NETTING Definition

NETTING can be the settling of mutual obligations at the net value of a contract as opposed to its gross dollar value; or, the reduction of transfers of funds between subsidiaries or separate companies to a net amount.

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EXAMINATION, in an audit, is evaluating the preparation of  prospective statements, support underlying assumptions, and presentation. The accountant reports whether, in his
or her opinion, the statements conform to AICPA guidelines and assumptions provide a reasonable basis for the responsible party's forecast. The accountant should be independent, proficient, plan the engagement, supervise assistants, and obtain sufficient evidence to provide a reasonable basis for the report.

RECOGNIZE or RECOGNITION is the recording of a revenue or expense item in a given accounting period.

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