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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Face Value

The amount written on the face of a promissory note; usually the same as the principal.

Fair Market Value (FMV)

The price that property would sell for on the open market or the price that would be agreed upon between a willing buyer and willing seller, with neither being required to buy or sell and both having reasonable knowledge of the relevant facts.

Fair Rental Price

The amount that an individual (who is not related to the property owner) is willing to pay to rent property. If the rental price is substantially less than for similar properties in the same area, it is not considered a fair rental price.

Fair Rental Value

The amount an individual could reasonably expect to receive from a stranger for lodging. Fair rental value includes rent or taxes, interest, depreciation, pain, insurance, utilities, or the cost of furniture and appliances. In some cases, fair rental value may be equal to the rent paid.

Farming Business

A trade or business involving the cultivation of land; raising or harvesting any agricultural or horticultural commodity; operating a nursery or sod farm; raising or harvesting trees bearing fruit, nuts, or other crops; or raising or harvesting ornamental trees. Farming businesses also include the raising, shearing, feeding, caring for, training, and management of animals.

Federal Tax Deposit Coupon

A form sent with payment for FICA and federal income taxes or federal unemployment taxes to indicate the total amount of taxes being paid.

Federal Unemployment Tax Act (FUTA)

Requires employers to pay unemployment taxes.


An amount paid for the benefit of an individual to aid in the pursuit of study or research.

Filing Requirements

Factors that determine whether a taxpayer must file a federal individual income tax return.

Filing Status

The tax return status used to determine a taxpayer's filing requirements, standard deduction, applicable tax, and whether the taxpayer is allowed to claim certain other deductions and credits.

Financial Accounting

Reporting information to external users (individuals not directly involved in the day-to-day operations of the business).

Financial Claims

Legal rights to an item. financial reports Summarized information about the financial status of a business.

Financial Statements

Prepared to summarize the changes resulting from business transactions that occur during an accounting period.

Financially Disabled

The inability of an individual to manage their financial affairs because of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

First-in, First-out Method

An inventory costing method that assumes that the first items purchased (first in) were the first items sold (first out).

Fiscal Year

A 12-month period ending on the last day of any month except December.

FOB Destination

Shipping terms specifying that the supplier pays the shipping cost to the buyer's destination.

FOB Shipping Point

Shipping terms specifying that the buyer pays the shipping charge from the supplier's shipping point.


A column total written in small pencil figures.

For-profit Business

Business that operates to earn money for its owners.


A procedure by which the lender either takes title to or forces the sale of the borrower's property in satisfaction of a debt.

Foreign Country

Usually any territory (including the air space and territorial waters) under the sovereignty of a government other than that of the United States, including the seabed and subsoil of those submarine areas adjacent to the territorial waters of a foreign country and over which the foreign country has exclusive rights under international laws to explore and exploit the natural resources.

Form 940

The employer's unemployment tax return; it includes both federal and state unemployment taxes paid during the year.

Form 941

The employer's quarterly federal tax return; it reports the accumulated amounts of FICA and federal income tax withheld from employees' earnings for the quarter, as well as FICA tax owed by the employer.

Form W-2

A form that provides the employee with a summary of earnings and amounts withheld for federal, state, and local taxes; also called a wage and tax statement.

Form W-3

The Transmittal of Wage and Tax Statements, filed with the federal government to summarize the information contained on the employees' Forms W-2.

Free Enterprise System

A system in which people are free to produce the goods and services they choose.

Fringe Benefits

A form of additional compensation for the performance of services.

Full Disclosure

Accounting guideline requiring that a financial report include enough information so that it is complete.

Full-Time Student

An individual attending an educational institution who meets the definition of full-time attendance for that institution.

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