Glossary – Accounting

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There are 16 names in this directory beginning with the letter S.
Safety stock
An additional quantity of items held in inventory in order to minimize the chance of an item being out of stock.

A revenue account that reports the sales of merchandise. Sales are reported in the accounting period in which title to the merchandise was transferred from the seller to the buyer.

Statement of Cash Flows.

Secured creditor
A lender such as a bank who has placed a lien on a borrower’s assets. As a result, the lender has collateral until the loan amount is repaid.

Selling expenses
Selling expenses are part of the operating expenses (along with administrative expenses). Selling expenses include sales commissions, advertising, promotional materials distributed, rent of the sales showroom, rent of the sales offices, salaries and fringe benefits of sales personnel, utilities and telephone usage in the sales department, etc. Under the accrual basis of accounting, selling expenses appear on the income statement in the period in which they occurred (not the period in which they were paid).

Serial bond
A bond issued with a series (or staggering) of maturity dates.

Statement of Financial Accounting Standards.

Selling, general and administrative expenses.

Sole practitioner
A certified public accountant (CPA) who practices accounting in his or her own firm without another CPA as a partner or shareholder.

Split-off point
The point at which several products emerge from a common process.

Waste, scrap, evaporation, etc. in the manufacturing of products. Normal spoilage is considered unavoidable and is part of the cost of producing the good output. Abnormal spoilage is considered avoidable and is not part of the cost of producing good output. The cost of abnormal spoilage should be expensed when it occurs.

Stock certificate
Paper evidence of ownership in a corporation. The certificate would indicate the type of stock (common, preferred), any restrictions pertaining to the sale of the stock, the number of shares, the par value, etc. Today, the larger corporations with many shareholders are likely to use electronic records instead of issuing the paper stock certificates.

Stop payment order
A directive to a company’s bank to not honor (pay) a specific check that the company had written. The company making the request will be charged a fee by the bank for this service.

Subsidiary accounts
The accounts outside of the general ledger which provide the detail for the balance reported in a general ledger account.

Sunk cost
A past, historical cost. They are called sunk because a past cost cannot be changed and decisions involve only the present and the future.

Suspense account
A temporary holding place for amounts that need further analysis.
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