Glossary – Accounting

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There are 11 names in this directory beginning with the letter D.
Debit balance
A balance on the left side of an account in the general ledger. Typically expenses, losses, and assets have debit balances.

Debit memorandum
A form used at a bank to inform its customer that the customer’s account is being reduced for a fee or other charge.

Debt ratio
The ratio of total liabilities to total assets.

The person that owes money. If a bank lent you money, the bank is the creditor and you are the debtor.

In accounting this means to defer or to delay recognizing certain revenues or expenses on the income statement until a later, more appropriate time. Revenues are deferred to a balance sheet liability account until they are earned in a later period. When the revenues are earned they will be moved from the balance sheet account to revenues on the income statement.
Expenses are deferred to a balance sheet asset account until the expenses are used up, expired, or matched with revenues. At that time they will be moved to an expense on the income statement.

The systematic allocation of the cost of a natural resource from the balance sheet to the income statement.

A liability account in a bank’s general ledger that indicates the amounts owed to bank customers for the balances in the customers’ individual checking, savings, and certificate of deposit accounts.

Direct cost
A cost that can be traced to a cost object. For example, the flour used in baking bread is a direct cost of a bakery’s bread. The wages and salaries of the employees working exclusively in a manufacturer’s maintenance department aredirect costs of the maintenance department.

Direct materials
Raw materials that are a traceable component of a manufactured product. For example, the direct material of a baseball bat is the wood. Flour, sugar, and vegetable oil are direct materials of a company that manufactures dessert products.

A person or organization that gives or donates money, property, services, etc.

The withdrawal of business cash or other assets by the owner for the personal use of the owner. Withdrawals of cash by the owner are recorded with a debit to the owner’s drawing account and a credit to the cash account.