Debit - Entry on the left side of a DOUBLE-ENTRY BOOKKEEPING system that represents the addition of an ASSET or expense or the reduction to a LIABILITY or REVENUE. (See CREDIT.)

Debit Balance - BALANCE remaining after one or a series of bookkeeping entries. This amount represents an ASSET or an expense of the entity. (See BALANCE.)

Debt - General name for money, notes, BONDS, goods or services which represent amounts owed.

Debt Security - Document which is evidence of an obligation or LIABILITY.

Debt Service Fund - Fund whose PRINCIPAL or INTEREST is set aside and accumulated to retire DEBT.

Debtor - Party owing money or other ASSETS to a CREDITOR.

Decedent - Individual who has died. Defalcation - To misuse or embezzle funds.

Default - Failure to meet any financial obligation. Default triggers a CREDITOR'S rights and remedies identified in the agreement and under the law.

Defeasance - Annulment of a contract or deed; a clause within a contract or deed that provides for annulment.

Deferred Charge - Cost incurred for subsequent periods which are reflected as ASSETS.

Deferred Income - Income received but not earned until all events have occurred. Deferred income is reflected as a LIABILITY.

Deferred Income Taxes - ASSETS or LIABILITIES that arise from timing or measurement differences between tax and accounting principles.

Deficit - Financial shortage that occurs when LIABILITIES exceed ASSETS.

Defined Benefit Plan - See EMPLOYEE BENEFIT PLAN.

Defined Contribution Plan - See EMPLOYEE BENEFIT PLAN.

Demand Loan - Loan repayable on demand. Also known as a CALL LOAN.

Depletion - Method of computing a deduction to ACCOUNT for a reduction in value of extractable natural resources.

Deposit Method - Related to the sales of real estate, under this method the seller does not recognize any profits, does not record a note RECEIVABLE, and continues to reflect the property and related DEBT in the seller's FINANCIAL STATEMENTS, recording the buyer's initial investment and subsequent payments as a deposit.

Depreciation - Expense allowance made for wear and tear on an ASSET over its estimated useful life. (See ACCELERATED DEPRECIATION and STRAIGHT-LINE DEPRECIATION.)

Derivatives - Financial instruments whose value varies with the value of an underlying asset (such as a stock, BOND, commodity or currency) or index such as interest rates. Financial instruments whose characteristics and value depend on the characterization of an underlying instrument or asset.

Detection Risk - Risk that the AUDITOR will not detect a material misstatement.

Disbursement - Payment by cash or check.

Disclaimer of Opinion - Statement by an AUDITOR indicating inability to express an opinion on the fairness of the FINANCIAL STATEMENTS provided and the reason for the inability.

Disclosure - Process of divulging accounting information so that the content of FINANCIAL STATEMENTS is understood.

Discontinued Operations - Portion of a business that is planned to be or is discontinued.

Discount - Reduction from the full amount of a price or DEBT.

Discount Rate - Rate at which INTEREST is deducted in advance of the issuance, purchasing, selling, or lending of a financial instrument. Also, the rate used to determine the CURRENT VALUE, or present value, of an ASSET or income stream.

Discounted Cash Flow - Present value of future cash estimated to be generated.

Discretionary Trust - Arrangement in which the TRUSTEE has the authority to make INVESTMENT decisions and has control over investments within the framework of the TRUST instrument.

Dissolution - Termination of a CORPORATION.

Distribution Expense - Expense of selling, advertising, and delivery of goods and services.

Distributions - Payment by a business entity to its owners of items such as cash ASSETS, stocks, or earnings.

Dividends - Distribution of earnings to owners of a CORPORATION in cash, other ASSETS of the corporation, or the corporation's CAPITAL STOCK.

Double-Entry Bookkeeping - Method of recording financial transactions in which each transaction is entered in two or more accounts and involves two-way, self-balancing posting. Total DEBITS must equal total CREDITS.

Dual Dating - Dating of the ACCCOUNTANTS' or AUDITORS' REPORT when a subsequent event disclosed in the FINANCIAL STATEMENTS occurs after completion of the field work but before issuance of the report. For example, "January 3, 19xx, except for Note x, as to which the date is March 10, 19xx."

Due Diligence - (1) Procedures performed by underwriters in connection with the issuance of a SECURITIES EXCHANGE COMMISSION (SEC) registration statement. These procedures involve questions concerning the company and its business, products, competitive position, recent financial and other developments and prospects. Also performed by others in connection with acquisitions and other transactions. (2) Requirement found in ethical codes that the person governed by the ethical rules exercise professional care in conducting his or her activities.