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Accounting Terms M-R

Accounting Terms M-R

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Items (82)

  • Taxes based on the payroll of a business

    Payroll taxes

  • An invoice used as a source document for recording a purchase on account transaction

    Purchase invoice

  • A periodic inventory conducted by counting, weighing, or measuring items of merchandise on hand

    Physical inventory

  • The revenue earned by a business from its normal business operations

    Operating revenue

  • The price after the trade discount has been deducted from the list price

    Net price

  • A form requesting that a vendor sell merchandise to a business

    Purchase order

  • All property not classified as real property

    Personal property

  • Expenses that are not related to a business's normal operations

    Non-operating expenses

  • A form showing proof of a petty cash payment

    Petty cash slip

  • Transferring information from a journal entry to a ledger account


  • The cash receipts and payments necessary to operate a business on a day-to-day basis

    Operating activities

  • A business owned by one person


  • A federal tax paid for hospital insurance

    Medicare tax

  • Accounts used to accumulate information from one fiscal period to the next

    Permanent accounts, real accounts

  • A formal report that shows what an individual owns, owes, and the difference between the two

    Net worth statement

  • A budgeting strategy of setting aside at least 10% of after-tax income for saving and investing

    Pay yourself first

  • The price that must be paid to replace an asset

    Market value

  • A check dishonored by the bank because of lack of funds in the account of the maker of the check

    Non-sufficient funds check, NSF check

  • Income from operations as a percent of net sales

    Operating margin, rate of return on sales

  • A business that purchases and resells goods

    Merchandising business

  • Earnings paid to an employee after payroll taxes and other deductions

    Net pay

  • The difference between personal assets and personal liabilities

    Personal net worth

  • A ratio that measures a corporation's financial performance in relation to the market value of its stock

    Market ratio

  • The interest rate charged to a bank's most creditworthy customers

    Prime interest rate

  • A written and signed promise to pay a sum of money at a specified time

    Promissory note, note

  • A trial balance prepared after the closing entries are posted

    Post-closing trial balance

  • The person or business that signs a note and thus promises to make payment

    Maker of a note

  • Credit allowed for the purchase price of returned merchandise

    Purchases return

  • When a company that has purchased merchandise on account takes a cash discount

    Purchases discount

  • Cash paid for an expense in one fiscal period that is not used until a later fiscal period

    Prepaid expense, deferred expense

  • An amount of cash kept on hand and used for making small payments

    Petty cash

  • The amount that is due on the maturity date of a note

    Maturity value

  • The difference between total revenue and total expenses when total expenses are greater

    Net loss

  • Cash and other current assets that can be quickly converted into cash

    Quick assets, current assets

  • An accounting business that helps other businesses with accounting issues

    Public accounting firm

  • A promissory note that a business accepts from a person or business

    Note receivable

  • The amount a business adds to the cost of merchandise to establish the selling price


  • The amount of sales, less sales discount and sales returns and allowances

    Net sales

  • A special journal used to record only purchases of merchandise on account

    Purchases journal

  • A ratio that measures the ability of a business to generate income

    Profitability ratio

  • A written agreement setting forth the conditions under which a partnership is to operate

    Partnership agreement

  • A business in which two or more persons combine their assets and skills


  • Physical assets that will be used for a number of years in the operation of a business

    Plant assets

  • The date on which the principal of a note is due to be repaid

    Maturity date

  • Total operating expenses as a percent of net sales

    Operating expense ratio

  • A value assigned to a share of stock and printed on the stock certificate

    Par value

  • A ratio that measures the relationship of quick assets to current liabilities

    Quick ratio

  • A financial ratio determined by dividing 365 days by the inventory turnover ratio

    Number of days' sales in inventory

  • A method that uses an analysis of accounts receivable to estimate the amount that will be uncollectible

    Percent of accounts receivable method

  • A retirement savings plan approved by the Internal Revenue Service that provides individuals with a tax benefit

    Qualified retirement plan

  • The area of accounting that focuses on reporting information to internal users

    Managerial accounting

  • The difference between total revenue and total expenses when total revenue is greater

    Net income

  • A specialized computer used to collect, store, and report all the information about a sales transaction

    Point-of-sale terminal (POS)

  • The total amount earned by all employees for a pay period


  • The amount of accounts receivable a business expects to collect

    Net realizable value

  • An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item

    Perpetual inventory

  • An accounting form that summarizes the earnings, deductions, and net pay of all employees for one pay period

    Payroll register

  • A class of stock that gives shareholders preference over common shareholders in dividends along with other rights

    Preferred stock

  • The relationship between the market value per share and earnings per share of stock

    Price-earnings ratio

  • Writing an account title and number on the heading of an account

    Opening an account

  • Goods that a business purchases to sell


  • The expenses incurred by a business in its normal operations

    Operating expenses

  • Any amount withheld from an employee's gross earnings

    Payroll deduction

  • The tax rate associated with a tax bracket

    Marginal tax rate

  • A transaction in which the items purchased are to be paid for later

    Purchase on account

  • A financial statement that summarizes the changes in owner's equity during a fiscal period

    Owners' equity statement

  • Net income after federal income tax as a percent of net sales

    Profit margin

  • A promissory note signed by a business and given to a creditor

    Note payable

  • The original amount of a note

    Principal, face amount

  • An accounting form on which a business records information about each plant asset

    Plant asset record

  • A check with a future date on it

    Postdated check

  • The person or business to whom the amount of a note is payable


  • The side of an account that is increased

    Nominal balance

  • The number of days or weeks of work covered by an employee's paycheck

    Pay period

  • A method which assumes that a percentage of each sales dollar will eventually become uncollectible

    Percent of sales method

  • The goods a business has on hand for sale to customers

    Merchandise inventory

  • A merchandise inventory evaluated at the end of a fiscal period

    Periodic inventory

  • The amount remaining after the value of all liabilities is subtracted from the value of all assets

    Owner's equity

  • Determining that the amount of cash agrees with the balance of the cash account in the accounting records

    Proving cash

  • Credit allowed for part of the purchase price of merchandise that is not returned

    Purchases allowance

  • The accounting staff position that compiles and computes payroll data, then prepares, journalizes, and posts payroll transactions

    Payroll clerk

  • A form on which a brief message is written to describe a transaction