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September 08th 2010.

Financial Glossary

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G  ( 25 DEFINITIONS )

Gains trading
Gains trading is the process of selling securities in a portfolio that have increased in value while holding those securities that have lost value. The purpose being to book the gains from those securities that have increased in value, while maintaining on the books at cost those that have fallen based on holding those securities to maturity.    top

Game theory
Game theory attempts to model and predict the outcome of conflict between rational individuals.    top

General and administrative expenses
General and administrative expenses are expenses that support the overall operations of a business and include the expenses of such activities as providing accounting services, human resources management, and financial management.    top

General anti-avoidance rule (GAAR)
The general anti-avoidance rule (GAAR) stipulates that when a person is involved in an "avoidance transaction" taxes will be adjusted to deny the benefit that would have resulted from the transaction(s). GAAR applies when there is a misuse or abuse of the provisions of the ITA.   top

General journal
A general journal is a journal with a flexible format in which any transaction can be recorded.   top

General ledger
The general ledger is the ledger holding individual accounts that comprise the elements of the financial statements.    top

General partner
A general partner is a partner who assumes unlimited liability for the debts of the partnership. The general partners in a limited partnership are usually responsible for its management.   top

General purpose financial statements
General purpose financial statements are financial statements prepared to meet common information needs of external parties for financial information about an entity.   top

Generalized audit software (GAS)
Generalized audit software (GAS) is a set of software functions that may be utilized to read, compute, and operate on machine-readable records.   top

Generally accepted accounting principles (GAAP)
Generally accepted accounting principles (GAAP) is the body of accounting practices built up over time for use in preparing external accounting reports, sources of GAAP including the CICA Handbook, industry practice, and professional judgments.   top

Generally accepted auditing standards (GAAS)
Generally accepted auditing standards (GAAS) are the rules adopted by the accounting profession as guides for conducting audits of financial statements.    top

Goal congruence
Goal congruence exits where the goals of management and the goals of the investors in the firm are aligned. It is useful to align the goals of management and the goals of the investors in the firm, but you need to remember that each party will maintain their own self-interests in the situation.   top

Going-concern assumption
The going-concern assumption is also known as the continuity assumption. It is the assumption that the corporation will not be liquidated but will continue to pursue its objectives for the foreseeable future.   top

Goodwill
Goodwill is an internally generated intangible asset that is not usually recognized because no transaction has occurred to establish cost. Goodwill is recognized on consolidation when a subsidiary is purchased for a price higher than the fair value of its tangible assets.   top

Government auditors
Government auditors are auditors whose work is governed by the GAO audit standards, whether they are audit employees of governments or public accounting firms engaged to perform government audits.   top

Grade
Grade relates to the differences in degree, worth, or ranking between products or services that have the same functional use. For example, a Volkswagen and a Mercedes have different grades. The higher the grade, the higher the expected quality.   top

Grant date
The grant date is the date on which options are issued to investors.    top

Gross basis of recording leases
The gross basis of recording leases on the lessor or lessee books is when the lease receivable (payable) is recorded at gross value including interest and principal portions. The unearned interest portion is offset against the receivable for reporting purposes. This method is common for lessors.   top

Gross margin
Gross margin is the difference between net sales and the cost of goods sold.   top

Gross margin method
The gross margin method is a method of estimating inventories based on historical gross profit margins.   top

Gross negligence
Gross negligence is the lack of even minimum care in performing professional duties, indicating reckless disregard for duty and responsibility.    top

Gross profit
Gross profit is the difference between net sales and the cost of goods sold.   top

Group amortization
Group amortization is the amortization of a set of similar assets based on average rates designed to be statistically valid.   top

GST
GST, also known as the Goods and Services Tax, is a federal tax on the consumer on almost all goods and services.   top

Guaranteed residual value
A guaranteed residual value in a lease is the amount that the lessee agrees to that is equal to what the lessor can get for the asset by selling it to a third party at the end of the lease term. This is part of the minimum lease payments.   top