Glossary of Accounting Terms

All A B C D E F G H I J K L M N O P Q R S T U V W Y Z

Index of Accounting Terms - P

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Icon representing employee payments
Payroll Related Terms: Wages, Salaries, Employee Compensation What is Payroll? Simplify payroll processing and ensure compliance.
Icon representing taxes related to employee wages
Payroll Tax Related Terms: Employment Tax, Wage Tax, Withholding Tax What is Payroll Tax? Taxes imposed on wages and salaries that employers are required to withhold and remit.
Perceived Value icon representing customer's subjective worth assessment of products or services
Perceived Value Related Terms: Customer Value, Pricing Strategies, Value-Based Pricing, Marketing, Consumer Behavior How does a customer's Perceived Value influence their purchasing decisions? Understand this marketing concept referring to a customer's own evaluation of a product or service's worth and its ability to meet their needs compared to its price. This subjective assessment is a key factor in pricing strategies and consumer behavior, impacting sales and profitability.
Performance Ratios icon representing metrics for business operational effectiveness and financial health
Performance Ratios Related Terms: Financial Ratios, Efficiency Ratios, Profitability Ratios, Growth Ratios, Key Performance Indicators (KPIs), Business Analysis How are Performance Ratios utilized to gauge a business's operational effectiveness? Explore these key financial metrics that assess various aspects of a company's performance, such as efficiency, profitability, and growth. Analyzing performance ratios provides valuable insights into a business's strengths and weaknesses, aiding in strategic decision-making and performance improvement for overall business success.
Icon representing expenses tied to a specific time period.
Period Costs Related Terms: Operating Expenses (many are period costs), Selling, General & Administrative (SG&A) Expenses What are Period Costs? Expenses that are not directly tied to product production and are reported on the income statement in the period they are incurred (e.g., administrative salaries, rent, marketing).
Prepaid Expense icon representing costs paid ahead for future use in business operations
Prepaid Expense Related Terms: Deferred Expense, Accrual Accounting, Matching Principle, Prepaid Costs, Advance Payments, Balance Sheet Accounts What is a Prepaid Expense? A balance sheet asset representing costs paid in advance for goods or services that will be used or consumed in a future accounting period, such as prepaid rent, insurance, or subscriptions. This accounting treatment aligns with accrual accounting principles, ensuring expenses are recognized when the related benefit is received.
Icon representing a maximum price limit
Price Ceiling Related Terms: Maximum Price, Price Control What is a Price Ceiling? A government-imposed limit on how high a price can be charged for a product or service.
Pricing Strategies Icon representing methods for setting prices
Pricing Strategies Related Terms: Cost-Plus Pricing, Value-Based Pricing, Profitability, Revenue, Costs Pricing Strategies outline the diverse methods businesses employ to set optimal prices for products or services, balancing costs, value, competition, and market objectives to maximize profitability and market share.
Pricing Strategies - Competitive Pricing Icon representing market-based pricing approaches
Pricing Strategies - Competitive Pricing Related Terms: Pricing Strategies, Market Analysis, Product Positioning, Price Wars What is Competitive Pricing? A strategy setting prices based on competitors' prices rather than solely on costs or customer perceived value.
Pricing Strategies - Cost-Plus Pricing Icon highlighting markup on costs
Pricing Strategies - Cost-Plus Pricing Related Terms: Pricing Strategies, Costs, Fixed Costs, Variable Costs, Profit Margin What is Cost-Plus Pricing? A method where a fixed percentage (markup) is added to the total cost of producing a product or service to determine its selling price.
Pricing Strategies - Economy Pricing Icon representing low-cost offerings
Pricing Strategies - Economy Pricing Related Terms: Pricing Strategies, Cost Control, Target Market, Sales Volume What is Economy Pricing? A strategy targeting price-sensitive customers by offering basic products or services at minimal cost with low profit margins, relying on high volume.
Pricing Strategies - Penetration Pricing Icon showing market entry strategy
Pricing Strategies - Penetration Pricing Related Terms: Pricing Strategies, Market Share, New Product Launch, Competitive Advantage What is Penetration Pricing? A strategy involving setting a low initial price for a new product or service to quickly attract customers and gain market share.
Pricing Strategies - Premium Pricing Icon for high-value products
Pricing Strategies - Premium Pricing Related Terms: Pricing Strategies, Brand Equity, Target Market, Perceived Value What is Premium Pricing? A strategy setting a high price for products or services perceived as high quality, exclusive, or luxurious to target less price-sensitive customers.
Pricing Strategies - Price Skimming Icon for new product pricing
Pricing Strategies - Price Skimming Related Terms: Pricing Strategies, New Product Launch, Product Life Cycle, Innovation What is Price Skimming? A strategy setting a high initial price for a new, innovative product to maximize revenue from early adopters before gradually lowering it.
Pricing Strategies - Value-Based Pricing Icon focused on customer perception
Pricing Strategies - Value-Based Pricing Related Terms: Pricing Strategies, Customer Value, Perceived Value, Market Segmentation What is Value-Based Pricing? A strategy setting prices primarily based on a product's or service's perceived value to the customer, rather than on its cost or competitors' prices.
Icon representing earnings or financial gain
Profit Related Terms: Earnings, Income, Gain, Net Income What is Profit? The financial gain realized when revenue exceeds the total expenses, costs, and taxes.
Icon representing a report of revenues and expenses
Profit & Loss (P&L) Statement Related Terms: Income Statement, Statement of Earnings What is a Profit & Loss (P&L) Statement? A financial statement that summarizes a company's revenues, costs, and expenses over a specific period to determine its profit or loss.
Icon representing the percentage of profit relative to revenue
Profit Margin Related Terms: Net Profit Margin, Gross Profit Margin, Return on Sales (ROS) What is Profit Margin? A ratio that measures a company's profitability by dividing its profit (net or gross) by its revenue, expressed as a percentage.
Profitability icon representing a business's ability to generate profit and financial gain
Profitability Related Terms: Profit, Net Income, Revenue, Expenses, Profit Margin, Profitability Ratios, Financial Performance What signifies a business's Profitability and how is it assessed? Explore the degree to which a business or activity yields a financial gain or profit, which is crucial for its sustainability and growth. Profitability is typically analyzed using key financial statements and ratios to understand a company's earning capacity and overall financial health.
Icon representing profitability ratios analysis.
Profitability Ratios Related Terms: Gross Profit Margin, Net Profit Margin, Operating Profit Margin, Return on Assets (ROA), Return on Equity (ROE) What are Profitability Ratios? Financial metrics used to assess a business's ability to generate earnings relative to revenue, operating costs, balance sheet assets, or equity.

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