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Superglossary - Accounting Category: Economy and Finance > Accounting Date & country: 16/12/2013, USA Words: 614

Revenue Recognition Principle
The idea that revenues should be recorded when (1) the earnings process has been substantially compl

Revenues
Increases in a company's resources from the sale of goods or services.

Risk
Exposure to loss of investment capital due to a variety of causes such as business failure, stock ma

Risk Management
Procedures to minimize the adverse effect of a possible financial loss by

Roth IRA
An IRA that allows for tax-free withdrawals as long as the contributions remain in the account for f

Rule Of 72
A quick way to calculate how long it will take to double a sum of money. Divide 72 by the expected i

Run Rate
A forecast for the year based on the current year to date figures. If a company's 1st quarter profit

Salary
Payment for work, usually calculated in periods of a week or longer. Salary is usually tied to the c

Sales
Income received from selling goods or a service. See Revenue .

Sales Discount
A reduction in the selling price that is allowed if payment is received within a specified period.

Sales Invoice
See Invoice .

Sales Journal
A special journal in which credit sales are recorded.

Sales Ledger
A subsidiary ledger which holds the accounts of a business's customers. A control account is held in

Sales Returns And Allowances
A contra-revenue account in which the return of, or allowance for, reduction in the price of merchan

Sales Tax Payable
Money collected from customers for sales taxes, that must be remitted to local governments and other

Salvage Or Residual Value
Estimated value or actual price of an asset at the conclusion of its useful life, net of disposal co

Savings
The process of setting aside money until a future date instead of spending it today. The goal of sav

Savings Accounts
Accounts at financial institutions that allow regular deposits and withdrawals. The minimum required

Savings Bond
A bond is a certificate representing a debt. A U.S. Savings Bond is a loan to the government. The go

Section 125 Plan
A formal plan to provide tax savings by reducing employee medical premiums from gross salary prior t

Secured Bonds
Bonds for which assets have been pledged in order to guarantee repayment.

Segregation Of Duties
Strategy to provide an internal check on performance through separation of custody of assets from ac

Self Assessment
A new style of income tax return introduced for the 1996/1997 tax year. If you are self-employed, or

Self-Balancing Ledgers
A system which makes use of control accounts so that each ledger will balance on its own. A control

Self-Employed
The owner (or partner) of a business who is legally liable for all the debts of the business (ie. th

Service
A term usually applied to a business which sells a service rather than manufactures or sells goods (

Share Premium
The extra paid above the face value of a share. Example

Shareholders
The owners of a limited company or corporation.

Shareholders (Stockholders)
Individuals or organizations that own a portion (shares of stock) of a corporation.

Shares
These are documents issued by a company to its owners (the shareholders) which state how many shares

Shares Issued (Shares Outstanding)
The number of shares a company has issued to shareholders.

Significant Influences
Influence presumed if a company owns between 20% and 50% of another company.

Simple Interest
Interest applied to the original sum invested (as opposed to compound interest ). Eg. 1000 invested

Single-Step Income Statement
An income statement where all the revenues are shown as a single total rather than being split up in

Sinking Fund
An account set up to reduce another account to zero over time (using the principles of amortization

SME
Small and Medium Enterprises (ie. small and medium size businesses). The distinction between what is

Social Security (FICA) Taxes
Federal Insurance Contributions Act taxes imposed on employee and employer

Sole Trader
See Sole-proprietor .

Sole-Proprietor
The self-employed owner of a business (see Self-employed ).

Solvency
A company's long-run ability to meet all financial obligations.

Source Document
An original invoice, bill or receipt to which journal entries refer.

Special Journal
A book of original entry for recording similar transactions that occur frequently.

Special Order
An order that may be priced below the normal price in order to utilize excess capacity and thereby c

Specific Identification
A method of valuing inventory and determining cost of goods sold whereby the actual costs of specifi

Standard Unqualified Audit Report
Audit report indicating that all auditing conditions have been met, no significant misstatements hav

Stated Rate Of Interest
The rate of interest printed on the bond.

Stated Value
A nominal value assigned to no-par stock by the board of directors of a corporation.

Statement Of Cash Flows
The financial statement that shows an entity's cash inflows (receipts) and outflows (payments) durin

Statement Of Partners Capital
A partnership report showing the changes in the capital balances

Statement Of Retained Earnings
A report that shows the changes in the Retained Earnings account during a period of time.

Statement Of Stockholders Equity
A financial statement that reports all changes in stockholders' equity.

Stock
This can refer to the shares of a limited company (see Shares ) or goods manufactured or bought for

Stock Certificate
A document issued by a corporation to stockholders evidencing ownership in the corporation.

Stock Control Account
An account held in the nominal ledger which holds the value of all the stock held in the inventory s

Stock Dividend
A pro rata distribution of additional shares of stock to shareholders.

Stock Split
The replacement of outstanding shares of stock with a greater number of new shares that have a propo

Stock Taking
Physically checking a business's stock for total quantities and value.

Stock Valuation
Valuing a stock of goods bought for manufacturing or re-sale.

Straight-Line Amortization
A method of systematically writing off a bond discount or premium in equal amounts each period until

Straight-Line Depreciation
Depreciating something by the same (ie. fixed) amount every year rather than as a percentage of its

Straight-Line Depreciation Method
The depreciation method in which the cost of an asset is allocated equally over the periods of an as

Subordinated Debt
If a company is liquidated (i.e. becomes insolvent ), the secured creditors are paid first. If any m

Subsidiary Company
A company owned or controlled by another company, known as the parent company.

Subsidiary Ledger
A grouping of individual accounts that in total equal the balance of a control account in the Genera

Subsidiary Ledgers
Ledgers opened in addition to a business's nominal ledger. They are used to keep sections of a busin

Supplies
Materials used in a business that do not generally become part of the sales product and were not pur

Suspense Account
A temporary account used to force a trial balance to balance if there is only a small discrepancy (o

Take Home Pay
Total wage or salary (plus bonuses) minus payroll deductions.

Tangible Assets
Assets of a physical nature. Examples include buildings, motor vehicles, plant and equipment, fixtur

Tangible Personal Business Property
Depreciable operating assets of a business, other than real property, including machinery, furniture

Tax
A government fee on business and individual income, activities, or products.

Tax Credit
An amount that a taxpayer who meets certain criteria can subtract from tax owed. Examples include a

Tax Deduction
An expense that a taxpayer can subtract from taxable income. Examples include deductions for home mo

Tax Exemption
An amount that a taxpayer who meets certain criteria can subtract from taxable income. Examples incl

Tax-Exempt (Tax Free)
Investments (e.g., municipal bonds) whose earnings are free from tax liability.

Taxable Income
Income subject to tax

Term Bonds
Bonds that mature in one lump sum at a specified future date.

Three Column Cash Book
A journal which deals with the day to day cash and bank transactions of a business. The side of a tr

Time Value Of Money
Comparison of a lump sum of money, or a series of equal payments, between two different time periods

Times Interest Earned Ratio
Ratio that indicates the company's margin above the fixed interest charged to be paid to creditors:

Tip
An amount paid beyond what

Total Cost Of Ownership (TCO)
The real amount an asset will cost. Example

Total Economic Impact (TEI)
Total economic impact of a potential project in terms of other projects that may spring from it.

Trading Account
An account which shows the gross profit or loss of a manufacturing or retail business, i.e. sales le

Trading Securities
Debt and equity securities purchased with the intent of selling them should the need for cash arise

Transaction
Two or more entries made in a journal which when looked at together reflect an original document suc

Transactions
Exchange of goods or services between entities (whether individuals, businesses, or other organizati

Transfer
(See money wire.)

Transfer Payments
(See government transfer payments.)

Transportation Costs
Costs of transferring merchandise into or out of a firm.

Travelers Checks
Documents that function as cash but can be replaced if lost or stolen. Travelers

Treasury Stock
Issued stock that has subsequently been reacquired by the corporation.

Trial Balance
A listing of all account balances

Truth In Lending Act (1968)
Federal law that mandates disclosure of information about the cost of credit. Both the finance charg

Turnover
The income of a business over a period of time (usually a year).

Uncollectible Accounts Expense
An account that represents the portion of the current period's receivables that are estimated to bec

Undeposited Funds Account
An account used to show the current total of money received (ie. not yet banked or spent). The 'fund

Unearned Income
Money received for which no exchange was made, such as a gift.

Unearned Revenues
Amounts received before they have been earned.

Unlimited Liability
The lack of a ceiling on the amount of liability a proprietor or partner must assume