Accounting

Glossary – Accounting

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There are 16 names in this directory beginning with the letter N.
NAA
National Association of Accountants. This organization’s name was changed to Institute of Management Accountants and currently is referred to as IMA.

Net
The result of two or more amounts being combined. For example, net sales is equal to gross sales minus sales returns, sales allowances, and sales discounts. The net realizable value of accounts receivable is the combination of the debit balance in accounts receivable and the credit balance in the allowance for doubtful accounts. The book value of equipment is also a net amount: the cost of the equipment minus the accumulated depreciation of the equipment.

Net loss
The bottom line of the income statement when revenues and gains are less than the aggregate amount of cost of goods sold, operating expenses, losses, and income taxes (if the company is a regular corporation).

Net of tax
A gross amount minus the income tax associated with the gross amount.

Next-in, first-out cost flow assumption
This is the expression for replacement cost, which is not an acceptable cost flow, since it violates the cost principle. However, an economist and decision makers would argue that the cost to replace the item is the relevant amount.

NIFO
Next-in, first-out cost flow assumption (NIFO).

Noncash expense
An expense reported on the income statement that did not require the use of cash during the period shown in the heading of the income statement. The typical example is depreciation expense. Also, the write-down of an asset’s carrying amount will result in a noncash charge against earnings.

Nonmonetary asset
Assets other than cash, accounts receivables, and notes receivables. Holders of nonmonetary assets could avoid holding losses during periods of inflation.

Nonprofit organization
An organization without owners and with the main purpose of providing services needed by society.

Normal account balance
The debit or credit balance that would be expected in a specific account in the general ledger. For example, asset accounts and expense accounts normally have debit balances. Revenues, liabilities, and stockholders’ equity accounts normally have credit balances.

Notes payable
The amount of principal due on a formal written promise to pay. Loans from banks are included in this account.

Notes receivable
An asset representing the right to receive the principal amount contained in a written promissory note. Principal that is to be received within one year of the balance sheet date is reported as a current asset. Any portion of the notes receivable that is not due within one year of the balance sheet date is reported as a long term asset.

Notes to financial statements
Also referred to as footnotes. These provide additional information pertaining to a company’s operations and financial position and are considered to be an integral part of the financial statements. The notes are required by the full disclosure principle.

NPV
Net present value.

NRV
Net realizable value.

NSF check
Sufficient funds (NSF).
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