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Accounting Terminology
S Corporation: A domestic corporation that is recognized as a regular corporation under state law but is granted special status for federal income tax purposes.

Sales: Income received from selling goods or a service.

Sales Discount: A reduction in the selling price that is allowed if payment is received within a specified period.

Sales Journal: A special journal in which credit sales are recorded.

Sales Ledger: A subsidiary ledger which holds the accounts of a business's customers. A control account is held in the nominal ledger (usually called a debtors' control account) which shows the total balance of all the accounts in the sales ledger.

Sales Returns and Allowances: A contra-revenue account in which the return of, or allowance for, reduction in the price of merchandise previously sold is recorded.

Sales Tax Payable: Money collected from customers for sales taxes, that must be remitted to local governments and other taxing authorities.

Salvage, or Residual, Value: Estimated value or actual price of an asset at the conclusion of its useful life, net of disposal costs.

SEC (Securities and Exchange Commission): The government body responsible for regulating the financial reporting practices of most publicly owned corporations in connection with the buying and selling of stocks and bonds.

Secured Bonds: Bonds for which assets have been pledged in order to guarantee repayment.

Segregation of Duties: Strategy to provide an internal check on performance through separation of custody of assets from accounting personnel, separation of authorization of transactions from custody of related assets, separation of operational responsibilities from record keeping responsibilities.

Self-Balancing Ledgers: A system which makes use of control accounts so that each ledger will balance on its own. A control account in a subsidiary ledger will be mirrored with a control account in the nominal ledger.

Self-Employed: The owner (or partner) of a business who is legally liable for all the debts of the business (i.e. the owner(s) of a non-limited company).

Self-Insurance: A term often used to describe the retention by an entity of a risk of loss arising out of the ownership of property or from some other cause, instead of transferring that risk to an independent third party through the purchase of an insurance policy. It is sometimes accompanied by the setting aside of assets to fund any related losses. Because no insurance is involved, the term self-insurance is a misnomer.

Selling, General & Administrative expense (SG&A): The expenses involved in running a business.

Service: A term usually applied to a business which sells a service rather than manufactures or sells goods (e.g. an architect or a window cleaner).

Shareholders (stockholders): Individuals or organizations that own a portion (shares of stock) of a corporation.

Short-Term Debt: Debt with a maturity of one your or less after the date of issuance. Short-term debt usually includes variable-rate debt, bond anticipation notes, tax anticipation notes and revenue anticipation notes.

Significant Influences: Influence presumed if a company owns between 20% and 50% of another company.

Single-Step Income Statement: An income statement where all the revenues are shown as a single total rather than being split up into different types of revenue (this is the most common format for very small businesses).

Sinking Fund: An account set up to reduce another account to zero over time (using the principles of amortization or straight line depreciation). Once the sinking fund reaches the same value as the other account, both can be removed from the balance sheet.

SME: Small and Medium Enterprises (i.e. small and medium size businesses): The distinction between what is 'small' and what is 'medium' varies depending on where you are and who you talk to.

Social Security (FICA) Taxes: Federal Insurance Contributions Act taxes imposed on employee and employer; used mainly to provide retirement benefits.

Sole-Proprietor: The self-employed owner of a business (see Self-employed).

Solvency: A company's long-run ability to meet all financial obligations.

Source Document: An original invoice, bill or receipt to which journal entries refer.

Special Journal: A book of original entry for recording similar transactions that occur frequently.

Special Order: An order that may be priced below the normal price in order to utilize excess capacity and thereby contribute to company profits.

Specific Identification: A method of valuing inventory and determining cost of goods sold whereby the actual costs of specific inventory items are assigned to them.

Spool: If a report or listing is to be printed, but the printer if busy or not ready, you may product the report or listing and save it on the computer to be printed later is called spooling. When the printer becomes available, the report may be printed (de-spooling).

Standard Unqualified Audit Report: Audit report indicating that all auditing conditions have been met, no significant misstatements have been discovered and remain uncorrected, and the auditors feel the financial statements are fairly stated in accordance with generally accepted accounting principles.

Stated Rate of Interest: The rate of interest printed on the bond.

Stated Value: A nominal value assigned to no-par stock by the board of directors of a corporation.

Statement of Cash Flows: The financial statement that shows an entity's cash inflows (receipts) and outflows (payments) during a period of time.

Statement of Earnings (Income Statement): The financial statement that summarizes the revenues generated and the expenses incurred by an entity during a period of time.

Statement of Partners' Capital: A partnership report showing the changes in the capital balances; similar to a statement of retained earnings for a corporation.

Statement of Retained Earnings: A report that shows the changes in the Retained Earnings account during a period of time.

Statement of Stockholders' Equity: A financial statement that reports all changes in stockholders' equity.

Stock: Refers to the shares of a limited company or goods manufactured or bought for re-sale by a business.

Stock Certificate: A document issued by a corporation to stockholders evidencing ownership in the corporation.

Stock Dividend: A pro rata distribution of additional shares of stock to shareholders.

Stock Split: The replacement of outstanding shares of stock with a greater number of new shares that have a proportionately lower par or stated value.

Straight-Line Amortization: A method of systematically writing off a bond discount or premium in equal amounts each period until maturity.

Straight-Line Depreciation Method: The depreciation method in which the cost of an asset is allocated equally over the periods of an asset's estimated useful life.

Sub-Account: An account attached to an individual GL account code in the company chart of accounts.

Subsidiary Account: One of a group of related accounts supporting in detail the debit and credit summaries recorded in a control account.

Subsidiary Company: A company owned or controlled by another company, known as the parent company.

Subsidiary Ledger: A grouping of individual accounts that in total equal the balance of a control account in the General Ledger.

Sum-of-the-Years'-Digits (SYD) Depreciation Method: The accelerated depreciation method in which a constant balance (cost minus salvage value) is multiplied by a declining depreciation rate.

Supplies: Materials used in a business that do not generally become part of the sales product and were not purchased to be resold to customers.

Suspense Account: An account carrying charges or credits temporarily pending the determination of the proper account or accounts to which they are to be posted.

Stock: This can refer to the shares of a limited company (see Shares) or goods manufactured or bought for re-sale by a business.

Stock Control Account: An account held in the nominal ledger which holds the value of all the stock held in the inventory subsidiary ledger.

Stock Valuation: Valuing a stock of goods bought for manufacturing or re-sale.

Straight-Line Depreciation: Depreciating something by the same (i.e. fixed) amount every year rather than as a percentage of its previous value. Example: a vehicle initially costs $10,000. If you depreciate it at a rate of $2000 a year, it will depreciate to zero in exactly 5 years. See Depreciation.

Subordinated Debt: If a company is liquidated (i.e. becomes insolvent), the secured creditors are paid first. If any money is left, the unsecured creditors are then paid. The amount of money owed to the unsecured creditors is termed the 'subordinated debt' of the company.

Subsidiary Ledgers: Ledgers opened in addition to a business's nominal ledger. They are used to keep sections of a business separate from each other (e.g. a Sales ledger for the customers, and a Purchase ledger for the suppliers). (See Control Accounts)

Suspense Account: A temporary account used to force a trial balance to balance if there is only a small discrepancy (or if an account's balance is simply wrong, and you don't know why). A typical example would be a small error in petty cash. In this case a transfer would be made to a suspense account to balance the cash account. Once the person knows what happened to the money, a transfer entry will be made in the journal to credit or debit the suspense account back to zero and debit or credit the correct account.