a b c d e f g h i j l m n o p q r s t u v w y z
Parent: The company that acquires more than 50% voting interest in another company. (p. 467) Participating preferred shares: Preferred shares where holders share ratably with the common shareholders in any profit distributions beyond the prescribed rate (p. 776). Par value: The value that the bond is worth at the date it is to be repaid (A-6, p. 714).� [synonym: face, principle, maturity value] Par value shares: Shares that have a fixed per-share amount printed on each share certificate (p. 766). Past service cost (PSC): The present value of the additional future benefits so granted, which is calculated by the actuary (p. 973). Patents: A right to use, manufacture, and sell a product or process for a period of twenty years from the date of application without influence or infringement by others. (p. 609) Payout ratio: A measure of profitability, which is the ratio of cash dividends to net income (p. 811). PBO: Projected benefit obligation, which is the actuarial present value of the benefits accumulated by employees for services rendered to date (p. 974). Pension plan: An arrangement whereby an employer provides benefits (payments) to employees after they retire for services they provided while they were working (p. 967). Percentage approach: Where compensation costs are recognized based on the percentage of the total service period that has elapsed multiplied by the estimated compensation cost (p. 864). Percentage-of-completion method: A revenue recognition method that recognizes revenue, costs, and gross profit as progress is made towards completion of a long-term contract. (p. 258) Percentage-of receivables approach: The process where receivables are recorded on the balance sheet at their net realizable value. (p. 311) Percentage-of-sales approach: The process where costs are matched with revenue because it relates to the charge in the period in which the sale is recorded. (p. 311) Performance: The process whereby the company earns the revenue and the revenue is measurable. (p. 253) Period costs: Costs, such as selling and administrative, that are not considered directly related to the acquisition or production of goods and, therefore, are not considered a part of inventory. (p. 371) Periodic inventory system: The inventory recording system where a Purchases account is used and the Inventory account is unchanged during the period. At the end of the accounting period, the Inventory account must be adjusted by closing out the beginning inventory amount and recording the ending inventory amount. Cost of goods sold is, therefore, determined by adding the beginning inventory to the net purchases and deducting ending inventory. (p. 76, 363) Periodicity assumption: The accounting assumption that implies that an enterprise�s economic activities can be divided into artificial time periods. (p. 34) Permanent accounts (real accounts): All of the asset, liability and equity accounts that appear on the balance sheet. (p. 57) Permanent difference: A permanent difference between taxable and accounting income (p. 916). Perpetual inventory system: The inventory recording system where purchases and sales are recorded in the Inventory account as they occur. (p. 76, 362) Phase-out period: The period between the measurement date and the disposal date. (p. 124) Plant assets: Tangible capital assets that are acquired for use in operations and not for resale, are long-term in nature, and are usually subject to amortization and possess physical substance. (p. 496) Point of delivery: The point in time where the risks and rewards of ownership pass from the seller to the buyer. (p. 254) Portfolio investments: Securities where there is no significant influence. (p. 462) Possession: When the entity has physical control over the good, but not the legal title to the good. (p. 254) Post-closing trial balance: A trial balance taken immediately after closing entries have been posted: (p. 57, 76) Posting: The process whereby items entered in a general journal must be transferred to the general ledger. (p. 63) Potential common shares: A security or other contract that upon conversion or exercise could dilute earnings per common share (p. 851). Predictive value: A characteristic of accounting information that helps users make predictions about the ultimate outcome of past, present, and future events. (p. 29) Preemptive right: A right to share proportionately in any new issues of share of the same class (p. 764). Preferred dividends in arrears: Accumulated but undeclared dividends on cumulative preferred shares (p. 666). Preferred shares: A special class of shares that have certain preferential rights, such as a prior claim on earnings (p. 765). Premium: If a bond sells at more than face value (pgs. 460, 715). Premiums: Offers, such as silverware, dishes, and small appliances, to customers on a limited or continuing basis for the return of boxtops, certificates, coupons, labels, or wrappers (p.677). Pre-operating costs: Costs incurred by an entity during the pre-operating period of a new facility or business for purposes such as employee training, promotional activities, and the use of material supplies. (p. 624) Pre-operating period: The period prior to when the new business is ready to commence commercial operations. (p. 624) Prepaid expenses: Expenses paid in cash and recorded as assets before they are used or consumed. (p. 66) Present value: The amount that must be invested now to produce a known future value (A-9). Present value of an annuity: The single amount that, if invested now at compound interest, would provide for a series of withdrawals of a certain amount per period for a specified number of future periods (A-16). Present value of bond issue: The discount value of the bond principal and interest payments at a point in time (p. 715). Price earnings (P/E) ratio: An oft-quoted statistic used by analysts in discussing the investment possibility of an enterprise, calculated by dividing the share�s market price by its earnings per share (p. 811). Price risk: The risk that an instrument�s price or value will change (p. 869). Primary instrument: Traditional assets and liabilities, such as accounts receivable and payable, which are recognized in the financial statements (p. 868). Principal: The amount lent or borrowed (A-3, A-16). (pg. 458) Principal value: The value that the bond is worth at the date it is to be repaid (p. 714).� [synonym: face, par, maturity value] Principles of accounting: The four basic principles that are used to record transactions are historical cost, revenue recognition, materiality, and full disclosure. (p. 34) Product costs: Those costs that "attach" to the inventory and are recorded in the Inventory account. (p. 371) Professional judgement: Professional accountants with significant education and experience who will be able to apply the Handbook�s "general principles" appropriately as they see fit. This is important in Canada because Canadian standards are based primarily on general principles rather than specific rules, because the basic philosophy of Canadian accounting is that there cannot be a rule for every situation. (p. 13) Profitability ratios: Ratios that measure the degree of success or failure of a given enterprise or division for a given period of time. (p. 188) Profit margin ratio: A ratio that indicates how much is left over from each sales dollar after all expenses are covered. (p. 573) Project financing arrangement: When two or more entities form a new entity to construct an operating plant that will be used by both parties; the new entity borrows funds to construct the project and repays the debt from the proceeds received from the project; and the payment of the debt is guaranteed by the companies that formed the new entity.� The benefit of the arrangement is that the companies that formed the new entity do not have to report the liability on their books (p. 730). Projected benefit obligation: A measure of the pension obligation where the calculation of the deferred compensation amount is based on both vested and nonvested service using future salaries (p. 970). Promissory note: A written promise that supports a note receivable to pay a certain sum of money at a specified future date. (p. 314) Property dividends: Dividends payable in corporation assets, other than cash (p. 800). Property, plant and equipment/capital assets: Properties of a durable nature used in regular business operations to generate income. (p. 168, 496) Prospective treatment: Where previously reported results remain and the new policy is adopted for the current and future periods only (p. 1082). Provincial securities commission: The group that oversees and monitors the provincial capital market places. They ensure that the participants in the capital markets adhere to securities law/legislation, ensuring that the marketplace is fair. (p. 10) Prudent cost: Where if one was ignorant about a certain price and paid too much for an asset originally, the historical cost of the asset may be written down and a loss recognized. (p. 512) Purchase commitments: When a company agrees to buy inventory weeks, months, or even years in advance. (p. 418) Purchase discounts: A reduction in the price of inventory in order to induce prompt payment. (p. 370) Purchase equation: A calculation used to determine the excess of the purchase price over the company� book value. (p. 465) Put option: Where the option holder has the right but not the obligation to sell shares at a preset price (p. 872). |