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Departmental Accounting

Departmental accounting tracks income, expenses, and profitability separately for individual departments within an organisation. It helps management evaluate performance at a granular level. This approach…

Delivery Notes

Delivery notes are documents issued with goods to confirm shipment and receipt. They include item descriptions, quantities, and delivery dates. In accounting, delivery notes support…

Declining Balance Method

The declining balance method is an accelerated depreciation technique that records higher depreciation expenses in the early years of an asset’s life. It reflects the…

Decision Usefulness

Decision usefulness is a core accounting principle focused on providing financial information that helps users make informed economic decisions. Financial statements should be relevant, reliable,…

Data Integrity

Data integrity refers to the accuracy, completeness, and reliability of financial data throughout its lifecycle. Strong data integrity ensures that information remains unaltered, traceable, and…

Data Reconciliation

Data reconciliation is the process of comparing financial data from multiple sources to identify and resolve discrepancies. It ensures consistency between accounting systems, bank statements,…

Days Inventory Outstanding (DIO)

Days Inventory Outstanding measures how long inventory remains unsold before being converted into revenue. It highlights inventory efficiency and demand forecasting accuracy. Lower DIO reflects…

Days Sales Outstanding (DSO)

Days Sales Outstanding indicates how long a company takes to collect cash after making a sale. It directly impacts cash flow and working capital. Lower…

Days Payable Outstanding (DPO)

Days Payable Outstanding measures the average number of days a business takes to pay its suppliers. It reflects how efficiently a company manages outgoing cash.…

Debentures

Debenture is a type of long-term debt instrument issued by companies to raise capital, typically backed by the issuer’s creditworthiness rather than specific assets. Debentures…

Draft

Draft is a written order from one party (drawer) to another (drawee) to pay a specific sum to a third party. Common in international trade…

Discount on Sales or Purchases

A reduction in the price of goods or services, either as a sales incentive (sales discount) or a reward for early payment (purchase discount). These…

Direct Overhead

Overhead costs that can be directly tied to a production process but not to a specific product unit such as factory rent or machine maintenance.…

Direct Cost

An expense that can be traced directly to a specific product, job, or department like raw materials or direct labor. Unlike indirect costs, direct costs…

Differential Cost

The difference in total cost between two alternatives. Also called incremental cost, it helps in decision-making when comparing options like outsourcing vs. in-house production. Only…

Detailed Audit

An in-depth examination of financial records, internal controls, and transactions. It goes beyond standard audits, often used for investigations, compliance checks, or fraud detection. Detailed…

Depreciation Expense

Depreciation is the periodic allocation of an asset’s cost over its useful life. It appears on the income statement and reduces taxable income. It doesn't…

Depleted Cost

The value reduction of natural resources like minerals, oil, or timber as they are extracted and sold. It’s similar to depreciation but specific to depletable…

Demand Deposit

Funds held in a bank account that can be withdrawn at any time without advance notice typically checking accounts. These are highly liquid and classified…

Deficit Account

An equity account that tracks accumulated losses when a business’s expenses surpass its revenues over time. It reflects negative retained earnings and reduces the overall…

Deficit

Deficit is a situation where expenses exceed income or liabilities exceed assets. It’s commonly used in government or nonprofit accounting but also applies to businesses.…

Deficiency Account

An account used to record the shortfall when liabilities exceed assets, especially in insolvency or liquidation scenarios. It reflects the gap between what’s owed and…

Deferred Payment Sale

A sales agreement where the buyer receives goods now but pays in future installments. The revenue is often recognized at the point of sale, while…

Deferred Liability

Deferred liability is a financial obligation not due until a future date beyond the current accounting period. Examples include pension obligations, long-term leases, or deferred…

Deferred Income Tax

A tax liability or asset that arises due to differences between accounting income and taxable income. These timing differences create temporary gaps, such as depreciation…

Deferred Income

It is also known as unearned revenue, it refers to money received for goods or services not yet delivered. It’s recorded as a liability until…

Deferred Expense

A cost that’s paid in advance but recognized as an expense over time, such as prepaid insurance or rent. It’s initially recorded as an asset…

Deduction

Deduction is an amount subtracted from gross income or taxable income to reduce the tax owed. In payroll, deductions can also refer to amounts withheld…

Double-Entry Accounting

A bookkeeping system where every transaction affects at least two accounts, keeping the accounting equation (Assets = Liabilities + Equity) balanced. One account is debited,…

Depreciation

Depreciation is the gradual reduction in value of a fixed asset over time due to wear and tear or obsolescence. It's recorded as an expense…

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