RECORDING PRINCIPLE Definition

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RECORDING PRINCIPLE of Accrual Basis of accounting is the recording of data based upon the period in which they are earned or incurred regardless of whether cash is received or disbursed in that period. The recording principle of 'Cash Basis' is the recording of data based on a cash transaction occurrence between two parties (an actual event).

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DOLLAR-WEIGHTED RATE OF RETURN is also called the internal rate of return; the interest rate that makes the present value of the cash flows from all the sub-periods in an evaluation period plus the terminal market value of the portfolio equal to the initial market value of the portfolio.

FINANCIAL RATIO is the result of dividing one financial statement item by another. Ratios help analysts interpret financial statements by focusing on specific relationships.

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