ACCOUNTING The recording, classifying, summarizing and interpreting in a significant manner and in terms of money, transactions and events of a financial character.
ACCOUNTS PAYABLE Trade accounts of businesses representing obligations to pay for goods and services received.
ACCOUNTS RECEIVABLE Trade accounts of businesses representing moneys due for goods sold or services rendered evidenced by notes, statements, invoices or other written evidence of a present obligation.
ACID RATIO Current assets less inventories divided by current liabilities. Also known as “Quick Ratio.”
ACQUISITION The acquiring of supplies or services by the federal government with appropriated funds through purchase or lease.
AFFILIATES Business concerns, organizations, or individuals that control each other or that are controlled by a third party. Control may include shared management or ownership; common use of facilities, equipment, and employees; or family interest. The calculation of a firm’s size includes the employees or receipts of all affiliates. Affiliation with another business concern is based on the power to control, whether exercised or not. Such factors as common ownership, common management and identity of interest (often found in members of the same family), among others, are indicators of affiliation. Power to control exists when a party or parties have 50 percent or more ownership. It may also exist with considerably less than 50 percent ownership by contractual arrangement or when one or more parties own a large share compared to other parties. The affiliated business concerns need not be in the same line of business.
AMORTIZATION Gradual reduction of term debt by periodic payment sufficient to pay current interest and to eliminate the principal at maturity.
ANCILLARY BOND A type of surety bond where the surety company guarantees other factors which are incidental and essential to the performance of a contract.
ANNUAL RECEIPTS Receipts are averaged over a firm’s latest 3 completed fiscal years to determine its average annual receipts. “Receipts” means the firm’s gross or total income, plus cost of goods sold, as defined by or reported on the firm’s Federal Income Tax return. The term does not include, however, net capital gains or losses, nor taxes collected for and remitted to a taxing authority if included in gross or total income. The firm may not deduct income taxes, property taxes, cost of materials or funds paid to subcontractors. Travel, real estate and advertising agents, providers of conference management services, freight forwarders and customs brokers may deduct amounts they collect on behalf of another. If a firm has not been in business for 3 years, the average weekly receipts for the number of weeks the firm has been in business is multiplied by 52 to determine its average annual receipts.
APPRAISED VALUE The value placed on an item, product or business by an appraiser, recognized for experience in a particular field.
ASSETS The entire property of a person, association, corporation, or estate applicable or subject to the payment of debts.
ASSUMPTIONS The act of assuming/undertaking another’s debts or obligations.
AUCTION A public sale of goods to the highest bidder.