Business / Accounting Glossary

Mortgage Amortization Schedule: A schedule that shows the breakdown between interest and principal for each payment over the life of a mortgage.

Mortgage Payable: A written promise to pay a stated amount of money at one or more specified future dates: a mortgage is secured by the pledging of certain assets, usually real estate, as collateral.

Moving Average: A way of smoothing out (i.e. removing the highs and lows) of a series of figures (usually shown as a graph). If you have, say, 12 months of sales figures and you decide on a moving average p . . . View Full Definition

Multiple-Step Income Statement (Multi-Step): An income statement (Profit and Loss ) which has had its revenue section split up into sub-sections in order to give a more detailed view of its sales operations. Example: a company sells se . . . View Full Definition

Mutual Agency: The right of all partners in a partnership to act as agents for the normal business operations of the partnership, with the authority to bind it to a business agreements.

Mutual Funds: Investment companies that pool money from shareholders and invest in a variety of securities, including stocks, bonds, and short-term money market assets.

Narrative: A comment appended to an entry in a journal. It can be used to describe the nature of the transaction, and often in particular, where the other side of the entry went to (or came from).

National Credit Union Administration (NCUA): A federal agency that charters and oversees federal credit unions. The NCUA insures deposits at federal credit unions and at some state credit unions against certain losses.

Natural Resources: Assets that are physically consumed or waste away, such as oil, minerals, gravel, and timber.

Net Assets (Owners Equity): The ownership interest in the assets of an entity: equal total assets minus total liabilities.

Net Income (Or Net Loss): A measure of the overall performance of a business entity: equal to revenues minus expenses for the period.

Net Loss: The value of expenses less sales assuming that the expenses are greater (ie. if the profit and loss account shows a debit balance).

Net Of Tax: The price less any tax. Eg. if you sold some goods for $12 inclusive of $2 sales tax, then the 'net of tax' price would be $10

Net Proceeds: The difference between maturity value and discount when a note receivable is discounted.

Net Profit: The value of sales less expenses assuming that the sales are greater (ie. if the profit and loss account shows a credit balance).

Net Realizable Value: The selling price of an item less reasonable selling costs.

Net Realizable Value Of Accounts Receivable: The net amount that would be received if all receivables considered collectible were collected: equal to total accounts receivable less the allowance for uncollectible accounts: also called . . . View Full Definition

Net Sales: Gross sales less sales discounts and sales returns and allowances.

Net Tax Liability: The amount of tax computed by subtracting tax credits from the gross tax liability.

Net Worth: See Equity .

No-Par Stock: Stock that does not have a par value printed on the face of the stock certificate.

Nominal Accounts: Accounts that are closed to a zero balance at the end of each accounting period: temporary accounts generally appearing on the income statement.

Nominal Ledger: A ledger which holds all the nominal accounts of a business. Where the business uses a subsidiary ledger like the sales ledger to hold customer details, the nominal ledger will usually inclu . . . View Full Definition

Noncash Items: Items included in the determination of net income on an accrual basis that do not affect cash: examples are depreciation and amortization.

Noncash Transactions: Investing and financing activities that do not affect cash: if significant, they are disclosed below the statement of cash flows or in the notes to the financial statements.

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