Glossary of Accounting Terms

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Index of Accounting Terms - D

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Days Sales Outstanding (DSO) icon representing efficiency of collecting receivables
Days Sales Outstanding (DSO) Related Terms: Accounts Receivable Turnover, Average Collection Period, Cash Conversion Cycle (CCC), Credit Policy, Invoice Management, DSO Calculation Formula, Improving DSO, Accounts Receivable Management, financial liquidity analysis What is Days Sales Outstanding (DSO)? A financial ratio that measures the average number of days it takes for a company to collect payment from its customers after a sale has been made. A lower DSO indicates that a company collects its accounts receivable quickly, improving cash flow.
Icon representing debits on the left and credits on the right
Debits and Credits Related Terms: Double-Entry Bookkeeping What are Debits and Credits? The fundamental components of double-entry bookkeeping, where debits increase asset and expense accounts and decrease liability, equity, and revenue accounts, with credits having the opposite effect.
Icon representing financial obligation or borrowed money
Debt Related Terms: Liability, Loan, Notes Payable, Credit What is Debt? An amount of money borrowed by one party from another, often with interest, creating an obligation for repayment.
Icon representing the proportion of debt to assets
Debt Ratio Related Terms: Leverage Ratio, Debt-to-Asset Ratio What is Debt Ratio? The debt ratio is a financial ratio that indicates the proportion of a company's assets that are financed by debt.
Icon representing the relationship between debt and equity
Debt to Equity Ratio (D/E) Related Terms: Leverage, Gearing Ratio What is Debt to Equity Ratio? The debt to equity (D/E) ratio compares a company's total liabilities to its shareholders' equity, measuring its financial leverage.
Icon representing expenses paid in advance
Deferred Expense Related Terms: Prepaid Expense, Accrual Accounting, Matching Principle What is a Deferred Expense? Costs paid in advance for goods/services not yet consumed; initially an asset, then expensed over time.
Icon representing revenue received but not yet earned
Deferred Revenue Related Terms: Unearned Revenue, Accrual Accounting, Liability What is Deferred Revenue? Payments received for services/goods not yet delivered; a liability until earned.
Icon representing the decrease in asset value
Depreciation Related Terms: Wear and Tear, Expense Allocation, Asset Write-Down What is Depreciation? The systematic allocation of the cost of a tangible asset over its useful life.
Direct Costs icon representing expenses directly tied to production
Direct Costs Related Terms: Cost of Goods Sold (COGS), Direct Materials, Direct Labor, Variable Costs, Indirect Costs, Product Costing, Job Order Costing, Manufacturing Costs, how to calculate direct costs for a product, direct vs indirect expenses What is Direct Costs? Expenses that can be directly traced to the production of a specific good or service. These typically include direct materials (raw materials used in the product) and direct labor (wages for workers directly involved in production). Understanding direct costs is crucial for accurate product costing and pricing strategies.
Icon representing the distribution of company profits
Dividend Related Terms: Payout, Distribution to Shareholders What is a Dividend? A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Icon representing the dual impact of transactions in double entry bookkeeping.
Double Entry Bookkeeping Related Terms: Debits and Credits, Accounting Equation, Bookkeeping System What is Double Entry Bookkeeping? A fundamental accounting principle stating that every financial transaction has equal and opposite effects in at least two different accounts; recorded with debits and credits.

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