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Online Accounting Dictionary
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Debit is the left side of a T account. Debit is also an entry on the left side of an account. Under the double entry bookkeeping system, debits increase assets and expense and decrease liabilities, equity, and income (revenues). Debiting is a verb that means making a debit entry.
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Debtor is an issuer or a seller of a debt security (bond, note). In other words, debtor is a borrower, who owes money to the creditor (i.e. lender). Debtors are private corporations, the federal government, municipalities, etc.
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Deferral refers to recognition of revenues or expenses at some time after cash has been transferred.
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Defined-benefit plans outline the benefits that employees will receive after their retirement. Important to note that opposite to defined-contribution plans, in a defined-benefit plan the “beneficiaries” are employers because they assume investment benefits and risks.
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Defined-contribution pension plans only define the amount of contribution the employer has to make to the plan. In other words, the employer must only contribute a certain amount to the plan each period. The amount of employer’s contribution is based on a formula, which includes such factors as employee’s age, years of service, salary levels, and employer’s revenues.
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Depletion is allocation of the cost of natural resources to expenses in a systematic and rational manner over the resources useful life.
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Depreciation is allocation of the cost of property, plant, and equipment to expenses over their useful (economic) life in a systematic and rational manner.
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Direct labor is the cost of wages for individuals who work on specific products, or in other words, the cost of wages of employees who are directly involved in converting raw materials into finished goods.
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Direct materials are raw materials that become an integral part of the finished goods.
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Direct write-off method of accounting for bad debt is the practice of recording bad debt expense when a particular account is determined to be uncollectible. No allowance for bad accounts is recorded at the end of each period under this method. Receivables write-off is recorded directly in the bad debt expense account in the income statement.
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Discount amortization is the process of converting discounts on notes payable to interest expense over a specified period of time.
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Discount bonds are bonds that have interest included in the face value. When the note matures, the borrow only pays the face value, which includes interest in it.
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Dividend is a corporation's distribution of assets to its owners on a pro rata (proportional) basis.
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Double-declining method applies a constant rate (double of the straight-line rate) to the net book value of the asset and produces a decreasing annual depreciation expense over the asset useful life. The decrease in depreciation relates to the decrease in the asset's net book value in each subsequent period.
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Double-entry bookkeeping rule states that any transaction is recorded at least twice.
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Double-entry recording system provides for the equality of total debits and total credits.
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Duration drivers measure the time required to perform an activity. For example, duration drivers measure the amount of time required to inspect items, to process bills, to process orders, etc. Duration drivers are more accurate measurement of the consumption of resources.
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