Paid-In Capital The capital acquired from shareholders.
Paper Hanger Individuals hired to place numerous orders for a scam business.
Paper Profit 1. A potential not yet realized;

2. An asset that has increased in value on which profit may be taken in a future sale.
Par The monetary amount printed on the stock certificate.
Par Value Face value. The par value of stocks and bonds on the date of issuance is the principal.
Parent Company The company owning the majority of the voting stock of another corporation.
Pareto Optimal A change in the status quo that makes at least one person better off, while making no one else worse off.
Pari Delicto The fault or blame is shared equally.
Pari Materia Related to the same matter or subject. Statutes and covenants concerning the same subject matter, for the purpose of ascertaining their meaning, are construed together.
Pari Passu At an equal rate or pace.
Parole Evidence Legal proof based on oral statements; with regard to a document, any evidence extrinsic to the document itself.
Partial Payment An incomplete or on account payment. A payment not in full for the amount owed.
Participative Leadership Style Characterized by the manager involving the subordinates in the decision.
Partition Court proceeding brought by an interested party requesting that the court divide real property among respective owners as their interest appear.
Partnership An association of two or more people who are co-owners of a business for profit.
Partnership Agreement The formal written contract creating a partnership
Party A person who has engaged in a transaction or made an agreement within the scope of the Uniform Commercial Code.
Past Due Payment delayed beyond an agreed upon time for settlement. An account receivable note or other indebtedness not paid when due.
Patent A legal right allowing an inventor to exclude others from making, using, or selling an invention, a design or a plant for a stated length of time.
Patent Ambiguity An obvious uncertainty in a written instrument.
Path-Goal Theory The theory that a leader's behavior is acceptable to subordinates insofar as they view it as a source of either immediate or future satisfaction.
Pay Compression Occurs when pay differences between individuals becomes small.
Pay Grades Used to group together individual jobs having approximately the same job worth.
Pay-Down Period The pay-down period is a condition where a borrower must be debt free of the bank for a period of generally 30 to 60 days. Its purpose is to safeguard the bank against a credit line being renewed by the customer without reducing its exposure.
Payables Money owed by a company. Money is typically owed to trade suppliers, employees, taxes, and banks.
Payback Period The length of time that will pass until the net benefit of the project becomes positive.
Payee The individual that an instrument is payable to.
Payer Bank Under Article 4 Bank Deposits And Collections, a bank by which an item is payable as drawn or accepted.
Payment Pattern Analysis A measure that compares the patterns that a customer develops or follows when paying their invoices.
Payout Ratio Common stock dividend, divided by net income. It is a measure of the percentage of income paid out as dividends.
Payroll The total amount paid to employees for a certain period.
Payroll Register A multi-column form used to assemble and summarize payroll data at the end of each payroll period.
Penal Bond A bond given by an accused, or by another on his behalf, for the payment of money if the accused fails to appear in court on a certain day.
Penetration Pricing Introducing the product at a low price intended to capture the mass market for the product or service.
Pension Plan A program to provide a retirement income to workers by holding a percentage of their income in reserve.
Per Capita In the law of descent and distribution this term is used to indicate the right of descendants to take shares equally as members of a class who have the same relationship with one another.
Per Curiam A term generally used to denote the opinion or decision of the court as a whole rather than a single judge.
Per Se By itself. Thus, a contract clause may be inherently unconscionable per se.
Per Stirpes In the law of descent and distribution, this term is used to indicate the right of descendants to take shares by representation of a deceased parent.
Percent Change Analysis An analysis which focuses on the differences in year-to-year results. Allows a firm to track changes in key income statement or balance sheet accounts from one reporting period to the next. Useful in diagnosing key problem areas relative to specific balance sheet and income statement accounts.
Percentage-of-Completion Method The method of recognizing revenue from long term contracts over the entire life of the contract.
Peremptory Challenge An objection raised by a party to a law suit who rejects a person serving as a juror.
Perestroika The restructuring of what had been the Soviet economy to promote more decentralization, less bureaucracy, and greater individual incentives.
Perfect To complete recording or filing of a security interest in order to establish a lien or priority ownership.
Perfect Competition A market structure in which there are large numbers of fully informed buyers and sellers of a homogeneous product and there are no obstacles to entry or exit of firms into the market.
Perfection The proper recording or filing of an instrument, thereby giving notice to the world; usually applied to the perfecting of a security interest under the UCC.
Performance Appraisal The evaluation of an individual's work performance in order to arrive at objective personnel decisions.
Performance Bond Insurance that guarantees that a contract will be completed.
Performance Measures Specific indicators used to evaluate how well a person, organization, or a system is operating. Although various measures may be debated as to the effect of a variety of biases, it is critically important to measure consistently using fixed techniques. Sometimes a bias can be neutralized by broadening the scope of the measurement. E.g., to lessen the impact of sales peaks and valleys on collection performance measures, many companies use a rolling 12 month sales rather than measuring each stand alone month or quarter.
Periodic Inventory System A system of inventory accounting in which only the revenue from sales is recorded each time a sale is made. The cost of merchandise on hand at the end of a period is determined by a detailed listing (physical inventory) of the merchandise on hand.
Peripherals Any input, output, and secondary storage devices of a computer system, typically considered to be options separate from the computer itself.
Perjury False swearing upon an oath properly administered in some judicial proceedings.
Perpetual Inventory System A system of inventory accounting in which both the revenue from sales and the cost of merchandise sold are reported each time a sale is made, so that the records continually disclose the amount of the inventory on hand.
Perquisites (Perks) Special benefits for executives that are usually non-cash items.
Personal Computer (PC) A single-user computer that sits on a desktop or can be carried around by the user.
Personal Guarantee An agreement to make oneself liable or responsible to another for the payment of a debt, default or performance of a duty by a third party.
Personal Opinion (PO) A credit analyst's own assessment of an account. Regardless of the recommendations of the agency for whom the analyst may be working.
Personal Property The rights, powers and privileges a person has in movable things, such as chattels and the right one person has to recover money or property from another by a judicial proceeding.
Personal Representative The administrator or executor of a deceased person or the guardian of a child or the conservator of an incompetent.
Personal Service The sheriff personally delivers a service of process to the defendant.
Pert Network A flow-chart-like diagram showing the sequence of activities needed to complete a project and the time or cost associated with each.
Petition in Bankruptcy A document filed voluntarily in court by a debtor to declare oneself a bankrupt. This form may also be filed by creditors asking that the debtor be declared bankrupt involuntarily.
Petty Cash Fund A special cash fund used to pay relatively small amounts.
Phillips Curve A curve showing possible combinations of the inflation rate and the unemployment rate, given the expected price level.
Physical Inventory The detailed listing of merchandise on hand.
Picosecond One trillionth of a second.
Piece-Rate System One in which an employee is paid for each unit of production.
Piercing the Corporate Veil Legal action taken by a creditor where fraud or unjust enrichment may be involved, to hold the principals of the corporation (or other entities) liable for the debts of the corporation.
Pilot Implementation A trial implementation with a small group of users.
Plaintiff In an action at law, the complaining party or the one who commences that action.
Plan of Reorganization The debtor in an involuntary case, has 120 days after the order for relief to file a plan of reorganization. After 120 days, without an extension being granted, creditors may file their plan of reorganization for the debtor. The plan must deal with all of the debts and obligations of the debtor and provide reasonable means for carrying out the plan.
Planning 1. The management function that establishes organizational goals or objectives and creates the means for accomplishing them;

2. Includes defining goals, establishing strategy, and developing designs to coordinate activities.
Plant and Equipment Sometimes called fixed assets; an asset category that includes land and expensive manufactured items that a company will use in its operation for several years.
Plant Assets Tangible assets that are owned by a business, are permanent or have a long life, and are used in the business.
Plea An allegation or answer in a court proceeding.
Pleading Process by which the parties in a lawsuit arrive at an issue.
Pledge Personal property, as security for a debt or obligation, deposited or placed with a person called a pledgee.
Point-of-Sale Method The method of recognizing revenue, whereby the revenue is determined to be realized at the time that title passes to the buyer.
Policy A plan that describes how a question or subject should be addressed; it establishes parameters for making decisions.
Polling-of-Interest Method A method of accounting for an affiliation of two corporations resulting from an exchange of voting stock of one corporation for substantially all the voting stock of the other corporation.
Ponzi Scheme When the organizers of the scheme use the assets of new investors to make profit payments to the old investors. The scheme typically has no other source of revenue other than from the new investors. Ponzi schemes, often called pyramid schemes, progress geometrically until they reach the point that the operators cannot find enough recruits (victims) to continue the payout. A bust out is a form of a ponzi scheme whereby the suppliers are like the investors, and the bust out (ponzi) scheme continually uses its new debt to pay old debt, building a "house of cards," which must ultimately collapse.
Portfolio Analysis A technique of analyzing an entire A/R portfolio based on segregating customers into classifications such as by risk. This method presents a macro picture of the risks inherent in the portfolio to help drive fundamental credit extension, collection, and customer related decisions.
Positive Economic Statement A statement that can be proved or disproved by reference to facts.
Positive Reinforcement Occurs when a person works to receive a desired reward.
Positive-Sum Game A game in which total winnings exceed total losses.
Possession The method recognized by law and used by oneself or by another to hold, detain, or control either personal or real property, thereby excluding others from holding or controlling such property.
Post Dated Check A collection devise used most frequently during difficult economic conditions.
Post Retirement Benefits Rights to benefits that employees earn during their term of employment for themselves and their dependents after they retire.
Post-Closing Trial Balance A trial balance after all of the temporary accounts have been closed.
Post-Implementation Audit The retrospective look at system development, implementation, and operations to see what can be learned from a project.
Posting The process of transferring debits and credits from the journal to the accounts.
Potential Output The economy's maximum sustainable output level, given the supply of resources, the state of technology, and the underlying economic institutions; the output level when there are no surprises about the price level.
Power of Attorney An instrument authorizing another to act as ones agent or attorney in fact.
Precedent A previously decided case that can serve as an authority in a present controversy.
Predatory Pricing Pricing tactics employed by a dominant firm to drive competitors out of business, such as temporally selling below cost and dropping the price only in certain markets.
Preemptive Right A shareholders right to purchase shares in a company's new stock issues in proportion with the existing shares that he or she owns, before the new shares are offered to the general public.
Preference When a trustee or debtor in possession proves that a transfer:

1. Of the debtor's assets were made;

2. Was made for the benefit of a creditor;

3. Was for or on account of an antecedent debt;

4. Was made while the debtor was insolvent;

5. Was made within 90 days of the petition for relief (one (1) year if the transfer is to an insider);

6. Gave the creditor more than the creditor would otherwise receive in a Chapter 7 liquidation.
Preferential Transfer A preference is a transfer of money or assets by a debtor, while insolvent, to one creditor for a past due debt, the effect of which is to give that creditor a greater portion of his claim than other creditors would receive on liquidation.
Preferred Creditor A creditor whose account takes legal preference for payment over the claims of others.
Preferred Provider Organization (PPO) A health-care provider that contracts with an employer or an employer group to provide health-care services to employees at competitive rates.
Preferred Stock 1. Stock that entitles the holder to dividends from earnings before the owners of common stock can receive a dividend;

2. A class of stock that has a prior or senior claim on assets to that of common stock.
Premium 1. Something of value given free or at a nominal charge as an incentive to buy a product;

2. The amount by which a bond's market price exceeds its market value;

3. A fee paid on an insurance policy.
Prepaid Expenses Purchased commodities or services that have not been used up at the end of an accounting period.
Preponderance Preponderance of the evidence means that evidence, in the judgment of the juror, is entitled to the greatest weight, appears to be more credible, has greater force, and overcomes not only the opposing presumptions, but also the opposing evidence.
Present Value The estimated present worth of an amount of cash to be received or paid in the future.
Present Value of an Annuity The sum of the present value of a series of equal cash flows to be received at fixed intervals.
Presenting Bank Under Article 4 Bank Deposits And Collections, this is any bank presenting an item except a payor bank.
Presentment Under Article 3 Commercial Paper, presentment is a demand for acceptance or payment made upon the maker, acceptor, drawee, or other payor by, or on behalf of, the holder.
Prestige Pricing Setting a price high to create the image of quality.
Presumption The trier of fact must find the existence of the fact presumed unless and until evidence is introduced that would support the findings of its nonexistence.
Pretax Income An analysis which focuses on operating results before income taxes have been deducted.
Price The exchange value of a product expressed in monetary terms.
Price Discounts Deductions allowed from the established price.
Price Discrimination Selling the same good for different prices to different consumers.
Price Elasticity of Demand A measure of the responsiveness of quantity demanded to a price change; the percentage change in quantity demanded divided by the percentage change in price.
Price Elasticity of Supply A measure of the responsiveness of quantity supplied to a price change; the percentage change in quantity supplied divided by the percentage change in price.
Price Leader A firm whose price and price changes are followed by the rest of the industry.
Price Level A composite measure reflecting the prices of all goods and services in the economy.
Price-Earnings Ratio The ratio, often called the P/E ratio, computed by dividing the market price per share of common stock at a specific date by the company's earnings per share on common stock.
Price-Level Index The ratio of the total cost of a group of commodities prevailing at a particular time to the total cost of the same group of commodities at an earlier based time.
Prima Facie Literally, at first view. Thus, that which first appears seems to be true.
Primary Activities The activities in an organization that are most directly related to creating value for the customer.
Primary Data Data that a company must gather itself or employ some other firm to gather; that cannot be looked up somewhere because no one has put them together before.
Primary Storage The computer's storage area for instructions and data currently being used by programs.
Prime Costs The combination of direct materials and direct labor costs.
Prime Rate of Interest A lower rate of interest than that charged to most borrowers. Given by commercial banks to their largest, most secure corporate borrowers.
Principal The person whom an agent represents.
Principal-Agent Problem Occurs when the agent's objectives differ from those of the principal and the agent can pursue actions.
Principle of Indemnity The policyholder cannot profit by insurance.
Prior-Period Adjustments Corrections of material errors related to a prior period or periods, excluded from the determination of net income.
Priority Claims The following claims have priority over unsecured claims: administrative expenses, unsecured claims arriving in the ordinary course of business after the filing, wage, salary and compensation claims earned within 90 days but not to exceed $2,000 for each individual, claims for contributions to employee benefit plans within 180 days before the filing, claims by individuals not to exceed $900, and claims of government units for taxes.
Private Branch Exchange (PBX) A special purpose computer that controls telephone switching at a company site.
Private Credit Credit for private use subdivided into bank credit, investment credit, agricultural credit, consumer credit and commercial credit.
Private Enterprise System An economic system where both the resources necessary for production and the businesses are owned by private individuals, not by public institutions like the government.
Private Placement A borrowing arrangement where the lender is not a bank. Typically insurance companies, trusts, pension funds or foundations represent these non-bank lenders.
Privatization The process of turning public enterprises into private enterprises.
Privilege A legal idea or concept of lesser significance than a right.
Privity Mutual and successive relationship to the same interest.
Pro Forma Financial Statements Financial statements that forecast expected sales, expenses, profits, and other financial data for a future accounting period.
Probability Theory The use of statistics to analyze past predictable patterns and to reduce risk in future plans.
Probate The act or process of proving a will or other instrument.
Problem A discrepancy between existing and a desired state of affairs.
Procedure A step-by-step, chronological instruction for carrying out a given policy.
Proceeds Whatever is received when collateral or assets are sold, exchanged, collected or otherwise disposed of.
Process In a court proceeding before or during the progress of the trial, an instrument issued by the court in the name of the state and under the seal of the court, directing an officer of the court to do, act, or cause some act to be done incidental to the trial.
Process Consultation Help given by an outside consultant to a manager in perceiving, understanding, and acting upon process events.
Process Control A quality control procedure in which sampling is done during the transformation process to determine whether the process itself is under control.
Process Cost System A type of cost accounting system that accumulates costs for each of the various processes within a manufacturing facility.
Process Departmentalization Grouping activities on the basis of product or customer flow.
Process Layout Arranging manufacturing components together according to similarity of function.
Process Mapping A clear and comprehensive picture of the way business is done. One of the steps of process redesigning.
Process Planning Determining how a product or service will be produced.
Processing Company A firm that converts natural resources into raw material.
Product Advertising Advertising intended to promote demand for a product or service.
Product Cost A concept used in applying the cost plus approach to product pricing in which only the costs of manufacturing the product are included in the cost amount to which the markup is added. The three components of manufacturing costs: direct materials, direct labor, and factory overhead costs.
Product Departmentalization Assembles the activities of creating, producing, and marketing each product into one department.
Product Differentiation Marketers attempt to have their product perceived by the consumer as different from other, similar products.
Product Diversion When a supplier stipulates its product to be sold in a specific geographical area or into a specific market and the seller deliberately sells the product outside of that area. Diversion can be either international or domestic.
Product Extension Merger A merger that extends the products of the acquiring company into a similar or related product but one which is not directly in competition with existing products.
Product Layout Arranging manufacturing components according to the progressive steps by which a product is made.
Product Liability Insurance Coverage that protects a firm against financial loss when a person files suit claiming they were injured by its product.
Product Life Cycle The succession of phases including the introduction, growth, maturity, and decline of a product in its market.
Production The business activity that uses people and machinery to convert materials and parts into salable products.
Production Control Coordinating the interaction of people, materials, and machinery so that products are made in the proper amounts at the required times to fill orders.
Production Management The job of coordinating and controlling all the activities required to make a product.
Production Orientation The number one priority is to produce goods to keep up with demand.
Production Plan A document that contains a list of material and equipment needed to manufacture a finished product that also specifies which operations will be performed in-house or out-of-house.
Production Possibilities Frontier A curve showing all alternative combinations of goods that can be produced when available resources can be used fully and efficiently.
Production Sharing A manufacturing process that integrates production operations along international lines; a company may assemble part of an item in one nation, ship it to another for further processing, and market the finished product in yet another country.
Productivity The overall output of goods and services produced, divided by the inputs needed to generate that output.
Profit The difference between a business's total revenue or sales receipts and the total of its production costs, operating expenses and taxes.
Profit Budget A budget used by separate units of an organization that combines revenue and expense budgets to determine the unit's profit contribution.
Profit Center A decentralized unit in which the manager has the responsibility and the authority to make decisions that affect both costs and revenues and thus profits.
Profit Margin A component of the rate of return on investment, computed as the ratio of controllable operating income to sales.
Profit Sharing Paying a portion of the company profits to employees as a performance incentive in addition to their regular compensation.
Profitability Ratios Used to measure how successfully a business earns a return on its investment.
Program A software element stored in the memory unit that feeds step-by-step instruction to the control unit, which then commands one of the other hardware units to perform whatever operation is needed.
Program Evaluation and Review Technique (PERT) A technique for scheduling complicated projects comprising many activities, some of which are interdependent.
Programmed Decision A repetitive decision that can be handled by a routine approach.
Project Plan A description of the project that divides it into sub-projects, including start and completion times, responsible parties, interdependence of work steps, and resources needed.
Promise Under Article 3 Commercial Paper, it is an undertaking to pay, and it must be more than an acknowledgment of an obligation.
Promissory Note A short-term financing instrument given by a debtor (called the promisor) to a creditor (called the promisee) as a legal and binding promise to pay a certain sum of money at a future date, usually with interest at a fixed rate.
Promotional Mix The correct blending of personal selling, advertising, publicity, and sales promotion.
Proof of Delivery (POD) A receipt showing date and place of delivery to consignee, and the signature of the person receiving the shipment.
Proofs of Claim A statement that a claim is justly due and owing, it shows the amount of the claim, the consideration, and what payments have been made. It must be in writing and signed by the creditor and his authorized agent.
Property All rights, powers, privileges, and immunities that one has concerning tangibles and intangibles. The term includes everything of value subject to ownership.
Property Damage Liability Motor vehicle insurance that pays for damage the insured vehicle does to the property of others.
Proprietorship A business owned and operated by an individual.
Prorata Cash Settlement The debtor proposes to settle with his creditors for less than the full amounts owed.
Prospecting The step in the selling process that identifies potential customers for a product.
Prospector A business-level strategy that seeks innovation by finding and exploiting new product and market opportunities.
Prospectus A document that presents a company's financial data for several consecutive years, discusses its position in its industry, describes how it will use the funds raised by a security sale, and summarizes other information that well informed investors should have.
Protected-Group Member An individual who falls within a group identified for protection under equal protection laws.
Protectionism An international trade philosophy that favors the creation of barriers against the importing of goods to shelter domestic industries from foreign competition.
Protest A formal document declaring the dishonor of a negotiable instrument.
Protocol The technical standard for linking devices or moving messages in electronic communication.
Proximate Cause The cause that sets other causes in operation. The responsible cause of an injury.
Proximo Terms A type of term that specifics payment in the month following shipment, e.g., "net 10th prox." terms require payment of all the months invoices on the tenth of the following month.
Proxy Authority to act for another, used by absent stockholders or members of legislative bodies to have their votes cast by others.
Psychological or Odd Pricing The seller selects as prices amounts that fall just below a major psychological threshold. E.g., $99.99 rather than $100.00.
Public Accounting The profession whose members render accounting services on a fee basis.
Public Credit Credit for public use. It includes all grants of credit to units of government, to states and municipalities as well as to the federal government.
Public Goods Goods that are available for all to consume regardless of who pays and who does not pay.
Public Liability Insurance Insurance that covers financial loss caused by an injury to a non-employee that results from the business's negligence and that occurs on its premises.
Publicity Non-paid, non-personal communication to promote the products, services, or image of the company.
Pull Strategy A strategy aimed at the consumer. The intention is for the consumer to demand that a product be available in the distribution channel.
Punitive Damages Damages by way of punishment allowed for an injury caused by a wrong that is willful and malicious.
Purchase Includes taking by sale, discount, negotiation, mortgage, pledge, lien, issue or re-issue, gift, or any other voluntary transaction creating an interest in property.
Purchase Discounts An available discount taken by a buyer for early payment of an invoice.
Purchase Journal The journal in which all items purchased on account are recorded.
Purchase Method The accounting method employed when a parent company acquires a controlling share of the voting stock of a subsidiary by a means other than by the exchange of voting common stock.
Purchase Order A document generated from a buyer stipulating exactly the merchandise or service to be transacted, by quantity, stock keeping unit (SKU), and price. It should also contain terms by which the sale will occur.
Purchase Requisition The form or electronic transmission used to inform the purchasing department that purchased items or services are needed for a business purpose.
Purchase-Money Security Interest 1. A security interest that is taken or retained by the seller of the collateral to secure all or part of its price;

2. Taken by a person who, by making advances or incurring an obligation, gives value to enable the debtor to acquire rights in, or the use of, collateral if such value is in fact so used.
Purchases Returns and Allowances Reductions in purchases, resulting from merchandise being returned to the seller or from the seller's reduction in the original purchase price.
Purchasing Agent A company's in-house expert on where to buy various products.
Purchasing Procedure A series of steps that a company follows when buying products.
Pure Capitalism An economic system characterized by private ownership of resources and the use of prices to coordinate economic activity in free competitive markets.
Pure Capitalism or Market Economy An economic system in which economic decisions are made freely according to the market forces of supply and demand.
Pure Risk A situation that can only become a loss.
Push Money

("Spiffs")
A manufacturer's commission paid to salespeople for selling one particular brand over all others.
Push Strategy A strategy directed at the members of the marketing channel rather than the consumer.
Pyramid Scheme When the organizers of the scheme use the assets of new investors to make profit payments to the old investors. The scheme typically has no other source of revenue other than from the new investors. Pyramid schemes, often called ponzi schemes, progress geometrically until they reach the point that the operators cannot find enough recruits (victims) to continue the payout. A bust out is a form of a pyramid scheme whereby the suppliers are like the investors, and the bust out (pyramid) scheme continually uses its new debt to pay old debt, building a "house of cards," which must, ultimately, collapse.