247 Fun Facts About Accounting

Which Franciscan friar published the first printed description of double-entry bookkeeping in 1494?

Luca Pacioli, a Franciscan friar, printed the first description of double-entry bookkeeping in his 1494 Summa de arithmetica, written in Italian so merchants could read it.

Which Renaissance artist drew the illustrations for the 1509 mathematics book Divina proportione?

Leonardo da Vinci drew its geometric solids while living with the book's author, a friar who gave him mathematics lessons; the two fled Milan together when the French seized the city in 1499.

The oldest surviving complete double-entry books are the 1340 treasury accounts of which Italian port city?

Genoa: its treasurers' accounts for 1340 set debits against credits and carry balances forward from the year before, which is why historians accept them as a full double-entry system.

Accounting records more than 7,000 years old have been found in which ancient region?

Mesopotamia: its temple storehouses listed goods received and traded, and one widely cited theory holds that this kind of counting and record-keeping is what grew into writing.

The word 'auditor' comes from the Latin audire, meaning what?

Audire means to hear: early audits were literally heard, with the accounts read aloud to the person checking them.

The words debit and credit come from the Latin debere and credere, meaning what?

To owe and to entrust: in Latin a debitum was something owed and a creditum was a loan, a thing entrusted to someone else, which is why lending money is still called giving credit.

The fundamental accounting equation states that assets equal liabilities plus what?

Equity: assets equal liabilities plus owners' equity, and because every transaction is entered twice, once as a debit and once as a credit, the two sides stay equal however many entries are made.

Which financial statement is also known as the profit and loss account, or P&L?

The income statement, or P&L, covers a whole period, not a single date, which is why its heading reads 'for the year ended' where a balance sheet names one day.

The cash flow statement is divided into operating, financing and which third category of activities?

Investing activities cover buying and selling long-term assets such as machinery; under US rules, the interest a company pays on its debt counts as an operating cash flow, not a financing one.

Which type of asset generally cannot be depreciated for tax purposes?

Bare land: land does not wear out, become obsolete or get used up, so the tax rules allow no depreciation on it, although a building standing on it can be written off.

Which depreciation method charges the same amount in every year of an asset's life?

Straight-line is the most widely used depreciation method because it is the easiest to calculate: an asset's cost, less what it can be sold for at the end, is simply spread evenly across the years.

Which inventory costing method is allowed under US GAAP but explicitly prohibited under IFRS?

LIFO: last-in, first-out lowers taxable profit when prices are rising, which is why many US companies took it up from the 1970s, while international standards ban it outright.

The body that sets US GAAP for public companies, the FASB, is based in which Connecticut city?

Norwalk gave its name to the Norwalk Agreement of 2002, signed in the city, in which the FASB and its international counterpart pledged to make their two rulebooks compatible.

Which economy made IFRS mandatory for its listed companies from 2005?

The EU: a 2002 regulation made its listed companies draw up their group accounts under IFRS from 2005, so that results could be compared from one member state to the next.

The world's first professional body of accountants received its royal charter in 1854 in which country?

Scotland: the royal charter granted to Edinburgh's Society of Accountants in 1854 is where the title 'chartered accountant' comes from, and its members were the first to use it.

The first law creating the Certified Public Accountant credential was passed in 1896 in which US state?

New York passed the law in April 1896, letting the state's Regents award the new title to accountants who proved themselves either by examination or by their past experience.

Which branch of accounting takes its name from the Latin for 'of the forum'?

Forensic accounting: Roman trials were held in the public forum, so 'forensic' came to describe anything fit for a court of law, such as the financial evidence these accountants prepare.

William Welch Deloitte became the first independent auditor of which public company, in 1849?

The Great Western Railway made Deloitte's name: he had opened his own London office only four years earlier, and the practice grew into the worldwide firm that still carries his name.

The letters in KPMG stand for Klynveld, Peat, Marwick and which fourth surname?

Goerdeler: Reinhard Goerdeler, the German chairman who helped build the firm, had been imprisoned by the Nazis as a young man after his father Carl joined the 1944 plot against Hitler.

Which firm merged with Price Waterhouse in 1998?

Coopers & Lybrand: its 1998 merger with Price Waterhouse created PricewaterhouseCoopers and turned the Big Six accounting firms into the Big Five.

What is an auditor's opinion called when the financial statements are found fairly presented?

Unqualified opinion: despite how it sounds, this is the best verdict a company can get, because it means the auditor has no reservations to add; accountants nickname it the clean opinion.

Enron traders were taped gloating about overcharging 'Grandma Millie' during which state's power crisis?

California: tapes released in 2004 caught Enron traders joking about 'Grandma Millie' as they gamed the state's 2000-01 electricity crisis with schemes nicknamed Death Star and Fat Boy.

Which Enron vice president warned Kenneth Lay in 2001 the company might 'implode in a wave of accounting scandals'?

Sherron Watkins sent her warning anonymously the day after CEO Jeffrey Skilling's exit was announced, and it stayed inside Enron: the public first read the memo five months later.

WorldCom inflated its earnings by billions mainly through what accounting trick?

Capitalising line costs: WorldCom booked routine network lease fees as capital assets; internal auditor Cynthia Cooper found the entries in June 2002, the overstatement topped $11 billion, and CEO Bernard Ebbers got 25 years.

The Sarbanes-Oxley Act of 2002 created which new body to oversee the auditors of public companies?

The PCAOB put outside inspectors over the auditors of US public companies for the first time; until 2002 the profession had policed itself through its own trade body.

Which section of Sarbanes-Oxley requires management to report on internal controls over financial reporting?

404: this section is the part of the act whose costs are most argued over, because outside auditors must also report on the controls; Section 302 makes the CEO and CFO personally certify the accounts.

How many active accountants worked at the firm that audited Bernie Madoff's $65 billion fund?

1: David Friehling was the only active accountant at Friehling & Horowitz, a tiny firm in suburban Rockland County, and he later pleaded guilty to filing false audit reports for Madoff.

Al Capone was finally sent to prison in 1931 for what offence?

Income tax evasion earned Capone 11 years: the Supreme Court had ruled in 1927 that illegal income is still taxable, which gave prosecutors a charge they could prove against him.

The office of Commissioner of Internal Revenue was created in 1862 under which president?

Abraham Lincoln signed the Revenue Act of 1862, which created the office to collect the nation's first income tax, a temporary levy to help pay for the Civil War.

Before it moved to April 15 in 1955, the US income tax filing deadline fell in the middle of which month?

March: returns were due on March 15, the Ides of March, from 1918 until the deadline moved to April 15 in 1955, giving taxpayers an extra month to file.

The US federal government's fiscal year begins on the first day of which month?

October: until 1976 the federal fiscal year began on July 1, and Congress moved the start later in the year to give itself more time to settle the budget.

William the Conqueror's great survey of England for tax purposes, completed in 1086, is known as what?

The Domesday Book earned its name, a royal treasurer wrote about a century later, because its findings could no more be appealed than the verdicts of the Last Judgement.

What name is given to the traditional Japanese abacus?

Soroban: Japan adapted it from the Chinese suanpan, trimming each rod to one bead above the bar and four below, and practised users can picture its beads to do sums in their heads.

The first spreadsheet program for personal computers, released for the Apple II in 1979, was called what?

VisiCalc: Dan Bricklin thought of it while watching a Harvard Business School professor erase and rewrite a blackboard model after a single change, and realised a computer could redo the sums instantly.

Which spreadsheet, launched for the IBM PC in 1983, quickly wiped out its Apple II predecessor?

Lotus 1-2-3 combined spreadsheet, charting and database functions and exploited the IBM PC's memory; Lotus bought the older program's maker, Software Arts, in 1985 and discontinued it.

Which comedian worked as an accountant for United States Gypsum before his stand-up career took off?

Bob Newhart said he was never cut out for it: when petty cash didn't balance he made up the difference from his own pocket, and his motto was 'That's close enough'.

Which best-selling legal thriller writer earned an accounting degree from Mississippi State in 1977 before law school?

John Grisham took the accounting degree planning to become a tax lawyer, but at law school the 'complexity and lunacy' of tax law put him off and he switched to trial work.

Which rock frontman was studying finance at the London School of Economics when he left in 1963 for music?

Mick Jagger studied finance and accounting there on a government grant and had seriously considered journalism or politics; he kept up his course while the Stones took shape, leaving only in autumn 1963.

Which Chinese dynasty introduced the paper drafts nicknamed 'flying cash'?

Tang: feiqian, or 'flying cash', let merchants deposit coins in the capital and redeem a paper certificate in the provinces, sparing them the risk of hauling heavy strings of coins; Song paper money grew out of it.

Before the mergers of 1989, the firms that dominated the audit market were known as the Big what?

Eight: mergers turned the Big Eight into the Big Six in 1989 and the Big Five in 1998, and the collapse of Arthur Andersen in 2002 cut them to the Big Four.

In 2011 the Big Four were reported to audit what share of FTSE 100 companies in the UK?

99%: the four firms also audited 96% of the mid-cap FTSE 250 that year, a grip on the market that has led critics to call for the Big Four to be broken up.

In 1834, burning the Exchequer's old wooden tally sticks accidentally destroyed which London landmark?

The Palace of Westminster: two cartloads of tally sticks, the notched wooden receipts of medieval bookkeeping, were fed into the furnaces under the House of Lords, and the overheated flues set Parliament alight.

Deloitte's first overseas branch, opened in 1890, was located where?

Wall Street: Deloitte's first overseas branch opened in New York in 1890 under Edward Adams and P.D. Griffiths; Chicago and Buenos Aires offices followed.

Which two men formed the New York firm that merged with Deloitte in 1952?

Haskins and Sells: Charles Waldo Haskins and Elijah Watt Sells met on a government commission, and theirs was the first major US audit firm founded by Americans, not by British accountants.

Nobuzo Tohmatsu's Japanese firm, founded in 1968, joined which accounting network in 1975?

Touche Ross: the Tokyo firm that Tohmatsu, a former Japanese navy admiral, set up in 1968 joined its network in 1975, which is why his name survives in Deloitte Touche Tohmatsu.

Which strategy consultancy, founded by Michael Porter, did Deloitte buy out of bankruptcy in 2013?

Monitor Group was co-founded in 1983 by Michael Porter, Harvard's authority on competitive strategy, yet its US arm filed for bankruptcy in November 2012; Deloitte completed the purchase two months later.

Which of Jesus's twelve apostles is honoured as the patron saint of accountants?

Matthew: he was a tax collector, a trade so hated by his fellow Jews that the Pharisees were shocked when Jesus called him from his tax booth and then dined at his house.

What is the selling of a company's receivables to a third party at a discount called?

Factoring: a business sells its unpaid invoices to a factor for immediate cash, and it is usually the factor, not the seller, who then bills the customers and collects the money.

Peat Marwick merged in 1987 with which European accounting grouping?

KMG: Dutch, German and Anglo-American practices formed the grouping in 1979 to give Europe an international firm of its own, and its merger with Peat Marwick followed.

The Inca kept their tax and census records without writing, on knotted cords known as what?

Quipu: knots tied along coloured cords stored numbers in a decimal system, and trained record-keepers used them to track what each community owed in tax and how many people it held.

Piet Klijnveld and Jaap Kraayenhof opened their accounting firm in 1917 in which city?

Amsterdam: Piet Klijnveld and Jaap Kraayenhof opened Klynveld Kraayenhof & Co. there in 1917, the firm that supplied the 'K' in KPMG.

From 1984, Peat Marwick was the first big corporate customer of which computer?

Apple Macintosh: Peat Marwick bought Macs in bulk from 1984, the year the machine launched, and for a time was its only large corporate customer.

KPMG Canada sponsored which skier, who won Canada's first Olympic gold on home soil in 2010?

Alexandre Bilodeau won the moguls at Vancouver 2010, defended the title in 2014, then retired to pursue a career in accounting; his father is a tax partner at KPMG in Montreal.

KPMG was criticised for auditing which three US regional banks that collapsed in 2023?

Signature, First Republic and SVB were all KPMG audit clients when they failed in 2023, and a US Senate subcommittee report later faulted the firm's work, findings KPMG rejects.

Which actor played Itzhak Stern, Oskar Schindler's accountant, in the 1993 film Schindler's List?

Ben Kingsley played Stern, but the screen character is a composite: the film folds a factory manager and the camp commandant's secretary into the real accountant.

In business slang, a company that is running at a loss is said to be 'in the' what?

Red: bookkeepers once wrote losses and debts in red ink and healthy balances in black, which is also why a firm that is making money is said to be 'in the black'.

Arthur Young, whose Chicago firm became half of EY, was an accountant of what nationality?

Scottish: Arthur Young studied law at the University of Glasgow, where he captained the rugby team, then emigrated in 1890 and turned to accounting in Chicago.

EY's 1989 founding merger combined Arthur Young & Co. with which firm?

Ernst & Whinney, itself the 1979 product of Ernst & Ernst and Britain's Whinney Murray, merged with Arthur Young in 1989 to create Ernst & Young.

Which American statesman wrote in 1789 that nothing is certain except death and taxes?

Benjamin Franklin wrote the line in a letter about the new US Constitution, but he did not coin it: an English stage comedy of 1716 had already paired death and taxes as life's only sure things.

In Ghostbusters (1984), which actor played Louis Tully, the accountant who ends up possessed by a demon?

Rick Moranis shaped the part himself: making Louis an accountant was his idea, and he ad-libbed the long speech the character gives at his own party.

In double-entry bookkeeping, debits are recorded on which side of an account?

The left: debits always go on the left and credits on the right, whatever the account, which is why a debit adds to an asset such as cash but shrinks a liability such as a loan.

Since the 1930s, PwC and its forerunner have counted the secret ballots for which annual awards?

The Academy Awards: the firm's long record slipped in 2017, when its staff handed the presenters a spare Best Actress envelope and La La Land was announced as Best Picture instead of Moonlight.

In The Shawshank Redemption, banker Andy Dufresne first wins the guards' favour by solving what for their captain?

A tax bill: Andy overhears the guard captain grumbling about tax on an inheritance and offers to shelter the money legally, the first step towards keeping the warden's crooked books.

In 2002, PwC's consulting arm was briefly rebranded with the name of which day of the week?

Monday: its chief executive called the name 'a real word, concise, recognizable, global', but it lasted only weeks, because that summer PwC sold the consulting business to IBM for about $3.5 billion.

Which Italian mathematician's 1202 book Liber Abaci showed Europe's merchants how to reckon with Hindu-Arabic numerals?

Fibonacci learned the numerals as a boy in the North African port of Bugia, where his father was a customs official for Pisa's merchants, and his book applied them to prices, profits and currency exchange.

Arthur E. Andersen, founder of the ill-fated firm, was born in 1885 in which state?

Illinois: Andersen was born in Plano, Illinois, in 1885, was orphaned at 16, and worked as a mail boy by day while studying at night.

What completes the motto Arthur Andersen gave his accounting firm: 'Think straight, ...'?

Talk straight: Andersen had the axiom from his mother, and by the firm's own legend he told a client there was 'not enough money in the city of Chicago' to make him approve flawed accounts.

One of Arthur Andersen's first clients in 1913 was a Milwaukee company in which industry?

Brewing: Andersen had been controller of the Schlitz brewery in Milwaukee before he set up his firm, and in 1915 he opened its second office in the city.

What did Andersen staff call themselves, a nod to their deliberately uniform look?

Arthur Androids: the nickname mocked the firm's insistence on a uniform look and method, so that the same service was delivered the same way in every office.

Andersen partner Carl Bass was removed from the Enron account after doing what?

Challenging its accounting: Bass sat on Andersen's professional standards group, and Enron asked for him to be taken off its account; he later confronted lead partner David Duncan for ignoring his advice.

Which court unanimously overturned Arthur Andersen's Enron shredding conviction in 2005?

The US Supreme Court found the jury had been allowed to convict without proof that Andersen knew it was doing wrong, but the firm had already surrendered its licences and all but closed.

The consulting giant Accenture was named in 2001 after a contraction of which phrase?

Accent on the future: Kim Petersen, a Danish employee in the Oslo office, submitted the invented word, hoping a name that meant nothing would offend nobody in any country.

To split from Arthur Andersen in 2000, Andersen Consulting had to give up what?

Its name: the arbitrator set the consultants free without the Andersen name but spared them the $14.5 billion separation fee Arthur Andersen had sought, and its chief resigned the day the ruling came out.

Arthur Andersen's 1950s feasibility study for General Electric led to which landmark in American computing?

First commercial computer use: on the advice of Andersen's Joseph Glickauf, GE installed a UNIVAC I in Louisville in 1954 to run payroll, when computers had served only census and military sites.

Which accounting network grew from the Chicago firm a 26-year-old Ernst & Ernst accountant founded in 1924?

Grant Thornton: Alexander Grant left Ernst & Ernst to serve mid-sized companies, and his firm took its present name in 1986 after allying with Britain's Thornton Baker.

BDO's name comes from founding firms Binder of Britain, Dijker of the Netherlands and Otte of which country?

Germany: the European firms teamed up with American and Canadian partners in 1963 as the Binder Seidman International Group, and adopted the shorter name BDO ten years later.

The BDO accounting network is headquartered in Zaventem, near which capital city?

Brussels: Zaventem, home to Brussels Airport, houses only BDO's coordinating company, because every national member firm remains a legally independent business.

Enron was formed in 1985 when Kenneth Lay merged Houston Natural Gas with which company?

InterNorth, the much larger Omaha company, was the buyer and the merged group was to be based in Nebraska, yet within a year Lay was its chairman and it had moved to Houston as Enron.

Which rival Houston company offered to buy Enron at a knock-down price before its 2001 collapse?

Dynegy agreed on 9 November 2001 to buy its stricken rival, walked away less than three weeks later as the disclosures mounted, and Enron filed for Chapter 11 within days.

Which magazine named Enron 'America's Most Innovative Company' six years running before the 2001 collapse?

Fortune also ranked Enron seventh among the 500 biggest American companies in 2000; by the end of November 2001 its shares had fallen from $90.75 to under a dollar.

Enron CFO Andrew Fastow named his LJM partnerships after whom?

His wife and two sons: LJM stood for Lea, Jeffrey and Matthew Fastow; the partnerships let Fastow pocket tens of millions while buying assets from Enron to hide its losses.

Which Enron executive was sentenced to more than 24 years in prison in 2006?

Jeffrey Skilling, chief executive for six months of 2001, had the term cut to 14 years in a 2013 deal that ended his appeals, and he left custody in 2019 after serving about 12.

Kenneth Lay died in July 2006 while on holiday near which Colorado town?

Aspen: Lay died of a heart attack on July 5, 2006 at a rented house near Aspen, three months before sentencing, so his conviction was vacated.

Which 2005 Enron documentary shares its title with a 2003 book by McLean and Elkind?

The Smartest Guys in the Room: Bethany McLean had asked in print in March 2001 how Enron actually made its money, nine months before the bankruptcy, and Alex Gibney's film earned an Oscar nomination.

Which long-distance carrier did WorldCom take over in a $37 billion merger announced in 1997?

MCI: the merger made WorldCom the second-largest long-distance company in the United States, and in 2002 its own internal auditors found $3.8 billion of false entries.

WorldCom chief Bernard Ebbers, known for his boots and jeans, was given which nickname by the press?

The Telecom Cowboy: Ebbers wore boots and blue jeans instead of a suit and lived on a farm; he had run a chain of motels before backing a long-distance phone reseller in 1983.

WorldCom's Bernard Ebbers built his empire in Mississippi but was born in which country?

Canada: born in Edmonton, Alberta, Ebbers went south on a basketball scholarship to Mississippi College and made the state his home.

Which $6,000 bathroom item came to symbolise Tyco chief Dennis Kozlowski's excess?

A shower curtain hung in the Manhattan apartment Tyco paid for; the company also met half the $2 million bill for his wife's birthday party in Sardinia, and in 2005 he was convicted over $81 million in unauthorised bonuses.

HealthSouth, whose executives inflated its earnings by billions of dollars, was based in which Southern city?

Birmingham, Alabama: a jury there acquitted founder Richard Scrushy of all 36 fraud charges in 2005, but a year later he was convicted in a separate bribery case.

Adelphia's founders bought their first cable franchise in 1952 for how much?

$300: the Coudersport, Pennsylvania franchise grew into one of America's biggest cable companies, which went bankrupt in 2002; founder John Rigas and his son Timothy were jailed for fraud.

After Adelphia's bankruptcy, its cable systems were sold in 2006 to Time Warner Cable and which rival?

Comcast and Time Warner Cable paid $17.6 billion for the systems; founder John Rigas, sentenced to 15 years for fraud in 2005, was released on health grounds in 2016.

Which American trash hauler restated $1.7 billion of earnings in 1998 after executives spent five years understating expenses?

Waste Management's books unravelled when a new chief executive ordered a review of its accounts; shareholders lost more than $6 billion as the share price fell.

Which American tech giant wrote off $8.8 billion a year after buying the British software firm Autonomy in 2011?

HP blamed 'serious accounting improprieties'; a London judge ruled in 2022 that it had substantially won its civil case, yet a US jury cleared Autonomy founder Mike Lynch of fraud in 2024.

Parmalat's 2003 collapse exposed a forged letter claiming €3.9bn was held at which bank?

Bank of America: a forged document claimed its Cayman subsidiary Bonlat held about €3.9 billion there; the bank denied it in December 2003 and the group collapsed within days.

Parmalat, the Italian food giant that collapsed in 2003, was best known for what?

Long-life milk: Calisto Tanzi was 22 when he opened a small pasteurisation plant near Parma in 1961, and his UHT milk, which keeps for months without a fridge, became the firm's signature product.

Which Indian IT firm's chairman confessed in 2009 to inventing about $1 billion of cash on its books?

Satyam: Ramalinga Raju's resignation letter said that inflating the profits had been 'like riding a tiger, not knowing how to get off without being eaten'.

Wirecard claimed its missing €1.9 billion sat in accounts at two banks in which country?

Philippines: both banks said they had never held the money, Wirecard conceded it probably did not exist, and the company filed for insolvency on 25 June 2020, a week after admitting the hole.

Which Big Four firm was Wirecard's long-time auditor?

Ernst & Young audited Wirecard for more than a decade and refused to sign off only in June 2020; the financial watchdog BaFin was also accused of failing to spot the fraud.

Wirecard's fugitive COO Jan Marsalek is suspected of spying for which country?

Russia: German and British investigators linked Marsalek to Russian intelligence, and a 2024 London trial of a Bulgarian spy ring named him as its handler; he is thought to have fled to Moscow in 2020.

Which Japanese term describes the loss-hiding scheme at the heart of the 2011 Olympus scandal?

Tobashi ('flying away'): Olympus moved old investment losses off its books into outside funds, then made them disappear behind inflated fees on company takeovers.

Michael Woodford, sacked as Olympus chief in 2011 after querying its fees, came from which country?

Britain: Woodford, a long-serving company man, was the first foreigner to run Olympus, and was sacked within months of taking charge after he queried a $687 million advisers' fee on a single takeover.

Lehman Brothers' 'Repo 105' manoeuvre classified short-term repurchase agreements as what?

Sales: by booking the short-term repos as sales, not borrowing, Lehman made the assets vanish from its books for a few days around each quarterly report, then bought them back.

Lehman's Repo 105 deals raised cash just before each quarter-end, which the bank then used to do what?

Pay down debt: with fewer liabilities for a few days, Lehman's leverage looked lower in its published accounts; afterwards it borrowed again and repurchased the assets.

Bre-X's fraudulent gold find was at Busang, in which country?

Indonesia: the Busang site lay in East Kalimantan on Borneo; core samples had been salted with gold, and the 1997 collapse wiped out about C$6 billion of market value.

David Walsh named Bre-X's parent company Bresea by blending what?

Founder's sons' names: Walsh ran Brett and Sean together to make Bresea, then set up Bre-X as its subsidiary in 1989, four years before it bought the jungle property that made both notorious.

Polly Peck's Asil Nadir fled Britain in 1993 for where, before returning 17 years later to face trial?

Northern Cyprus: Nadir, a Turkish Cypriot, skipped bail and lived there beyond the reach of extradition, since it has no treaty with Britain; he was jailed for 10 years in 2012 for stealing £29 million from Polly Peck.

Which British bank collapsed in 1995 after trader Nick Leeson's hidden losses reached £827 million?

Barings, Britain's oldest merchant bank, had helped finance the Louisiana Purchase; Leeson's bets lost twice its trading capital, and the Dutch group ING bought what was left for £1.

Rogue trader Nick Leeson was sentenced to six and a half years in which prison?

Changi: Leeson was arrested in Frankfurt and extradited to Singapore to serve his time; he was freed early, in July 1999, after being treated in custody for colon cancer.

What two-word note did Nick Leeson leave before fleeing Singapore on 23 February 1995?

'I'm sorry': Leeson ran with his wife, first to Borneo and then to Frankfurt, where he was arrested; the bank he had broken was declared insolvent within days of his flight.

Robert Maxwell was found to have embezzled hundreds of millions of pounds from what?

His companies' pension funds: after Maxwell's body was found floating off the Canary Islands in 1991, it emerged he had raided the Mirror Group scheme and others to prop up his companies' share prices.

Which British construction giant collapsed in January 2018 owing almost £7 billion, drawing MPs' fury at its auditors?

Carillion went into compulsory liquidation, the most drastic form of insolvency; MPs accused KPMG of 'complicity' in signing off its 'increasingly fantastical figures'.

The BCCI bank, shut down in 1991, was founded in 1972 by a financier from which country?

Pakistan: Agha Hasan Abedi, a Pakistani banker, registered BCCI in Luxembourg in 1972 with head offices in Karachi and London; regulators closed it in July 1991 amid billions of dollars of fraud.

Luckin Coffee, which admitted in 2020 that about $310 million of its revenue was faked, is based in which country?

China: Luckin, based in Xiamen, said its chief operating officer had fabricated about 2.2 billion yuan of transactions; it lost its American stock listing and paid $180 million to settle the fraud case.

Which short-selling firm published the 89-page report alleging Luckin Coffee's fraud?

Muddy Waters: Carson Block's firm posted the anonymous 89-page report on Twitter on 31 January 2020; Luckin denied everything, until its own inquiry confirmed the fabrication two months later.

Charles Ponzi claimed his 1920 scheme profited by trading what?

Postal reply coupons bought cheaply abroad could be swapped for dearer American stamps, the basis of his promise of 50% in 45 days, but the trade proved unworkable and Ponzi simply paid early investors with later investors' money.

Which newspaper won a Pulitzer Prize for exposing Charles Ponzi's scheme in the summer of 1920?

The Boston Post had printed a flattering article on Ponzi on 24 July 1920 that brought investors in faster than ever; two days later it began the series of hard questions that brought him down.

Before his Ponzi scheme was exposed, Bernie Madoff had chaired which stock exchange?

Nasdaq: Madoff's firm was an early user of computers to publish its share quotes, technology that helped give rise to the exchange, and he went on to chair it in 1990, 1991 and 1993.

Who turned Bernie Madoff in to the authorities in December 2008 after he confessed his fraud?

His sons Mark and Andrew: Madoff told them the business was 'one big lie'; on their lawyers' advice they went to the authorities at once, and he was arrested the next day.

What is the title of Harry Markopolos's 2010 book about trying to expose Madoff?

No One Would Listen: Markopolos's 2010 memoir recounts his SEC submissions of 2000, 2001 and 2005, the last titled 'The World's Largest Hedge Fund is a Fraud', all ignored.

Which actor played Nick Leeson in the 1999 film Rogue Trader?

Ewan McGregor starred opposite Anna Friel in the film of Leeson's own memoir; one American review called the book dreary but said every banking manager and auditor ought to read it.

Frank J. Wilson, the investigator who helped jail Al Capone, later became chief of which agency?

Secret Service: as its chief, Wilson fought forged banknotes with a nationwide 'Know Your Money' education drive, and resisted J. Edgar Hoover's attempts to move the agency into the Justice Department.

Which president signed the Sarbanes-Oxley Act?

George W. Bush signed it after the Enron and WorldCom collapses, calling it the most far-reaching reform of American business practices since Franklin Roosevelt's time; the Senate had passed it 99 to 0.

Sarbanes-Oxley banned public companies from giving their executives what?

Personal loans: the ban came after WorldCom's board extended chief executive Bernard Ebbers more than $400 million in loans and guarantees to cover his margin calls, and Tyco quietly forgave loans to its own boss.

The FASB replaced which AICPA body as US standard-setter on July 1, 1973?

Accounting Principles Board: created in 1959, the APB was wound up after a study group led by Francis Wheat proposed handing the rule-writing to a smaller board outside the institute's control.

Unlike the board it replaced, FASB members serve how?

Full-time: its seven members are appointed for five-year terms by a separate foundation, a design meant to make the rule-writers more independent than the board they succeeded.

The AICPA was founded in 1887 under what original name?

American Association of Public Accountants: it became the American Institute of Accountants in 1917, absorbed another national society in 1936 and decided at the same time to admit only CPAs from then on.

The AICPA is headquartered in which North Carolina city, also home to Duke University?

Durham: the institute's neighbour Duke arrived from another town in 1892, drawn by the gifts of tobacco men Julian Carr and Washington Duke; the AICPA also keeps offices in Manhattan and Washington.

As of 2024, how many semester units did the US CPA licence typically require?

150: that is roughly a year of study beyond a four-year bachelor's degree, and it sat beside the Uniform CPA Exam and a year of accounting experience as the standard the states applied.

What let Mary Harris Smith become the first woman chartered accountant in 1920?

An Act of Parliament: the Sex Disqualification (Removal) Act 1919 made it illegal to bar women; Harris Smith, by then 75, had run her own practice since 1887 and been turned away by the institute since 1891.

The ICAEW received its royal charter under which monarch?

Victoria: she signed the order in May 1880, and the charter merged five existing societies, among them those of Liverpool, Manchester and Sheffield, into one institute.

In the UK, which body's members alone use the plain 'CA' designation?

ICAS: in the UK the bare letters CA belong to its members alone, so chartered accountants from the far larger English and Welsh institute sign themselves ACA or FCA instead.

Which accountancy body began life in 1904 as the London Association of Accountants?

ACCA: its founders wanted a more open way into the profession than the older institutes allowed, and in 1909 it admitted Ethel Ayres Purdie, the first woman to join a professional accountancy body.

Which country's Institute of Chartered Accountants was created by its parliament in 1949, two years after independence?

India: until then the government itself kept the register of accountants; the 1949 Act handed the profession to a self-governing institute, months before the country had even become a republic.

Canada's CPA designation replaced the older titles CA, CGA and which other?

CMA: Certified Management Accountants, who mostly worked inside companies, merged with the other two bodies because the old distinctions between the three titles had blurred.

The Institute of Internal Auditors' first international chapter, formed in 1944, was where?

Its Certified Internal Auditor designation was introduced in 1974.

Which UK body launched the CGMA management accounting designation with the AICPA in 2012?

CIMA, the Chartered Institute of Management Accountants, created the CGMA with its American counterpart in 2012, and five years later the two bodies pooled their operations in a single international association.

The GASB sets GAAP for which US entities?

State and local governments: the GASB has set their accounting rules since 1984, yet it is not a government agency itself but a private body overseen, like the FASB, by the Financial Accounting Foundation.

Which US agency is nicknamed 'the congressional watchdog'?

Government Accountability Office: founded in 1921 as the General Accounting Office, the GAO investigates how federal money is spent, and its head is given a 15-year term so the job outlasts any one president or Congress.

The NAO, which scrutinises UK government spending, is led by which officer of the House of Commons?

Comptroller and Auditor General: the holder leads the National Audit Office as an officer of the Commons, independent of ministers and the civil service, so the auditors answer to Parliament and not to the government they check.

England's medieval Exchequer took its name from the board used for which game?

Chess: the name comes from the Old French for chessboard, because sheriffs' accounts were reckoned with counters moved across a chequered cloth when they came to settle up twice a year, at Easter and Michaelmas.

The Chancellor of the Exchequer heads which UK government department?

HM Treasury: the Chancellor runs it but ranks only as its Second Lord; the First Lord of the Treasury is the prime minister, a title still engraved on the letterbox of 10 Downing Street.

In 2005 the Inland Revenue merged with which department to form the UK's tax authority?

HM Customs and Excise: it collected indirect taxes such as duties while the Inland Revenue handled direct ones like income tax, so the April 2005 merger that created HMRC put both kinds under one roof.

The early-1950s overhaul that created the modern IRS replaced politically appointed tax collectors with whom?

Civil servants took over after bribery scandals among the bureau's own staff; President Truman's 1952 plan abolished the political collectors' posts, and a year later the bureau was renamed the Internal Revenue Service.

Which amendment to the US Constitution, ratified in 1913, cleared the way for a federal income tax?

The Sixteenth Amendment let Congress tax incomes without dividing the burden among the states by population, overturning an 1895 Supreme Court ruling that had struck down an earlier income tax.

Which Washington, D.C. holiday can push US Tax Day past April 15?

Emancipation Day: the District of Columbia's April 16 holiday counts as a legal holiday for IRS deadlines, so when its observance collides with April 15 or the following weekend, Tax Day slips to the next business day.

Which British prime minister introduced income tax in 1799 to help pay for the war with France?

William Pitt the Younger brought it in as a wartime measure; it was scrapped a year after Waterloo, revived by Peel in 1842, and must still be renewed by Parliament every year.

As of 2025, which is the only OECD member country without a value-added tax?

United States: it relies on state and local retail sales taxes instead, while every other OECD member, from Japan's consumption tax to the Australian and New Zealand GST, runs a VAT-style levy.

Where did brothers Henry and Richard Bloch found H&R Block in 1955?

Kansas City: the Bloch brothers ran a small bookkeeping firm there until a 1955 newspaper ad for $5 tax returns, placed as the IRS wound down its free help, brought the rush of customers that became H&R Block.

Michael Chipman's San Diego company Chipsoft launched which tax-preparation program in 1984?

TurboTax: Chipsoft released it in 1984 and was bought out nine years later, but the program never left town: it is still developed in San Diego.

Which company launched QuickBooks in 1992?

Intuit followed its household-finance program Quicken with QuickBooks, sold as an easier, cheaper alternative to traditional accounting software, and it caught on with small-business owners who had no bookkeeping training.

Cloud accounting firm Xero was founded in 2006 in which city?

Wellington: Rod Drury and Hamish Edwards started Xero in the New Zealand capital in 2006, yet since 2018 its shares have traded only in Australia, after it gave up its home stock-market listing.

Which Excel function, a staple of accountants' spreadsheets, finds a value by searching down the first column of a table?

VLOOKUP: the V stands for vertical, and because it can only read across from left to right, Microsoft later added XLOOKUP, which searches in any direction.

British software firm Sage was founded in 1981 in which city?

Newcastle: student Graham Wylie wrote the first Sage program after a summer job coding record-keeping tools for a local accountancy firm, and the company he co-founded in 1981 is still based on Tyneside.

Indian accounting-software giant Tally Solutions is headquartered in which city?

Bangalore: Tally began there in 1986 when Shyam Sunder Goenka asked his son Bharat to write a program to keep the family firm's books, first sold as Peutronics Financial Accountant.

Peachtree, the accounting software later bought by Sage, was first developed in which US city?

Atlanta: Peachtree was spun out of an early computer store there in 1978, and IBM later picked its accounting programs as launch software for the first IBM PC.

Enterprise-software giant SAP is headquartered where in Germany?

Walldorf: SAP moved to the small town in 1977, five years after five engineers left IBM to found it; in those early years they wrote and tested their software on customers' mainframes at night and on weekends.

In retail accounting, what is the term for stock lost to theft, damage or clerical error?

Shrinkage is the gap between the stock on a shop's books and what a count finds on the shelves, and until the mid-2010s US retail surveys blamed more of it on theft by staff than on shoplifters.

Before Excel, Microsoft's first spreadsheet program, released in 1982, was called what?

Multiplan: Microsoft wrote it in portable p-code so it could be moved to many different computers, beginning with CP/M machines; Excel replaced it, appearing first on the Macintosh in 1985.

Microsoft Excel's built-in macro programming language is called what?

VBA: Visual Basic for Applications arrived with Excel 5.0 in 1993, and because macros became a favourite way to spread malware, Microsoft now blocks them by default in files downloaded from the internet.

What is the difference between current assets and current liabilities called?

Working capital shows what a firm has to fund day-to-day operations, and a negative figure is not always trouble: grocery chains run that way because shoppers pay at the till long before suppliers are paid.

Which nickname do accountants give to a company's revenue?

The top line: revenue is the first figure in a company's results, while what is left once every expense has been deducted comes last, as the bottom line.

In the profit measure EBITDA, what does the 'I' stand for?

Interest: EBITDA is earnings before interest, taxes and two non-cash charges, and leaving interest out lets analysts compare companies however heavily each one has borrowed.

Goodwill can only be recognised on a company's books through what event?

An acquisition: goodwill is the premium a buyer pays over the fair value of what it acquires, and it must be tested regularly for impairment, so a deal that sours forces a write-down, often a very large one.

Retained earnings are also known by what nickname?

Plowback: retained earnings are profits plowed back into the business rather than paid out as dividends; a negative balance is called an accumulated deficit.

IFRS grew out of the standards issued from 1973 by which earlier body?

IASC: the International Accounting Standards Committee, founded in London in 1973, wrote the original IAS standards; once an independent board replaced it, everything issued afterwards took the IFRS name.

Which accounting assumption lets a business be valued as if it will not be liquidated in the next 12 months?

Going concern: managers must look at least twelve months ahead, and if survival is in real doubt the assets may have to be written down to what they would fetch in a liquidation.

What is the accounting term for gradually expensing the cost of an intangible asset?

Amortization does for patents and other intangibles what depreciation does for machinery; the word comes through Old French from a Latin root meaning to deaden, as the cost is gradually extinguished.

Money a business owes its suppliers for goods bought on credit is recorded as what?

Accounts payable: because suppliers are in effect lending the goods interest-free, a firm short of cash will often stretch these bills out, while suppliers push for shorter payment terms.

Petty cash is most commonly accounted for using which method?

Imprest: the petty cash fund is set at a fixed float and topped back up to that amount against vouchers and receipts, so cash plus receipts always equals the float.

Fund accounting, despite its name unrelated to investment funds, is the bookkeeping system of which entities?

Nonprofits and governments: fund accounting keeps money in separate pots by donor or legal restriction, so the books show whether each sum was spent as intended, not how much profit was made.

The matching principle says an expense should be reported in the same period as what?

The related revenue: the matching principle, a cornerstone of accrual accounting, books an expense in the period it helps generate revenue, so cost of goods sold is recorded when the sale is.

What do accountants call money owed by customers that a business no longer expects to collect?

Bad debt: most firms estimate it in advance through an allowance for doubtful accounts, trimming the receivables on their books before any particular customer has actually defaulted.

Off-balance-sheet financing is sometimes given what colourful nickname?

Total return swaps are one example of an off-balance-sheet item.

Which internal-control principle stops one employee from both handling cash and recording it in the books?

Segregation of duties: no one person should both hold an asset and keep its records, so a fraud needs more than one person; COSO's widely used framework lists it among its control activities.

Under the US government's naming convention, a fiscal year that spans 2023 and 2024 is labelled what?

FY24: the US government names each fiscal year for the calendar year in which it ends, so its FY24 began during 2023; conventions elsewhere vary, and some bodies write both years, as in FY 2023-24.

Cotrugli, who described double-entry bookkeeping in 1458, was a merchant from which city in present-day Croatia?

Dubrovnik, then the merchant republic of Ragusa, was Cotrugli's home, though he wrote his manual while living in Naples; it was not printed until 1573, long after another author's account had reached the presses.

The Summa de arithmetica, the first printed book on double-entry, was published in which city?

Venice: the city was then Europe's leading printing centre, producing more books than any rival in the fifteenth century, and the Summa de arithmetica came off its presses in 1494.

Luca Pacioli was born in which Tuscan town, giving him the nickname 'Luca di Borgo'?

Sansepolcro was also the home town of the painter Piero della Francesca, whose mathematical treatises Pacioli later reused without credit, a borrowing Vasari denounced as plagiarism.

Under Hammurabi's code, a trading agent could not count money paid to a merchant unless he held what?

A sealed receipt: the Babylonian code backed its paperwork with penalties, and the next law made an agent who denied receiving a merchant's money repay it threefold.

Al-Khwarizmi's ninth-century book, half of it on dividing inheritances, gave its title to which branch of mathematics?

Algebra comes from al-jabr, 'restoring', in the book's title; al-Khwarizmi filled about half of it with the fractions owed to heirs under Islamic law, and his own name later gave English the word algorithm.

Which bookkeeping report lists every account's debit or credit balance to check that the two columns agree?

Trial balance: matching totals prove less than they seem, because a transaction omitted altogether, or posted to the wrong account, still leaves the two columns equal.

In the 2016 film The Accountant, Ben Affleck plays an autistic CPA named what?

Christian Wolff: Affleck's character 'un-cooks' the books of criminal organisations to find who is stealing from them, and fights using the Indonesian martial art Pencak Silat.

The Producers' meek accountant Leo Bloom is a nod to a character in which novel?

Ulysses: Mel Brooks named his nervous accountant after Leopold Bloom, the hero of James Joyce's novel, a part the film's other star, Zero Mostel, had himself played on stage in 1958.

Which actor earned an Oscar nomination as the nervous accountant Leo Bloom in the 1967 film The Producers?

Gene Wilder was promised the part after Mel Brooks saw him on stage with Anne Bancroft; by Brooks's account Peter Sellers accepted the role first, then never called back.

Will Ferrell's Harold Crick in Stranger than Fiction works for which agency?

IRS: Crick is an Internal Revenue Service auditor who begins hearing novelist Karen Eiffel narrating his life while auditing baker Ana Pascal, played by Maggie Gyllenhaal.

In A Christmas Carol, Bob Cratchit works for Scrooge in what role?

Clerk: Cratchit copies letters in Scrooge's counting-house for fifteen shillings a week, and wears his comforter at work because Scrooge keeps the coal-box in his own room.

In Breaking Bad, Skyler White works as a bookkeeper for which Albuquerque firm?

Beneke Fabricators: Skyler returns to bookkeeping for Ted Beneke's firm in season 2 and discovers he is cooking the books; Anna Gunn won two Emmys for the role.

Which Office accountant is introduced as senior accountant and head of the Party Planning Committee?

Angela Martin: the senior accountant rules the Party Planning Committee with an iron fist; Angela Kinsey, who plays her, originally auditioned for the role of Pam.

Which actor plays Dunder Mifflin accountant Kevin Malone?

Brian Baumgartner played Kevin for all nine seasons and later hosted an Office oral-history podcast; Kevin's UK counterpart is Keith Bishop, played by Ewen MacIntosh.

Which Office accountant returned in the 2025 spin-off series The Paper?

Oscar Martinez: Oscar Nunez's accountant now keeps the books at a struggling Toledo newspaper, and is dismayed to find the same documentary crew that filmed him in Scranton back at his desk.

Which best-selling saxophonist majored in accounting at the University of Washington?

Kenny G (Kenneth Gorelick) studied accounting while already playing professionally with Barry White's Love Unlimited Orchestra, and still graduated magna cum laude.

Which UFC champion, nicknamed 'The Iceman', earned a business and accounting degree from Cal Poly in 1995?

Chuck Liddell wrestled for Cal Poly in San Luis Obispo before graduating, then kept fighting out of the same town on his way to the UFC light heavyweight title in 2005.

Nike co-founder Phil Knight once taught accounting at which university?

Portland State: Knight was teaching an accounting class there when he overheard student Carolyn Davidson say she couldn't afford art supplies and offered her work; in 1971 she drew the Nike swoosh for $35.

Which Home Depot co-founder, later owner of the Atlanta Falcons, began his career at a major accounting firm?

Arthur Blank joined Arthur Young and Company after college in 1963; fifteen years on he and Bernie Marcus were fired from the Handy Dan hardware chain in a boardroom fight and started Home Depot instead.

Which member of Led Zeppelin briefly trained as a chartered accountant after leaving grammar school?

Robert Plant gave up his accountancy training after only two weeks and left home at 16 to sing with a string of blues bands around the English Midlands.

What is an asset's cost less its accumulated depreciation called?

Book value: because it only tracks cost less depreciation, it can be far from what an asset would sell for; a fully depreciated building sits on the books at zero even if it is worth millions.

What is the acid-test ratio more commonly called?

Quick ratio: the acid test divides cash, marketable securities and receivables by current liabilities, leaving out inventory, which may not convert to cash quickly.

The careless 1834 burning of Exchequer tally sticks, once used as accounting records, destroyed which landmark?

The Houses of Parliament caught fire after the notched wooden sticks were stuffed carelessly into two furnaces beneath the Lords' chamber. The Exchequer had stopped using them in 1826.

Which pre-Columbian civilization tracked tax obligations and census counts on bundles of knotted cords called quipus?

The Inca tied knots in a decimal positional system, so a cord could store a number much as written digits do. Officials called quipucamayocs kept and read the cords.

Which American tycoon started work at sixteen as an assistant bookkeeper for a small produce commission firm?

John D. Rockefeller learned bookkeeping on a ten-week course at Folsom's Commercial College, and kept a close eye on the ledger for the rest of his life.

Cher won the Best Actress Oscar for playing widowed bookkeeper Loretta Castorini in which 1987 romantic comedy?

Moonstruck sends Loretta to invite her fiancé's estranged brother to the wedding, only for her to fall for him instead. Nicolas Cage played the hot-tempered brother.

Which American short-story writer was jailed for embezzlement after working as a bookkeeper at an Austin bank?

O. Henry was the pen name of William Sydney Porter, who published 14 stories under various pseudonyms while imprisoned and was released early for good behaviour.

England's medieval Exchequer, which audited sheriffs' accounts, was named after a table whose cloth resembled what?

A chessboard is 'échiquier' in French, and the Exchequer's counting table was covered by a black cloth striped in a chequer pattern. Counters placed on it stood for sums of money.

Bookkeepers sketch a ledger account, with debits on its left and credits on its right, in the shape of which letter?

T is the outline made by a horizontal rule across the head of a ledger page and a vertical rule down its middle. That is why a ledger account is nicknamed a T-account.

Which Japanese household bookkeeping method did journalist Motoko Hani first publish in a women's magazine in 1904?

Kakeibo translates as 'household ledger'. At the start of each month the user writes down expected income and necessary expenses, then sets a savings target.

Which commercial document apparently takes its name from 'envois', a French word for goods dispatched?

Invoice entered English in the 1550s for a written list of merchandise shipped and its prices. The French verb behind it, envoyer, means to send.

The bookkeeper's journal takes its name, through Old French, from the Late Latin word 'diurnalis', meaning what?

Daily is the sense that also produced newspapers called journals, and classical Latin already used 'diurnus' for an account book. English applied the word to accounts by the late 1400s.

After a transaction is written in the journal, what do bookkeepers call copying it into the ledger accounts?

Posting was a slow, separate step in handwritten books, which is why journals were needed to capture each deal on the spot. Software now does it almost instantly.

Receipts, deposit slips and suppliers' bills are examples of which records that back up every bookkeeping entry?

Source documents are where bookkeeping starts: the details of each one are copied into multi-column journals, also known as books of first entry, before anything reaches the ledger.

Which bookkeeping slip, such as writing 54 for 45, always leaves a difference that divides evenly by nine?

A transposition error can be hunted down with that quick test: when the gap between two totals divides by nine, look for a pair of digits that have switched places.

A trial balance can agree even when two unrelated mistakes cancel each other out; what are such mistakes called?

Compensating errors are one of several kinds of mistake a trial balance cannot detect, alongside a transaction left out entirely or one entered in the wrong account.

Where does a bookkeeper temporarily park a doubtful entry until its proper home in the ledger is clear?

A suspense account carries doubtful entries and discrepancies only until someone works out where they belong. It should always be emptied in the end, because it is for temporary use.

Accumulated depreciation is the classic example of which bookkeeping device, whose balance offsets the asset beside it?

A contra account runs the opposite way to its partner, so statements show it as an amount subtracted. The allowance for doubtful accounts does the same job against money owed by customers.

Which document does a seller issue to cut what a customer owes, typically after goods are sent back?

A credit note, also called a credit memo, cancels all or part of the bill issued earlier. It then serves as the evidence for recording the return in the books.

Which document does a buyer issue to a seller, listing the types, quantities and agreed prices of goods wanted?

A purchase order turns into a binding contract once the seller accepts it, if no earlier contract exists. It also protects the seller should the buyer later refuse to pay.

In a sole trader's books, which account records money or goods the owner takes out of the business for personal use?

Drawings cover goods as well as money, so equipment or unsold products the owner takes home must be recorded too. Each withdrawal shrinks the owner's capital in the business.

Which bookkeeping step at the end of a period transfers revenue and expense balances out of their temporary accounts?

Closing entries reset those accounts to zero for the next period. The balances may pass through an account called income summary on their way to retained earnings.

Which general ledger heading holds only the combined total of a subsidiary ledger, such as every customer's balance?

A control account is compared with the total of the detailed ledger behind it when a trial balance is prepared, so a mismatch shows that an entry has gone astray.

Which record, similar to a checking account register, sits at the heart of single-entry bookkeeping?

The cash book goes further than a bank register, because every receipt and payment is sorted into categories of income and expense. Many smaller businesses record only these bare essentials.

Money a company spends to buy or improve buildings, vehicles and equipment is classed as which kind of spending?

Capital expenditure, shortened to capex, generally brings a benefit that stretches beyond the year it is paid for, so the cost is capitalized instead of being deducted at once.

Credit terms written as 2/10, net 30 offer a buyer which reward for paying within ten days?

A cash discount of 2% is what those terms promise fast payers, while everyone else owes the full amount within 30 days. Sellers offer it to motivate prompt payment.

Money that customers owe a business for goods already supplied is recorded under which ledger heading?

Accounts receivable are legally enforceable claims for payment, which is why they count as an asset. They are treated as short-term when due within a year.

Which rough diary of each day's dealings got its name because merchants had no use for it once it was copied?

The waste book was for temporary use only: everything in it had to be transcribed into the journal before the accounts could be balanced. Colonial American merchants used the term.

Which term describes the side, debit or credit, that a particular type of account is expected to end up on?

A normal balance sets the expectation, so the opposite often signals a mistake: cash on hand, for instance, should never show a net credit balance.

Which note does a customer send a supplier, often alongside a cheque, to say that a bill has been paid?

A remittance advice may be a plain letter, a voucher attached to the cheque, or a tear-off portion of the supplier's own bill that the customer returns with the payment.

Which Beat Generation writer's grandfather invented an adding machine after years of checking bank ledgers for errors?

The parents of William S. Burroughs sold their rights to the invention, so the family had no share in the Burroughs Corporation that his grandfather's company grew into.

Which internal control principle says no one person should both hold a firm's cash and keep the records of it?

Separation of duties splits work into authorization, custody, record keeping and reconciliation, so that fraud takes more than one person. The protection has to be weighed against its extra cost.

On a personal balance sheet, what name is given to total assets minus total liabilities?

Net worth can turn negative: when accumulated losses outgrow what the owners put in, a company owes more than it owns. For an individual, a mortgage and other loans all count against it.

On a commercial bank's own balance sheet, which of these counts as a liability instead of an asset?

Customer deposits are money the bank owes back to its depositors, so they sit among its liabilities. The cash handed over, meanwhile, is shown as an asset of the bank.

Under IAS 38, which valuable asset can a company never put on its balance sheet if it was built up in-house?

Its brand name stays off the books because the cost of creating it cannot be told apart from the cost of running the business. Newspaper mastheads and customer lists are barred for the same reason.

Under the farming standard IAS 41, a dairy herd or timber plantation goes on the balance sheet as which kind of assets?

Biological assets are measured at fair value less costs to sell, and changes in that value go straight into profit or loss. A growing herd can therefore lift earnings before any animal is sold.

Under international accounting standards, the balance sheet goes by which more formal name?

Statement of financial position is the title international standards use when they list the statements that make up a full set of accounts. Another alternative name is statement of financial condition.

American balance sheets list receivables above factories because assets are arranged in order of which quality?

Liquidity is how readily something turns into cash, so cash itself heads the list. Under IFRS the order may be flipped, with land and buildings at the top.

Cash a publisher collects for a year's magazines in advance sits on its balance sheet as which liability?

Deferred revenue reflects an obligation to deliver goods or services that have already been paid for. As each issue goes out, a slice of it is released and counted as earned income.

A pending lawsuit that may cost a company money is disclosed in the balance sheet footnotes as which kind of obligation?

A contingent liability depends on the outcome of an uncertain future event, so a footnote describes its nature and extent. Product warranties are another common example.

Balance sheets group land, buildings and machinery under the heading PP&E; what does the second P stand for?

Plant completes the phrase 'property, plant and equipment', the formal name for fixed assets: long-lived items that may not easily be converted into cash.

Which convention keeps balance sheet items at their original amounts, not updated for later changes in value?

Historical cost can leave a building bought decades ago on the books at a fraction of what it would fetch if sold, because the figure is never revised as prices move.

Which term describes sprucing up a company's balance sheet and other statements just before they are made public?

Window dressing borrows its name from shops arranging their goods to look as appealing as possible to passers-by. On the whole, the practice is looked at with scepticism.

Leverage, the use of borrowed funds that loads a balance sheet with debt, also goes by which mechanical-sounding name?

Gearing magnifies profits when an asset's returns beat the cost of borrowing, and magnifies losses when they do not. Leverage itself is named after the lever in physics.

Which intangible balance sheet asset gives its owner an exclusive legal right that usually lasts 20 years from filing?

A patent lets its holder exclude others from making, using or selling an invention, as long as maintenance fees are paid. A trademark, by contrast, can last indefinitely.

When shares are issued for more than their nominal value, the excess appears on the balance sheet under which heading?

Share premium, also called capital surplus, goes by additional paid-in capital in American accounts, although that label can cover more than the premium alone.

An asset whose market value has fallen below the figure on its owner's balance sheet is said to have suffered what?

Impairment has to be recognised under American rules, which make such downward revisions compulsory yet forbid marking fixed assets up to reflect fair market values.

Which kind of balance sheet presents a parent company and its subsidiaries as if they were a single business?

Consolidated accounts cancel out dealings inside the group: the parent's investment in a subsidiary is set against that subsidiary's share capital, so nothing is counted twice.

IFRS 16, effective from 2019, forced companies to put which contracts on the balance sheet as right-of-use assets?

Leases now appear as a right-of-use asset matched by a lease liability, ending years in which much lease financing was kept off the balance sheet.

The 'balance' in balance sheet comes from the Late Latin word 'bilanx', which described what device?

A pair of scales with two pans is what bilanx described, possibly from the Latin words for twice and for dish. The same image put scales in the hands of Justice.

A firm that has enough assets, but not in a form it can pay its debts with, suffers which kind of insolvency?

Cash-flow insolvency can usually be resolved by negotiation, because the assets are there. The opposite case, too few assets to cover every debt, is the balance-sheet kind.

Which bond-buying policy dramatically expanded the US Federal Reserve's balance sheet during the 2008 financial crisis?

Quantitative easing has a central bank buy predetermined amounts of government bonds or other financial assets, which then sit on its own balance sheet as new assets matched by new liabilities.