Business / Accounting Glossary

Freight-In: An account used with the periodic inventory method for recording the costs of transporting into a firm all purchased merchandise intended for sale: added to purchases in calculating cost of . . . View Full Definition

Functional Currency: The currency in which a subsidiary conducts most of its business: generally, but not always, the currency of the country where it does most of its spending and earning.

Garnishment: A court order requesting that an employer deduct a percentage of the employee’s paycheck and send it to the creditor before the paycheck is given to the employee.

Gearing (Leverage): The comparison of a company's long term fixed interest loans compared to its assets. In general two different methods are used: 1. Balance sheet gearing is calculated by dividing long term l . . . View Full Definition

General Ledger: See Nominal Ledger .

General-Purpose Financial Statements: The financial reports intended for use by a variety of external groups: they include the balance sheet, the income statement, and the statement of cash flows.

Generally Accepted Accounting Principles (GAAP): Authoritative guidelines that define accounting practice at a particular time.

Generally Accepted Auditing Standards (GAAS): Auditing standards developed by the AICPA.

Going Concern: The idea that an accounting entity will have a continuing existence for the foreseeable future.

Goodwill: An intangible asset that exists when a business is valued at more than the fair market value of its net assets, usually due to strategic location, reputation, good customer relations, or sim . . . View Full Definition

Government Transfer Payment: Payments by governments, such as social security, veterans’ benefits, and welfare, to people who do not supply current goods, services, or labor in exchange for these payments.

Grace Period: A time period during which a borrower can pay the full balance of credit due and not incur any finance charges.

Gross Income: The taxable portion of a taxpayer's gross receipts.

Gross Loss: The balance of the trading account assuming it has a debit balance.

Gross Margin: The difference between the selling price of a product or service and the cost of that product or service often shown as a percentage. Eg. if a product sold for 100 and cost 60 to buy or manu . . . View Full Definition

Gross Margin Method: A procedure for estimating the amount of ending inventory: the historical relationship of cost of goods sold to sales revenue is used in computing ending inventory.

Gross Profit: The balance of the trading account assuming it has a credit balance.

Gross Sales: Total recorded sales before deducting any sales discounts or sales returns and allowances.

Gross Tax Liability: The amount of tax computed by multiplying the tax base (taxable income) by the appropriate tax rates.

Growth And Acquisition (G and A): Describes a way a company can grow. Growth means expanding through its normal operations, Acquisition means growth through buying up other companies.

Held-To-Maturity Securities: Debt securities purchased by an investor with the intent of holding the securities until they mature.

Historical Cost: The dollar amount originally exchanged in an arm's-length transaction: an amount assumed to reflect the fair market value of an item at the transaction date.

Historical Exchange Rate: The exchange rate that existed on the date of a transaction.

Horizontal Analysis Of Financial Statements: A technique for analyzing the percentage change in individual income statement or balance sheet items from one year to the next.

Identity Theft: Crime committed when someone gains access to and uses another person's credit card numbers, social security number, birth date, checking and savings account numbers, drivers' license, automo . . . View Full Definition

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