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date of record: The date selected by a corporation's board of directors on which the shareholders of record are identified as those who will receive dividends.

debentures (unsecured bonds): Bonds for which no collateral has been pledged.

debit: An entry on the left side of an account.

debt-equity management ratio: A measurement of the relative utilization of debt and equity; computed by dividing average total assets by average stockholders' equity.

debt financing: Acquiring funds by borrowing money from creditors in the form of long-term notes, mortgages, leases, or bonds.

debt securities: Financial instruments issued by a company that carry with them a promise of interest payments and the repayment of principal.

declaration date: The date on which a corporation's board of directors formally decides to pay a dividend to shareholders.

declining-balance depreciation method: An accelerated depreciation method in which an asset's book value is multiplied by a constant depreciation rate (such as double the straight-line percentage, in the case of double-declining-balance.)

deduction: Business expenses or losses that are subtracted from gross income in computing taxable income.

Deferred Income Taxes: An account used to record the difference between income tax expense on the income statement and income taxes payable for the year to federal and state governments.

depletion: The process of cost allocation that assigns the original cost of a natural resource to the periods benefited.

depreciation: The process of cost allocation that assigns the original cost of plant and equipment to the periods benefited.

direct method: A method of reporting net cash flow from operations that shows the major classes of cash receipts and payments for a period of time.

direct write-off method: The recording of actual losses from uncollectible accounts as expenses during the period in which accounts receivable are determined to be uncollectible.

disclaimer of opinion: A disclaimer indicating the auditor was unable to satisfy himself or herself that the overall financial statements were fairly present in accordance with GAAP.

discount: The amount charged by a financial institution when a note receivable is discounted; calculated as maturity value times discount rate times discount period.

discounting a note receivable: The process of the payee's selling notes to financial institution for less than the maturity value.

discount period: The time between the date a note is sold to a financial institution and its maturity date.

discount rate: The interest rate charged by a financial institution for buying a note receivable.

diversified companies: Companies operating in more than one line of business.

dividend payment date: The date on which a corporation pays dividends to its shareholders.

dividend payout ratio: A measure of the percentage of earnings paid out in dividends; computed by dividing cash dividends by the net income available to each class of stock.

dividends: Distributions to owners (stockholders) of a corporation.

dividends account: The account used to reflect periodic distributions of earnings to the owners (stockholders) of a corporation.

dividends in arrears: Missed dividends for past years that preferred stockholders have a right to receive under the cumulative-dividend preference if and when dividends are declared.

double-entry accounting: A system of recording transactions in a way that maintains the equality of the accounting equation.

drawings: Distribution to the owner(s) of a proprietorship or partnership; similar to dividends for a corporation.

drawings account: The account used to reflect periodic withdrawals of earnings by the owner (proprietor) or owners (partners) of a proprietorship or partnership.  

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