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).
Net Assets (Owners' Equity): The ownership interest in the
assets of an entity; equal total assets minus total liabilities.
Net Income: The proprietary fund excess of operating revenues,
non-operating revenues and operating transfers in over operating expenses, non-operating
expenses and operating transfers out.
Net Loss: The value of expenses less sales assuming that the
expenses are greater (e.g., if the profit and loss account shows a debit balance).
Net of Tax: The price less any tax. E.g., if you sold some
goods for $12 inclusive of $2 sales tax, then the 'net of tax' price would be
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 (e.g,. if the profit and loss account shows a credit balance).
Net Realizable Value: The selling price of an item less reasonable
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 uncollectable accounts;
also called the book value of accounts receivable.
Net Sales: Gross sales less sales discounts and sales returns
Net Tax Liability: The amount of tax computed by subtracting
tax credits from the gross tax liability.
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 Interest Rate: The contractual interest rate shown
on the face and in the body of a bond and used to compute the amount of interest
to be paid, in contrast to the effective interest rate.
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 include a control
account to show the total balance of the subsidiary ledger (a control account
can be termed 'nominal' because it doesn't relate to a specific person).
Non-Cash Items: Items included in the determination of net
income on an accrual basis that do not affect cash; examples are depreciation
Non-Cash 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.
Non-Operating Assets: Investment and other assets not used
in a business but held to earn a return separate from operations.
Non-Operating Expenses: Proprietary fund expenses not directly
related to the fund's primary activities (e.g., interest).
Non-Operating Revenues: Proprietary fund revenues incidental
to, or by-products of, the fund's primary activities.
Non-Profit Organization: An entity without a profit objective,
oriented toward providing services efficiently and effectively.
No-Par Stock: Stock that does not have a par value printed
on the face of the stock certificate.
Normalize: This term can be applied to many aspects of accounting.
It means to average or smooth out a set of figures so they are more consistent
with the general trend of the business.
Note Payable: A debt owned to a creditor evidenced by an unconditional
written promise to pay a certain sum of money on or before a specified future
Note Receivable: A claim against a debtor, evidenced by an
unconditional written promise to pay a certain sum of money on or before a specified
Note to Financial Statements: Explanatory information considered
an integral part of the financial statements.
NSF (Non Sufficient Funds) Check: A check that is not honored
by a bank because of insufficient cash in the customer's account.
Number of Days' of Inventory on Hand: An alternative measure
of how well inventory is being managed; computed by dividing 365 days by the
inventory turnover ratio.
Number of Days' Sales in Receivables: A measure of the average
number of days it takes to collect a credit sale; computed by dividing 365 days
by the accounts receivable turnover.
Number of Days' Sales Invested in Working Capital: An alternative
measure of the amount of working capital used in generating the sales of a period;
computed by dividing 365 days by the working capital turnover.