Accountant's Glossary

Accountant's Glossary

Here at PSVS we are in the trenches every day helping you navigate your way through the various complexities of your accounting-related activities. It is easy to forget that not everyone knows all the accounting-specific terminology we use daily.

We have created this fairly comprehensive glossary to supplement your knowledge and understanding and hopefully answer some of your questions.

Of course, if you have any additional questions send us an email or give us a call: (650) 578-1200.

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S Corporation

A corporation that generally is exempt from federal income tax. Its shareholders include on their tax returns their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of income or loss not separately stated. An S corporation may have no more than 100 shareholders, may have only one class of stock, and must be a domestic corporation.

Salaries Expense

The expense account used to record employees' earnings.


A fixed amount of money paid to an employee for each pay period.

Sale On Account

The sale of merchandise that will be paid for at a later date.


A revenue account to record the amount of the merchandise sold.

Sales Allowance

A price reduction granted for damaged goods kept by the customer.

Sales Discount

A cash discount.

Sales Journal

A special journal used to record only the sale of merchandise on account.

Sales Return

Any merchandise returned for credit or a cash refund.

Sales Slip

A form that lists the details of a sale.

Sales Tax

A tax levied by a city or state on the retail sale of merchandise.

Salvage Value

The estimated value of property at the end of its useful life. Salvage value is not used under the Modified Accelerated Cost Recovery System.

Schedule Of Accounts Payable

A list of all creditors in the accounts payable ledger, the balance in each account, and the total amount owed to all creditors.

Schedule Of Accounts Receivable

A list of each charge customer, the balance in the customer's account, and the total amount due from all customers.


An amount paid or allowed to, or for the benefit of, a student at an educational institution to aid in the pursuit of studies.


A money substitute, such as a card or paper certificate, that is used in exchange for goods and services.

Section 1231 Transactions

Sales, exchanges, and involuntary conversions of business, rental, and royalty property held longer than one year.

Section 1245 Property

Any property that is or has been subject to depreciation or amortization and is personal property, a single purpose agricultural or horticultural structure, or a storage facility (other than a building or its structural components) used for the distribution of petroleum.

Section 1250 Property

Real property (other than section 1245 property) that is or has been subject to an allowance for depreciation.

Section 179 Property

Property defined under section 179 of the IRS code for which a taxpayer can choose to recover all or part of the cost of the property (up to a limit) by deducting it in the year they place the property in service.

Section 197 Intangibles

Assets listed in section 197 of the IRS code that a taxpayer can choose to amortize over a period of 15 years.

Self-Employed Individual

An independent contractor, a person who carries on a trade or business as a sole proprietor, an active member of a partnership, or a person who is in business for themselves in any other way.

Self-Employment Tax

Social Security tax and Medicare tax primarily for individuals who work for themselves.

Selling Expenses

Expenses incurred in selling or marketing the merchandise or services sold by a business.

Separate Maintenance Decree

A legal document, court order, or agreement specifying amounts paid to one spouse by another spouse while they live apart.

Separate Property

Property belonging to one spouse that is not community property.

Separately Stated Items

The beneficiary, partner, or shareholder's distributive share of income and deductions from an estate, trust, partnership, or S corporation reported on a Schedule K-1.

Service Business

Provides a needed service for a fee.

Settlement Date

The date by which property must be delivered and payment must be made.

Shared Equity Financing Agreement

An agreement under which two or more persons acquire undivided interests for more than 50 years in an entire dwelling unit (including the land), and one or more co-owners are entitled to occupy the unit as their main home upon payment of rent to the other co-owner or owners.

Short-Term Holding Period

A period of one year or less.

Sick Pay

A payment to an employee to replace regular wages while they are temporarily absent from work due to sickness or personal injury.

Signature Card

A card containing the signature(s) of the person(s) authorized to write checks on a checking account.

SIMPLE (Savings Incentive Match Plan for Employee)

A qualified retirement plan, using IRAs, that certain small employers (including self-employed individuals) can set up for the benefit of their employees.

Simplified Employee Pension (SEP)

A written qualified retirement plan that allows self-employed individuals to make contributions toward their own, and their employees', retirement using a traditional individual retirement arrangement (called a SEP-IRA).

Simplified Method

The required method of calculating the taxable portion of benefits from a qualified retirement plan with an annuity starting date after November 18, 1996.


Activities that you perform well.

Slide Error

Accidental misplacement of a decimal point in an amount.

Sole Proprietor

Someone who owns an unincorporated business by themselves.

Sole Proprietorship

A business that is owned by one individual and is not incorporated.

Source Document

A paper prepared as evidence that a transaction occurred.

Special Journals

Multicolumn journals that have columns reserved for the recording of specific types of transactions.

Specific Identification Method

An inventory costing method in which the exact cost of each item in inventory is determined and assigned; used most often by businesses that have a low unit volume of merchandise with high unit prices.


A trustee or other administrator of a retirement plan.


The difference between an incentive stock option's exercise price and the stock's fair market value on the date of exercise.

Standard Deduction

A predetermined dollar amount that reduces the income subject to tax. The amount varies depending on the taxpayer's filing status, age, blindness, and dependency status.

Standard Mileage Rate

A per mile rate, established by statute, that a taxpayer uses to calculate deductible vehicle expenses based on miles driven. Specific rates apply based on whether the use is for business, charity, moving, or medical reasons.

Start-Up Costs

Costs for creating an active trade or business or investigating the creation of acquisition of an active trade or business. Start-up costs include any amounts paid or incurred in connection with any activity engaged in for profit and for the production of income in anticipation of the activity becoming an active trade or business.

State Unemployment Tax Act (SUTA)

Requires employers to pay unemployment taxes.

Statement Of Changes In Owner's Equity

A financial statement prepared to summarize the effects of business transactions on the capital account.

Statement Of Changes In Partners' Equity

A financial statement that reports the changes in each partner's capital account as a result of business operations.

Statement Of Retained Earnings

A statement that reports the changes that have taken place in the Retained Earnings account during the fiscal period; prepared as a supporting document for the balance sheet.

Statement Of Stockholders' Equity

A statement that reports the changes that have taken place in all of the stockholders' equity accounts during the period.


A legislative act or law.

Statutory Employee

A worker who would normally be considered an independent contractor, but is treated by statute as an employee. Statutory employees include full-time life insurance salespersons, certain agent or commission drivers, traveling salespersons, and certain home workers.


A share in a company that represents the portion of the company's earnings and assets that a shareholder owns.

Stock Rights

The ability to buy more shares in a company at a specified price for a limited time.

Stockholders' Equity

The value of the stockholders' claims to the assets of the corporation.

Stop Payment Order

A demand by the drawer that the bank not honor a certain check.

Straight-line Depreciation

A method of equally distributing the cost of a plant asset over the asset's estimated useful life.

Straight-Line Method

A method of calculating the depreciation for property that uses a percentage rate to deduct the same amount for each year in the recovery period. The percentage rate is determined by dividing one by the number of years in the recovery period.

Subsidiary Ledger

A ledger that is summarized in a controlling account in the general ledger.

Substantial Gainful Activity

An activity in which the taxpayer must perform significant duties over a reasonable period of time while working for pay or profit or in work generally done for pay or profit.

Supplier-Based Intangible

The value resulting from the future acquisition of goods or services used or sold by a business because of business relationships with suppliers including a favorable credit rating or a favorable supply contract.

Surviving Spouse

The widow or widower of a deceased individual.

For Individuals

For Business

General Services

Real Estate


Advisory Services

Financial Services

Risk Management