Accountant's Glossary

Accountant's Glossary

Here at PSVS we are in the trenches every day helping you navigate your way through the various complexities of your accounting-related activities. It is easy to forget that not everyone knows all the accounting-specific terminology we use daily.

We have created this fairly comprehensive glossary to supplement your knowledge and understanding and hopefully answer some of your questions.

Of course, if you have any additional questions send us an email or give us a call: (650) 578-1200.

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Main Home

The home in which an individual lives for most of the year.


The person or business promising to repay the principal and interest when a loan is made.

Management Accounting

Reporting information to management, often referred to as accounting for internal users of accounting information.

Mandatory Retirement Age

The age set by an employer at which an employee must retire.

Manual Accounting System

A system in which accounting information is recorded and processed by hand.

Manufacturing Business

A business that transforms raw materials into finished products through the use of labor and machinery.

Market Value

The current price that is being charged for similar items of merchandise in the market.


A legal union between a man and a woman as husband and wife. For federal income tax purposes, this definition supersedes any state definitions.

Matching Principle

Principle stating that expenses are compared to revenues for the same period.

Material Participation

The satisfaction of one of several tests used to determine that a trade or business is not a passive activity. Generally, material participation in an activity includes being involved in its operations on a regular, continuous, and substantial basis during the year.


An accounting guideline stating that relatively important data should be included in financial reports.

Maturity Date

The due date of a promissory note; the date on which the principal and interest must be paid.

Maturity Value

The principal plus interest on a note that must be paid on the maturity date.

Medical Care Expenses

Amounts paid for the diagnosis, cure, relief, treatment, or prevention of disease and for treatments affecting any part or function of the body. The medical care expenses must be primarily to relieve or prevent a physical or mental defect or illness.


A brief written message that describes a transaction that takes place within a business.


Goods bought for resale to customers.

Merchandising Business

A business that buys goods (for example, books or clothing) and then sells those goods for a profit.

Minimum Required Distribution

The smallest amount that must be distributed from a qualified plan to prevent an additional tax on excess accumulation. Also called a required minimum distribution.

Minimum Retirement Age

The earliest age at which a taxpayer can first receive a pension or an annuity if they are not disabled.

Ministerial Qualified Services

Services performed in the exercise of the taxpayer's ministry or in the exercise of the taxpayer's duties as required by their religious order.

Modified Accelerated Cost Recovery System (MACRS)

The name given to tax rules relating to recovering, through depreciation deductions, the basis of most business and investment property placed in service after 1986.

Modified Adjusted Gross Income (MAGI)

Adjusted gross income that is modified to meet the requirements of a specific tax item. Modifications are specific for each tax item that uses MAGI.


A legal document an individual signs when they borrow money and put real estate up as collateral to protect the interests of the lender.

Multiple Support Agreement

A written agreement indicating which taxpayer can claim the dependent exemption for an individual when two or more qualifying taxpayers together provide more than half of the individual's support and individually provide more than 10% of the individual's support.

Mutual Agency

The characteristic of partnerships under which any partner can enter into agreements for the business that are binding on all other partners.

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