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September 08th 2010.

Financial Glossary

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U  ( 28 DEFINITIONS )

Unadjusted trial balance
An unadjusted trial balance is a trial balance prepared before adjusting journal entries.   top

Unclassified balance sheet
An unclassified balance sheet is a balance sheet that presents a single list of assets and a single list of liabilities with no attempt to divide them into classes.   top

Underapplied overhead
Underapplied overhead is a debit balance in the Manufacturing overhead account that arises when the amount of overhead cost actually incurred is greater than the amount of overhead cost applied to Work in progress during a period.    top

Underlying asset
The underlying asset is the asset upon whose value the value of a contingent claim, such as an option, depends.   top

Underlying assumptions
Underlying assumptions are the basic foundation that underlies generally accepted accounting principles.   top

Underreliance
Underreliance is an obsolete term - it is the result of assessing control risk too high and expanding other audit procedures, performing more audit work when less work would have sufficed.   top

Understandability
Understandability is the concept that accounting information can be interpreted as it was intended by persons who possess reasonable business and economic understanding.    top

Underwriting
Underwriting is the purchase of a new offering of securities by an investment dealer from the issuing firm for future distribution to the public.   top

Unearned revenues
Unearned revenues are liabilities created by advance cash payments from customers for products or services in the future.   top

Uniformity
Uniformity is the use of the same accounting policies in different corporations for similar events/transactions.   top

Unit cost system
Unit cost system is a synonym for the LIFO inventory cost flow assumption under the periodic system.   top

Unit of measurement assumption
The unit of measurement assumption is the assumption that the results of the corporation's operations can be meaningfully reported in terms of a standard monetary unit throughout.   top

Unit-level activities
Unit-level activities are activities that arise as a result of the total volume of production going through a facility, and that are performed each time a unit is produced.   top

Units-of-production method
The units-of-production method is a system to amortize the cost of capital assets in which the allocated cost is based on actual production of the asset versus its total production potential. This method is often used for natural resources.    top

Unlimited liability of partners
The unlimited liability of partners is the legal relationship among general partners of a partnership that makes each general partner responsible for paying all the debts of the partnership if the other partners are unable to pay their shares.   top

Unrealized capital
The unrealized capital refers to the changes to shareholder equity accounts not arising from earnings, the company's dividend payments, or change to contributed capital. It usually comes from a comprehensive revaluation of assets and liabilities.   top

Unremitted earnings
Unremitted earnings are the difference between an investor's share of an investee's net income and the dividends actually received.   top

Unrestricted random sample
An unrestricted random sample is a sample taken by using items in a population that are associated with numbers in a random number table or computer program for selection of a sample; no population stratification is involved.    top

Unsystematic risk
Unsystematic risk is firm-specific risk that is unique to a security and hence can be eliminated by forming diversified portfolios.   top

Unusual items
Unusual items are items that are shown as separate items in the continuing operation section income statement but not net of taxes. Such items are designated as unusual by management and are often infrequent and/or not typical of normal business activities.   top

Upper error limit (UEL)
The upper error limit (UEL) is the largest amount of monetary misstatement that can be calculated using the coefficient for the decision criterion risk of incorrect acceptance.   top

Upstream costs
Upstream costs are those costs associated with processes and costs of suppliers.   top

Upstream profits
Upstream profits are inter-company profits on transactions between an investor company and investee where the investee records the profit.   top

Urgency method
The urgency method is not a long-term viable method of determining capital budgets. This involves "firefighting" techniques of determining capital acquisitions. In other words, when a machine breaks down and absolutely has to be replaced, then it is replaced.   top

Utilitarianism
Utilitarianism is one of a class of approaches to ethical decision making called consequentialism. Utilitarianism says that an action is right if, in a given situation, it leads to greater satisfaction of desires, taking into account all those affected, than does any other available alternative. Utilitarianism evaluates an act by its consequences.    top

Utility
Utility is a subjective measure of value or satisfaction. It measures an individual's relative value of preference for a particular outcome or event in relation to another. In finance, it is usually associated with measuring a decision-maker's preferences regarding monetary gains or losses.   top

Utility function
A utility function is a mathematical device that relates payoff amounts to the decision-maker's utility for those amounts.   top

Utility-maximizers
People are utility-maximizers. They maximize their utility by obtaining the greatest difference in value possible between outcomes to which they attach positive and negative utility. Utility and wealth are not synonymous. People derive positive utility from things other than wealth; leisure time is an example.   top