Fair market value
The price that would be paid in an arm's length exchange between two parties, both of whom have all available information about the item being exchanged.
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FASB
Financial Accounting Standards Board. A body of experts who sets the standards for financial accounting for non-governmental entities.
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Feedback
One of the three criteria of “Practicality” which is one of the two primary characteristics of accounting information. Decisions are made based on available information, however, it is valuable to confirm or correct those decisions with new available information.
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FICA
Federal Insurance Contributions Act - Refers to the amount of employee and employer contributions for Social Security.
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FIFO
First-In, First-Out method of determining cost of sales. The cost of inventory purchased first is assumed to have been used first.
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Financial accounting
The process of collecting, summarizing and reporting financial information of an entity according to established standards and principles.
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Financial statements
A balance sheet, statement of income & expense and statement of cash flow.
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Finished goods inventory
Goods that have been completely manufactured but not yet shipped.
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Fiscal year
A 12-month accounting period that a business entity designates based on the natural cycle of their activity, i.e, a school could end its year on June 30 when students have left for the summer.
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Fixed asset
Tangible, non-current assets that have a useful life of one year or more. Usually is property, plant, and equipment.
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Formula
An established form of words for use in a procedure.
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Fraud
A deliberate deception practiced so as to secure unfair or unlawful gain.
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Full Disclosure Rule
One of the five rules of operation of financial statements. This rule is only applicable in accrual basis accounting. The concept of full disclosure is that a user of financial statements should be made aware of any and all significant accounting procedures and policies or other relevant information that might have an impact on the interpretation of the financial statements.
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Fund accounting
A method of accounting used in non-profit organizations. For small organizations, it is used to keep track of funds restricted to specific purposes.
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Funds
Most often referred to as cash, however, can be used in other contexts, such as working capital.
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FUTA
Federal Unemployment Tax Act - Refers to the amount of employer contributions for federal unemployment tax.
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