Accounting Chapter 12 Vocabulary

401(k)

A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis.

Accumulated Earnings

An accounting term applicable to stockholders of closely held businesses. Accumulated earnings and profits are a company's net profits after deducting distributions to the stockholders.

Overtime Rate

a calculation of hours worked by a worker that exceed those hours defined for a standard workweek.

Time Card

a card used to record an employee's starting and quitting times, usually stamped by a time clock.

Wage

a fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.

Salary

a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.

Payroll Register

a hard copy or electronic spreadsheet listing important employee payroll information for specific payroll periods. Extended Definition. A payroll register helps employers keep track of employee payroll information conveniently.

Gross Earnings

an accounting convention, referring to the amount of initial profit left over from total revenues for a specified time period, once cost of goods sold have been deducted.

Deduction

an amount that is or may be deducted from something, especially from taxable income or tax to be paid.

Commission

give an order for or authorize the production of (something such as a building, piece of equipment, or work of art).

Payroll Clerk

is a person employed to administer the payment of wages to employees.

Pay Period

recurring length of time over which employee time is recorded and paid (e.g., weekly, bi-weekly, semi-monthly, monthly). Extended Definition. Also known as payroll frequency, pay frequency, payroll period, and payroll schedule.

Net Pay

the amount of wages that employees actually take home. In other words, net pay is the amount of money on each employee paycheck. Employers deduct many different amounts from employee wages every pay period.

Direct Deposit

the electronic transfer of a payment directly from the account of the payer to the recipient's account.

Exemption

the process of exempting a person from paying taxes on a specified amount of income for themselves and their dependents

Payroll

the total amount of wages and salaries paid by a company to its employees