Industry Related Definitions
Back to the Index
B
Bad Debts
Business
accounts receivable that have been included in income in a prior year
that are uncollectible, legally binding debts owed to the taxpayer
that are totally worthless and uncollectible, and debts the taxpayer
must pay that he or she guaranteed in connection with his business or
for a profit may be deductible as bad debts.
Balance
Sheet
A statement showing the financial position (the
assets, liabilities, and capital) of an individual, company, or other
organization on a certain date.
Bank
reconciliation
A routine procedure to find out the reasons for a
discrepancy between the balance on deposit as shown by the bank and
the balance on deposit as shown by the depositor
Bankruptcy
For tax
purposes, a formal petition filed in a Bankruptcy Court under Chapter
7, 11, 12, or 13 of Title 11 of the U.S. Code.
Basis
The amount
assigned to an asset from which gain or loss is determined for income
tax purposes when the asset is sold. For assets acquired by purchase,
basis is cost. Special rules govern the basis of property received by
virtue of another's death or by gift, the basis of stock received on a
transfer of property to a controlled corporation, the basis of the
property transferred to the corporation, and the basis of property
received upon the liquidation of a corporation.
Basis of Stock
If
purchased, the amount paid for the stock. If the stock is received as
a gift, basis is generally the basis of the previous owner or the fair
market value when received. The basis of inherited stock is usually
its fair market value on the date of the decedent's death.
Bearer Bond
A bond
that has no owner's name registered on the books of the issuing
company and is therefore payable to the holder.
Bequest
A gift by
will of personal property. A bequest is not includable in the income
of the recipient. Basis is usually the value of the property at the
decedent's death. If a bequest of money is to be paid at intervals,
then to the extent that it is paid out of income from property, it is
taxable income to the recipient.
Bond
A note
obliging a corporation or governmental unit to repay, on a specified
date, money loaned to it by the bondholder. The holder receives
interest for the life of the bond. If a bond is backed by collateral,
it is called a mortgage bond. If it is backed only by the good faith
and credit rating of the issuing company, it is called a debenture.
Bookkeeper
A professional who ensures that transactions are
properly recorded and that supporting documents are present and
correct. Carries out routine calculations, reconciliation's and bank
transactions. Records daily business transactions in the accounting
cycle.
Book Value
An accounting term which usually refers to a
business' historical cost of assets less liabilities. The book value
of a stock is determined from a company's records by adding all assets
(generally excluding such intangibles as goodwill), then deducting all
debts and other liabilities, plus the liquidation price of any
preferred stock issued. The sum arrived at is divided by the number of
common shares outstanding and the result is the book value per common
share. Book value of the assets of a company may have little or no
significant relationship to market value.
Boot
Cash or property of a type not included in the definition of a
nontaxable exchange. The receipt of boot will cause an otherwise
tax-free transfer to become taxable to the extent of the lesser of the
fair market value of the boot or the realized gain on the transfer.
Examples of nontaxable exchanges that could be partially or completely
taxable due to the receipt of boot include transfers to controlled
corporations and like-kind exchanges.
Business Assets
Assets
used in a trade or business or used to produce rental or royalty
income.
Business Bad Debts
Business
accounts receivable that have been included in income that are
uncollectible, legally binding debts owed to you that are
uncollectible, and debts you must pay that you guaranteed in
connection with your business or for a profit may be deductible as bad
debts.
Business Gifts
The cost
of qualified business gifts is deductible to a maximum of $25 per year
per client or customer. The $25 limit does not apply to promotional
items costing $4 or less on which the taxpayer's name is clearly
imprinted.
Business-Use Property
Property
used for the production of income. Examples include rental houses,
machinery, factories, office buildings, and similar items.
Go
back to the Definition Index page
Also, check out our
certification explanation page here!
Would you like us to
add a word or phrase? Email us at
glossary@bookkeeperlist.com
