Accounting glossary

Question 1

A person in possession of an instrument.

Answer 1

Bearer

Question 2

One in possession of commercial paper.

Answer 2

Holder

Question 3

A business owned by one person.

Answer 3

Sole Proprietorship

Question 4

An order by a depositor on the bank to pay a sum of money to a payee.

Answer 4

Check

Question 5

A chart on which all sales are listed showing the number of sales in any sales bracket.

Answer 5

Sales Frequency Chart

Question 6

The person who executes any draft.

Answer 6

Drawer

Question 7

Balance of costly goods paid for in small monthly (fractional) payments over a period of time.

Answer 7

Closed End (Installment) Credit

Question 8

An artificial being, invisible, intangible and existing only in contemplation of law; an entity that has a distinct existence separate and apart from the existence of its individual members.

Answer 8

Corporation

Question 9

One to whom goods are shipped by common carrier.

Answer 9

Consignee

Question 10

The emphasis placed on providing to customers products and services that are safe, reliable, and honestly advertised; also a social movement that seeks to strengthen the rights of consumers relative to sellers.

Answer 10

Consumerism

Question 11

A claim that is supported by a pledge of assets belonging to the debtor.

Answer 11

Secured Claim

Question 12

An endorsement which limits the liability of the endorser.

Answer 12

Qualified Endorsement

Question 13

A negotiable instrument containing a promise to pay.

Answer 13

Promissory Note

Question 14

Those goods or stock of goods which are held for resale at a profit.

Answer 14

Inventory (Merchandise)

Question 15

A reduction of selling price below the original selling price.

Answer 15

Markdown

Question 16

The return of a portion of a payment.

Answer 16

Rebate

Question 17

A writing drawn in a special form which can be transferred from person to person as a substitute for money or as an instrument of credit.

Answer 17

Negotiable Instrument (Commercial Paper)

Question 18

A line of credit that may be used over and over again up to a certain borrowing limit.

Answer 18

Open-End Credit (Revolving Account)

Question 19

The contract existing between the cosigner (shipper) and the carrier.

Answer 19

Bill of Lading

Question 20

A reduction of the price given for payment of an account within the time limits established by the sales contract. 2/10, n/30 = 2% discount if paid 10 days from date of invoice/net amount must be paid within 30 days.

Answer 20

Cash Discount

Question 21

A formal financial statement which presents the income, expenses, and resulting net profit or net loss for a given period.

Answer 21

Income Statement

Question 22

The difference between current assets and current liabilities.

Answer 22

Circulating (Working) Capital

Question 23

A secured loan on a parcel of real estate.

Answer 23

Mortgage

Question 24

The value in an ordered set of values which represents a midpoint, whereby there are an equal number of values above and below the midpoint value.

Answer 24

Median

Question 25

A check drawn on a bank's own funds and signed by a responsible bank official.

Answer 25

Casher's Check

Question 26

The person hired to perform work and who is obligated both as to the work to be done and as the manner in which it is to be done.

Answer 26

Employee

Question 27

A source document showing quantity, description, prices of items, total amount of purchase and the terms of payment.

Answer 27

Invoice

Question 28

The acknowledgement by a bank of a receipt of money with an agreement of repayment.

Answer 28

Certificate of Deposit

Question 29

An inflow of assets as a result of selling a product or providing a service.

Answer 29

Income (Revenue)

Question 30

A person who deals in goods of a kind, or otherwise by occupation purports to have knowledge or skill peculiar to the practices or goods involved in the transaction.

Answer 30

Merchant

Question 31

An endorsement which designates the particular person to whom payment is to be paid.

Answer 31

Special Endorsement

Question 32

The person, company, or financial institution ordered to pay a draft.

Answer 32

Drawee

Question 33

The person who executes a promissory note.

Answer 33

Maker

Question 34

The transfer of title to goods from the seller to the buyer for a consideration called the price.

Answer 34

Sale

Question 35

An agreement that payment for a product or service will be made at some later date.

Answer 35

Credit

Question 36

The signature or statement of purpose by the owner on the back of a negotiable instrument, which indicates the future control of the instrument.

Answer 36

Endorsement

Question 37

The process of planning and executing the development, pricing, promotion, and distribution of an organization's goods/services.

Answer 37

Marketing

Question 38

That value that occurs most frequently in a group of numbers.

Answer 38

Mode

Question 39

A writing drawn in a special form which can be transferred from person to person as a substitute for money or as an instrument of credit.

Answer 39

Commercial Paper (Negotiable Instrument)

Question 40

The voluntary association of two or more people who have combined their resources to carry on as co-owners of a lawful enterprise for their joint profit.

Answer 40

Partnership

Question 41

The amount by which the bill or invoice will be reduced when a minimum quantity of merchandise has been ordered.

Answer 41

Quantity Discount

Question 42

Provides you with information that will help you in operating a business, make right decisions; it is the means by which business information is communicated.

Answer 42

Accounting

Question 43

The party to whom an negotiable instrument is made payable.

Answer 43

Payee

Question 44

A commercial paper payable to bearer; i.e., to the person having possession of such.

Answer 44

Bearer Paper

Question 45

A person who becomes the holder of a negotiable instrument by endorsements which names him/her as the person to whom the instrument is negotiated.

Answer 45

Endorsee

Question 46

A relationship of trust and confidence, such as that which exists between partners in a partnership.

Answer 46

Fiduciary

Question 47

A written order singed by one person requiring the person to whom it is addressed to pay a particular sum of money to the bearer, either on demand or at a certain time.

Answer 47

Draft

Question 48

One who ships goods by common carrier.

Answer 48

Cosigner

Question 49

A group of potential customers processing purchasing power and unsatisfied needs.

Answer 49

Market

Question 50

The number of times the average inventory has been sold or used up during a period.

Answer 50

Inventory Turnover

Question 51

The number of times sales in a given price bracket occur over a fixed period of time.

Answer 51

Sales Frequency

Question 52

A check for which the bank assures that the drawer has sufficient funds to make payment.

Answer 52

Certified Check

Question 53

The party who hires employees to do certain work.

Answer 53

Employer

Question 54

Person who writes his or her name on the back of an instrument.

Answer 54

Endorser

Question 55

A commercial paper made payable "to the order of" some named party; the word "order" or its equivalent must be used.

Answer 55

Order Paper

Question 56

Having no words other than the signature of the endorser (referring to checks).

Answer 56

Blank Endorsement

Question 57

A type of credit granted by retailers that is used by individuals or families for satisfaction of their own wants.

Answer 57

Consumer Credit

Question 58

An endorsement which prevents the use of the instrument for anything except the stated use.

Answer 58

Restrictive Endorsement

Question 59

One who contracts to perform certain tasks for a set fee, but who is independent of the control of the contracting party as a means by which the contract is executed, except for specifications established in the contract.

Answer 59

Independent Contractor

Question 60

The difference between merchandise cost and selling price.

Answer 60

Markup