How Do You Spell ACCUMULATED SURPLUS?

Pronunciation: [ɐkjˈuːmjʊlˌe͡ɪtɪd sˈɜːpləs] (IPA)

The term "accumulated surplus" is a technical accounting term used to describe excess profits that a company has not paid out as dividends. In IPA phonetic transcription, this term is pronounced as /əˈkjuːmjʊleɪtɪd ˈsɜːplʌs/. The letter "a" is pronounced with a schwa sound, while the "u" in "accumulated" is pronounced as a long u-sound. The "s" in "surplus" is pronounced like a "z" sound, while the letter "o" is pronounced with a short vowel sound. Proper spelling of this term is crucial in accounting to ensure accuracy in financial reporting.

ACCUMULATED SURPLUS Meaning and Definition

1. Accumulated surplus refers to a financial term used to describe the excess of a company's total income or profits over its total expenses or losses over a specific period. This surplus is obtained after deducting any dividends or distributions paid out to shareholders. Accumulated surplus is a measure of retained earnings that have accumulated and been retained by a company over time.

   When a company generates profits, it has the option to reinvest the earnings into the business or distribute them to shareholders as dividends. If a company retains the surplus earnings instead of distributing them, they become part of the accumulated surplus. This accumulated surplus can be used for future investments, expansion, debt reduction, or other growth strategies.

   Accumulated surplus is reflected as a part of the shareholders' equity in the company's balance sheet. It represents the cumulative earnings that have not been distributed to shareholders as dividends, indicating the overall financial health and profitability of the company. A higher accumulated surplus is often seen as a positive sign by investors and creditors, as it signifies the company's ability to generate consistent profits.

   In summary, accumulated surplus represents the total profits that a company has retained over time, after deducting dividends or distributions paid to shareholders. It serves as an indicator of financial stability and reinvestment potential for the company.

Etymology of ACCUMULATED SURPLUS

The word "accumulated" comes from the Latin word "accumulatus", which is the past participle of the verb "accumulare". It is formed from the prefix "ad-" meaning "to" or "towards" and "cumulare" meaning "to heap" or "to pile up".

The word "surplus" comes from the Old French word "surplus", which means "excess" or "remainder". It is derived from the Latin word "superplus", with "super" meaning "over" or "above" and "plus" meaning "more".

When these two words are combined, "accumulated surplus" refers to the excess or remainder that has been heaped up or piled up over time.