Accounting Terms (G)

GAAP

The acronym for generally accepted accounting principles. To learn more, see Explanation of Accounting Principles.

gain contingency

contingent gain.

gain on retirement of bonds

The result of a corporation buying back its own bonds for an amount that is less than the carrying value of the bonds. The amount of the gain is computed by subtracting the amount spent to repurchase the bonds from the bonds' carrying value. The carrying value is usually the face amount of the bonds being retired plus the unamortized premium associated with the bonds being retired (or minus the bonds' unamortized discount) minus the bonds' unamortized issue costs.

gain on sale of assets

This is a non-operating or "other" item resulting from the sale of an asset (other than inventory) for more than the amount shown in the company's accounting records. The gain is the difference between the proceeds from the sale and the carrying amount shown on the company's books.

gain on sale of automobile

The amount by which the proceeds from the sale of an automobile used in the business exceeded its carrying amount at the time it is sold.

gain on sale of equipment

The amount by which the proceeds from the sale of equipment (that had been used in the business) exceeded its carrying amount at the time it is sold.

gain on sale of investments

The amount by which the proceeds from the sale of investments exceeded the carrying amount of the investments that were sold. It is reported as a non-operating or "other" item on a multiple-step income statement.

gain on sale of land

The amount by which the proceeds from the sale of land exceeded the carrying amount of the land sold. It is reported as a non-operating or "other" item on a multiple-step income statement.

gain on sale of truck

A non-operating item that results from the sale of a long-term asset at an amount greater than the carrying amount (book value) of the truck at the time it is sold.

gain or loss on the sale of a long-term asset

A non-operating item that results from the sale of a long-term asset for more (gain) or less (loss) than its carrying amount or book value.

gains

Gains result from the sale of an asset (other than inventory). A gain is measured by the proceeds from the sale minus the amount shown on the company's books. Since the gain is outside of the main activity of a business, it is reported as a nonoperating or other revenue on the company's income statement. To learn more, see Explanation of Income Statement.

garnishment

In payroll processing, the withholding of money from an employee's wages or salary as ordered by a court. The money is then remitted by the employer to the agency specified by the court. To learn more, see Explanation of Payroll Accounting

garnishment payable

This current liability account reports the amount a company must remit to a court or other agencies for amounts withheld from its employees' salaries and wages.

general journal

A book of original entry that requires that both the account being debited and the account being credited be listed along with the respective amounts. Because of accounting software and special journals there are relatively few entries made into the general journal.

general journal entry

The journal entry recorded in the general journal (as opposed to the sales journal, cash journal, etc.).

general ledger

That part of the accounting system which contains the balance sheet and income statement accounts used for recording transactions.

general ledger account

An account in the general ledger, such as Cash, Accounts Payable, Sales, Advertising Expense, etc. To learn more, see Explanation of Chart of Accounts.

generally accepted accounting principles (GAAP)

The general guidelines and principles, standards and detailed rules, plus industry practices that exist for financial reporting. Often referred to by its acronym GAAP.

going concern assumption

An accounting guideline which allows the readers of financial statements to assume that the company will continue on long enough to carry out its objectives and commitments. In other words, the accountants believe that the company will not liquidate in the near future. This assumption also provides some justification for accountants to follow the cost principle.

good output

A phrase used in standard costing. The production that is acceptable (not rejected products) and which is assigned manufacturing costs of direct materials, direct labor, and manufacturing overhead.

goodwill

Goodwill is a long-term asset categorized as an intangible asset. Goodwill arises when a company acquires another entire business. The amount of goodwill is the cost to purchase the business minus the fair market value of the tangible assets, the intangible assets that can be identified, and the liabilities obtained in the purchase. The amount in the Goodwill account will be adjusted to a smaller amount if there is impairment in the value of the acquired company as of a balance sheet date.

gross

The amount before deductions. For example, gross pay is the amount before withholding deductions. Gross sales are the amount before sales returns and allowances and sales discounts.

gross margin

A term that is sometimes used interchangeably with gross profit. Others use the term to mean the percentage of gross profit dollars divided by net sales dollars.

gross profit

Net sales revenues minus the cost of goods sold.

gross profit method of estimating inventory

To learn more, see Explanation of Inventory & Cost of Goods Sold.

gross profit percentage

Dollars of gross profit dollars divided by the dollars of net sales. Also known as gross margin.

gross profit ratio

gross profit percentage.

gross salaries

An employee's pretax compensation that is based on annual or monthly amounts rather than an hourly rate. Management employees are usually paid salaries. To learn more, see Explanation of Payroll Accounting

gross sales

Sales before deducting sales returns, sales allowances, and sales discounts.

gross wages

An employee's pretax compensation based on hours worked times an hourly rate of pay. Production workers and no management employees are usually paid wages. To learn more, see Explanation of Payroll Accounting