation where a business attempts to raise production without increasing the size of its working capital.

Overstated - When something is that is being represented as of greater value than is really true or the items reasonable value.

Overtime- Paid work for working beyond normal working hours.

Overtime ban - A form of industrial action when employees refuse to work longer than their normal working hours

Own brands – Products which have the brand class="d-title" name of their retailer on them.

Owners equity - The interest of the owners in the assets of the business represented by capital contributions and retained earnings.

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Terms Beginning With O

Object code

Object cost


Objective probability

Objectives of financial statements


Objectivity principle




Occupancy cost

Occupational mobility

Occupational immobility



Official interest rate

Official reserves

Off peak

Offset account

Offsetting error

Off-the-job training




On account

On line

On line data base

On line searching

One off

Onerous contract

One stop shopping

One-way communication

On-the-job training

Open account

Open economy

Open book management

Opening cash (or bank) balance

Open item

Open market operations

Open market value (OMV)

Opening balance

Opening entry

Operating activities

Operating allowance

Operating assets

Operating budget

Operating cycle

Operating decisions

Operating expenditures

Operating expenses

Operating income

Operating loss

Operating margin

Operating profit

erating profit to sales ratio

Operating ratio

Operating revenue

Operating risk

Operating system

Operational audit

Operational gearing

Operational decisions

Operational research


Opportunistic behaviour

Opportunity cost

Opportunity cost approach

Optimal currency area

Optimal price

Optimal solution



Ordering costs

Order of performance

Ordinary course of business

Ordinary income

Ordinary share

Organic growth

Organisational structure

Organisation chart

Organisation costs

Organisation theory

Original book of entry

Original entry

Other assets

Other income

Out of pocket


Output gap





Outstanding shares




Overhead absorption

Overhead budget

Overhead rate




Overtime ban

Own brands

Owners equity

Dulwich College Singapore

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