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Abbreviations and
Acronyms Commonly
Used in Business and
Accounting
AAA American Accounting Association
ABC Activity-based costing
AICPA American Institute of Certified Public Accountants
CIA Certified Internal Auditor
CIM Computer-integrated manufacturing
CMA Certified Management Accountant
CPA Certified Public Accountant
Cr. Credit
Dr. Debit
EFT Electronic funds transfer
EPS Earnings per share
FAF Financial Accounting Foundation
FASB Financial Accounting Standards Board
FEI Financial Executives International
FICA tax Federal Insurance Contributions Act tax
FIFO First-in, first-out
FOB Free on boardGAAP Generally accepted accounting principles
GASB Governmental Accounting Standards Board
GNP Gross National Product
IMA Institute of Management Accountants
IRC Internal Revenue Code
IRS Internal Revenue Service
JIT Just-in-time
LIFO Last-in, first-out
Lower of C or M Lower of cost or market
MACRS Modified Accelerated Cost Recovery System
n/30 Net 30
n/eom Net, end-of-month
P/E Ratio Price-earnings ratio
POS Point of sale
ROI Return on investment
SEC Securities and Exchange Commission
TQC Total quality control
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Account Account Normal FinancialTitle Classifcation Balance Statement
Accounts Payable Current liability Credit Balance sheetAccounts Receivable Current asset Debit Balance sheetAccumulated Depletion Contra fixed asset Credit Balance sheet
Accumulated Depreciation Contra fixed asset Credit Balance sheetAdvertising Expense Operating expense Debit Income statementAllowance for Doubtful Accounts Contra current asset Credit Balance sheetAmortization Expense Operating expense Debit Income statementBonds Payable ZLong-term liability Credit Balance sheetBuilding Fixed asset Debit Balance sheetCapital Stock Stockholders equity Credit Balance sheetCash Current asset Debit Balance sheetCash Dividends Stockholders equity Debit Retained earnings statementCash Dividends Payable Current liability Credit Balance sheetCommon Stock Stockholders equity Credit Balance sheetCost of Merchandise (Goods) Cost of merchandise Debit Income statement
Sold (goods sold)Deferred Income Tax Payable Current liability/Long- Credit Balance sheet
term liabilityDelivery Expense Operating expense Debit Income StatementDepletion Expense Operating expense Debit Income statementDiscount on Bonds Payable Long-term liability Debit Balance sheetDividend Revenue Other income Credit Income statementDividends Stockholders equity Debit Retained earnings statementEmployees Federal Income Tax Current liability Credit Balance sheet
PayableEquipment Fixed asset Debit Balance sheetExchange Gain Other income Credit Income statementExchange Loss Other expense Debit Income statement
Factory Overhead (Overapplied) Deferred credit Credit Balance sheet (interim)Factory Overhead (Underapplied) Deferred debit Debit Balance sheet (interim)Federal Income Tax Payable Current liability Credit Balance sheetFederal Unemployment Tax Current liability Credit Balance sheet
PayableFinished Goods Current asset Debit Balance sheetFreight In Cost of merchandise Debit Income statement
soldFreight Out Operating expense Debit Income statementGain on Disposal of Fixed Assets Other income Credit Income statementGain on Redemption of Bonds Other income Credit Income statementGain on Sale of Investments Other income Credit Income statementGoodwill Intangible asset Debit Balance sheet
Income Tax Expense Income tax Debit Income statementIncome Tax Payable Current liability Credit Balance sheetInsurance Expense Operating expense Debit Income statementInterest Expense Other expense Debit Income statementInterest Receivable Current asset Debit Balance sheetInterest Revenue Other income Credit Income statementInvestment in Bonds Investment Debit Balance sheetInvestment in Stocks Investment Debit Balance sheetInvestment in Subsidiary Investment Debit Balance sheetLand Fixed asset Debit Balance sheetLoss on Disposal of Fixed Assets Other expense Debit Income statementLoss on Redemption of Bonds Other expense Debit Income statement
Classification of Accounts
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Account Account Normal FinancialTitle Classifcation Balance Statement
Loss on Sale of Investments Other expense Debit Income statementMarketable Securities Current asset Debit Balance sheetMaterials Current asset Debit Balance sheet
Medicare Tax Payable Current liability Credit Balance sheetMerchandise Inventory Current asset/Cost of Debit Balance sheet/Income
merchandise sold statementNotes Payable Current liability/Long- Credit Balance sheet
term liabilityNotes Receivable Current asset/Investment Debit Balance sheetOrganizational Expenses Operating expense Debit Income statementPatents Intangible asset Debit Balance sheetPaid-In Capital from Sale of Stockholders equity Credit Balance sheet
Treasury StockPaid-In Capital in Excess of Stockholders equity Credit Balance sheet
Par (Stated Value)Payroll Tax Expense Operating expense Debit Income statementPension Expense Operating expense Debit Income statementPetty Cash Current asset Debit Balance sheetPreferred Stock Stockholders equity Credit Balance sheetPremium on Bonds Payable Long-term liability Credit Balance sheetPrepaid Insurance Current asset Debit Balance sheetPrepaid Rent Current asset Debit Balance sheetPurchases Cost of merchandise Debit Income statement
soldPurchases Discounts Cost of merchandise Credit Income statement
soldPurchases Returns and Cost of merchandise Credit Income statement
Allowances sold
Rent Expense Operating expense Debit Income statementRent Revenue Other income Credit Income statementRetained Earnings Stockholders equity Credit Balance sheet/Retained
earnings statementSalaries Expense Operating expense Debit Income statementSalaries Payable Current liability Credit Balance sheetSales Revenue from sales Credit Income statementSales Discounts Revenue from sales Debit Income statementSales Returns and Allowances Revenue from sales Debit Income statementSales Tax Payable Current liability Credit Balance sheetSinking Fund Cash Investment Debit Balance sheetSinking Fund Investments Investment Debit Balance sheetSocial Security Tax Payable Current liability Credit Balance sheet
State Unemployment Tax Payable Current liability Credit Balance sheetStock Dividends Stockholders equity Debit Retained earnings statementStock Dividends Distributable Stockholders equity Credit Balance sheetSupplies Current asset Debit Balance sheetSupplies Expense Operating expense Debit Income statementTreasury Stock Stockholders equity Debit Balance sheetUncollectible Accounts Expense Operating expense Debit Income statementUnearned Rent Current liability Credit Balance sheetUtilities Expense Operating expense Debit Income statementVacation Pay Expense Operating expense Debit Income statementVacation Pay Payable Current liability/Long- Credit Balance sheet
term liabilityWork in Process Current asset Debit Balance sheet