predefined recovery periods and percentages.
maker: A person (entity) who signs a note to borrow money and who assumes responsibility to pay the note at maturity.
management accounting: The area of accounting concerned with providing internal financial reports to assist
management in making decisions.
marital deduction: Under federal estate and gift tax law, there is an unlimited marital deduction. This means that a
person can transfer any amount of assets to his or her spouse either while alive or via an estate without concern for gift or
estate taxes. (In the case of a noncitizen spouse there is a "limited" marital deduction.)
Market Adjustment-Trading Securities account: An account used to track the difference between the historical cost
and the market value of a company's portfolio of trading securities.
markup: The amount added to the purchase price to arrive at the selling price, usually expressed as a percentage. A
markup is usually expressed as a percentage of cost and a profit margin is compared to the selling price. Hence, a
markup of 100% is a 50% profit margin.
matching principle: The concept that all costs and expenses incurred in generating revenues must be recognized in the
same reporting period as the related revenues.
materiality: This is usually a value judgment to determine if the dollar value of an item when included or excluded would
affect the fairness of financial statements. A $10,000 item might be material in the financial statements of a locally owned
business, but immaterial on the statements of a national corporation.
maturity date: The date on which a note or other obligation becomes due.
maturity value: The amount of an obligation to be collected or paid at maturity; equal to principal plus any interest.
mechanic's lien: A lien against property, created under state law, to protect the financial interests of those who provided
material or labor to construct a building or facility.
median (middle): This is the central number in a list of items. For example, 2, 4, 7, 8, and 9 have a median of 7.
medical savings account: A medical savings account (MSA) is a tax-favored method of paying for unreimbursed
medical expenses. Your contributions to a MSA are tax-deductible. To be eligible for an MSA, you must be covered under
a high-deductible health plan, and you must work for a small company or be self-employed.
Medicaid: Medicaid became law in 1965 as a jointly funded cooperative venture between the federal and state
governments to assist states in providing adequate medical care to eligible, needy persons.
Medicare: The Medicare program funds the federal health program for people age 65 and over. It helps people at a time
in their lives when they may have health problems but not a lot of money. Employers, employees, and self-employed
individuals fund the system through payroll tax.
merger: The acquisition of one company by another company whereby the companies combine as one legal entity, with
the acquired company going out of existence.
minority interest: The interest owned in a subsidiary by stockholders other than those of the parent company; occurs
when the acquiring company has less than a 100 percent ownership interest.
modified accelerated cost recovery system (MACRS): IRS regulations that allocate the cost of an asset according to
predefined recovery periods and percentages.
monetary measurement: The idea that money, as the common medium of exchange, is the accounting unit of
measurement, and that only economic activities measurable in monetary terms are included in the accounting model.
mortality table: A table used to estimate the life expectancy of men and women in a certain age groups.
mortgage: It's most common use is as a lien on real estate. When more than one mortgage is recorded against a piece
of property, they are listed by order of recording and referred to as first mortgage, second mortgage, etc.
mortgage amortization schedule: A schedule that shows the breakdown between interest and principal for each
payment over the life of a mortgage.
mortgage payable: A written promise to pay a stated amount of money at one or more specified future dates; a
mortgage is secured by the pledging of certain assets, usually real estate, as collateral.
mortgagee: The person or institution that is lending the money on the property.
mortgagor: The one who is borrowing the money that creates the mortgage.
moving average: A perpetual inventory cost flow alternative whereby the cost of goods sold and the cost of ending
inventory are determined by using a weighted-average cost of all merchandise on hand after each purchase.
multiple support agreement: An agreement signed by those providing support for a dependent to allow one of the
group to claim the dependent exemption on his or her income tax return. For example, if you and your siblings collectively
pay more than half the support for your parent or parents, any one of you who pays more than 10% can claim your parent
(s) if the others sign a multiple support agreement.
mutual agency: The right of all partners in a partnership to act as agents for the normal business operations of the
partnership, with the authority to bind it to a business agreements.
