Vocabulary

WHY DON'T YOU UNDERSTAND YOUR CHIEF FINANCIAL OFFICER?

Some of us find it difficult talking with doctors. We don't understand how our bodies work, and the terms they use aren't part of our everyday vocabulary. Others have the same problem with auto mechanics, insurance agents, stock brokers, et al. And, many people have difficulty speaking with CFO's -- even other accountants.

The accounting profession has worked long and hard to develop its jargon and acronyms. Take a little test. How many of these everyday CFO terms can you define?

General Ledger
Schedule M-1
Ratchet clause
Pooling of interests
GAAP
Discounted present value
50% ownership change
NOL carryforward
Nonqualified option
Monthly nut
APB
Triangular merger
FIFO
Off balance sheet financing
1099
Estate taxes
Sum of the years digits
Derivatives

IRA
The Big Board
AMT
DRP
DR, CR
ROE
SEC
EOQ
LBO
Burn Rate
Capital Gain
Rule of 78's
NIFO
IPO
FASB
W-2
AICPA
Puts and calls

Form 1040
Capital Lease
Warrants
Fully Diluted
S-1
DSO
Reorganization
Soft turnaround
Lehman formula
ROI
401(k)
Form 10Q
Sales cutoff
Keough
Capital gain
Operating lease
Funds flow
Debenture

Added in September 2008

No doc loan (aka liar’s loan)
Sub prime mortgage
Junk bond
Credit derivative
Credit default swap (“CDS”)
Funded CDS (aka credit-linked    note)

Basket CDS
Novation
Cash securitization
Synthetic securitization
Total return swap
Asset swap

Collateralized debt obligation      
  (CDO)

CDO squared
Mark to market basis
Mark to model
Mark to fantasy