Accounting glossary - dictionary_7

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Accounting glossary - dictionary_7http://www.ventureline.com/glossary.aspMINORITY INTEREST is the interest or percentage ownership of a group ofstockholders who, in total, own less than 50% of the shares in the corporation.MINOR MATTERS is a term used in accounting and legal reports to cover areasconsidered to be cosmetic or superficial; thereby deemed by the author to be oflittle consequence.MIS see MANAGEMENT INFORMATION SYSTEM.MISCELLANEOUS INCOME is that income realized that is not directly related tothe sale of standard products and services.MODIFIED ACCELERATED COST RECOVERY SYSTEM (MACRS) is a systemused in accounting to define the rate and method under which a fixed asset willbe depreciated for tax purposes.MODIFIED ACCRUAL BASIS accounting is a mixture of the cash and accrualbasis. The modified accrual basis should be used for governmental funds. To berecognized as a revenue or expenditure, the actual receipt or disbursal of cashmust occur soon enough after a transaction or event has occurred to have animpact on current spendable resources. In other words, revenues must be bothmeasurable and available to pay for the current periods liabilities. Revenues areconsidered available when collectible either during the current period or after theend of the current period but in time to pay year-end liabilities. Expenditures arerecognized when a transaction or event is expected to draw upon currentspendable resources rather than future resources.MONETARY is anything pertaining to or having to do with money, moneycreation, money supply, and the government management of money.MONEY MEASUREMENT CONCEPT stipulates that all business transactionsmust be expressed in money terms, i.e., if something cannot be measured inmoney; it will not be included in accounting books.MONEY MEASUREMENT PRINCIPLE see MONEY MEASUREMENTCONCEPT.MONETARY UNIT is the unit used to measure economic activity (e.g., U.S. $).MORTGAGE is a conditional conveyance of property as security for therepayment of a loan.MORTGAGE BOND is a bond in which the issuer has granted the bondholders alien against the pledged assets.MOU is Memorandum of Understanding. 121http://www.ventureline.com/glossary.aspMUD is Multi Unit Discount.MULTIPLE same as Price/Earnings Ratio.MULTIPLIER is a. the investment multiplier which quantifies the overall effects ofinvestment spending on total income; or, b. the deposit multiplier which showsthe effects of a change in bank deposits on the total amount of outstanding creditand the money supply.MUTUAL AGENCY is the right of all partners in a partnership to act as agents forthe normal business operations of the partnership, with the authority to bind it tobusiness agreements. 122http://www.ventureline.com/glossary.aspNATURAL BUSINESS YEAR is a fiscal year based on the cycle of the givenbusiness rather than a calendar year. The year ends with inventories andactivities at a low level, e.g., after winter shipments for a ski manufacturer.NATURAL CLASSIFICATION of costs focuses on the nature of the cost item. Inthis classification structure, the total operating costs of an activity can beclassified into manufacturing costs and commercial costs. Manufacturing costsinclude all direct materials and direct labor, as well as, factory overhead. Suchfactory overhead costs include indirect materials (such as factory supplies &lubricants), indirect labor (such as supervision and inspection) and other indirectcosts (such as rent, insurance, and utilities). Commercial expenses includemarketing expenses (such as advertising, printing, and sales salaries) andadministrative (general and administrative (G&A)) expenses (such asadministrative office salaries, rent, and legal expenses).NCD is Negotiable Certificate of Deposit.NEAR-CASH ASSETS are non-cash assets that can be readily exchanged forcash within a relatively short period (e.g., short-term CDs and money marketfunds).NEBT is Net Earning Before Taxes.NEGATIVE AMORTIZATION is a loan repayment schedule in which theoutstanding principal balance of the loan increases, rather than amortizing,because the scheduled monthly payments do not cover the full amount requiredto amortize the loan. The unpaid Interest is added to the outstanding principal, tobe repaid later.NEGATIVE CONTRIBUTOR is any item, activity, or cost that offsets attainmentof positive results, e.g., a rise in unemployment and its effect upon the economy.NEGATIVE GOODWILL arises where the net assets at the date of acquisition,fairly valued, exceed the cost of acquisition. It is reflected on the balance sheetnet of other intangible assets. Negative goodwill is recognized as income asfollows:  To the extent that negative goodwill relates to expected future losses and expenses, it is recognized in the income statement when the future losses and expenses are recognized.  The amount of negative goodwill relating to identifiable non-monetary assets (not exceeding the fair values of such acquired assets), is recognized as income on a systematic basis over the remaining useful lives of the identifiable acquired depreciable/amortizable assets with a maximum of 20 years. 123http://www.ventureline.com/glossary.asp  The amount of the negative goodwill in excess of the fair values of the acquired identifiable non-monetary assets is recognized as income immediately.  The amount of the negative goodwill relating to monetary assets is recognized as income immediately NOTE: Intangible assets are not revalued.NEGATIVE PLEDGE CLAU ...