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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Bad Debt

A loss from the worthlessness of a debt.

Balance Due

The amount owed to the IRS after subtracting total tax payments from the total tax liability on a tax return.

Balance Sheet

A report of the balances in all asset, liability, and owner's equity accounts at the end of the period.

Bank Discount

The interest charge deducted in advance on a non-interest-bearing note payable.

Bank Service Charge

A fee the bank charges for maintaining bank records and processing bank statement items for the depositor.

Bank Statement

An itemized record of all the transactions in a depositor's account over a given period, usually a month.


A card issued by a bank that can be used to withdraw cash and to make payments for goods and services at many businesses in place of writing checks.

Bankcard Fee

A fee charged for handling bank card sales slips; it is usually based on the total dollar volume of the bank card sales processed.

Barter Exchange

Any person or an organization with members or clients that contract with each other (or with the barter exchange), who jointly trades or barters property or services.


An exchange of property or services.

Base Year

A year or period that is used for comparison in financial statements analysis.


The amount of an individual's investment in property for tax purposes.

Beginning Inventory

The merchandise a business has on hand at the beginning of a fiscal period.


A person designated to receive all or a portion of a benefit after the owner dies.

Board Of Directors

A group of people, elected by the common stockholders, who are responsible for the affairs of a corporation.

Book Value

The value of an asset at a specific point in time. For a plant asset, it equals the initial cost of the plant asset minus the accumulated depreciation.

Book Value Of Accounts Receivable

The amount the business can reasonably expect to receive from all its charge customers.


Cash or fair market value of unlike property received in an exchange.

Business Bad Debt

A business bad debt that is either of the following: created or acquired in the taxpayer's trade or business or closely related to the taxpayer's trade or business when it became partly or totally worthless (a debt is closely related to the taxpayer's trade or business if the taxpayer's primary motive for incurring the debt is business related).

Business Books and Records

The intangible value of technical manuals; training manuals or programs; data files; accounting or inventory control systems; customer lists; subscription lists; insurance expirations; patient or client files; and lists of newspaper, magazine, radio, and television advertisers.

Business Entity

Exists independently of its owner's personal holdings. The accounting records and reports are maintained separately and contain financial information related only to the business.

Business Expenses

Costs that do not have to be capitalized or included in the cost of goods sold. To be deductible, business expenses must be both ordinary and necessary.

Business Transaction

A business event, such as the buying, selling, or exchange of goods, that causes a change in the assets, liabilities, or owner's equity of a business.

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