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general expense
Expenses that have to do with the overall operation of a business and that generally do not vary with the sales volume. Examples: building rent, utilities, insurance, property tax, and office supplies.
See also variable expense and direct cost.


general journal
A journal for recording transactions that are infrequent or unusual, such as depreciation and adjustments to accounts. Contrasted with frequent entries, such as sales, that are entered in a Sales journal.
See also journal and adjusting journal entries.


general ledger
The result of recording the summary of financial information from journals (books of original entry). The individual account balances from which financial statements are prepared. Examples of general ledger accounts: cash in bank, furniture and equipment, bank loan, and owner's equity. Figures on financial statements can be traced to a ledger account and from there to a journal and finally to the original documents.


general obligation bond
A municipal bond that is backed by the full faith and credit of the issuing authority, rather than by the revenue from a specific project.


generation skipping transfer tax (GST)
This is the third tax in the "transfer" of assets. The gift tax and estate tax form the other two. The GST is intended to keep people from cutting gift and estate taxes by transferring assets to people who are two generations or more younger than they are (in other words, skipping a generation or more). The rules are very complex. Contact us; we will be happy to discuss the details with you.


gift
A transfer of money or property from one person to another without payment or exchange of other property. For income tax purposes, a gift to qualified charities creates a tax deduction. A gift to an individual is not tax-deductible by the one who makes it (donor), and a gift is not taxable income to the person who receives it (donee).


gift-splitting
To treat a gift made by one spouse as though it was made by both spouses. The object is to increase the amount that can be given to a third party without creating a gift tax.


gift tax (exclusion)
Gifts to individuals may be subject to gift tax. However, the tax law allows for an exclusion of $10,000 (indexed annually for inflation) per year for gifts from one person to another person. This means that a married couple could each give a child $10,000. And, if the child is married, they could each give the child's spouse $10,000 for a total annual gift to the couple of $40,000. In addition to the annual exclusion there is a once-in-a-lifetime exclusion for making even larger gifts.


Ginnie Mae (GNMA)
Government National Mortgage Association. GNMA packages mortgages for resale to investors. The securities are backed by the U.S. government which makes them among the safest of investments.


going-concern value
The value of a business and its assets in an ongoing operation as opposed to the book value of the individual assets themselves. The value of a going business versus the value of one in liquidation.
See also liquidation value.


goodwill
The value of a business in excess of its book value. The reputation earned by a business for delivering excellent goods and services, thereby creating more business and a higher value than one would expect in a newly established business.


gross profit
Sales less the cost of the items sold. For example: if you purchase an item for $60 and sell it for $100, your gross profit is $40 (40% gross profit).
See also net income.


guarantor
The one who agrees to perform (pay the debt) when the one who made the commitment (borrowed the money) fails to do so. A guarantor is often required by financial lenders when the borrower does not have adequate collateral or has a poor or unknown credit history.
 

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