As she unearned revenue navigates through the world of numbers, knowing the difference keeps things clear and precise. The cardinal number is automatically recognized when using M or MM in accounting. Even if you have a significant figure to represent, such as 12 billion, you could still write it as 1200MM, which would be understood. If you see “one quintillion,” you know that it’s a lot – and have spatial awareness of what it represents. This methodology differs from everyday slang, which takes the first letter from each word as the primary abbreviation.
Decoding Million Abbreviations: Understanding ‘M’ vs. ‘MM’
ROA (Return on assets) A measure of how profitable a company is relative to its total assets. RCS (Accounting abbreviation for reclass) – In accounting, a reclass or reclassification is an entry in the journal that moves money from one general ledger account to another. PAT (Profit after tax) – A business’s total amount of earnings after all its taxes are deducted. OE (Equity and owner’s equity) – The difference between equity and debt is that equity investment is a loan to the company in exchange for an ownership interest. The owner’s stake in the firm is usually expressed as a percentage of stock.
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- AP (Abbreviation for accounts payable) – A liability account on a company’s balance sheet representing money the company owes to its suppliers.
- Use caution and always consult your accountant, lawyer or professional advisor before acting on this or any information related to a lifestyle change or your business or finances.
- You may also find it helpful to review measurement abbreviations for common units.
- AR (Accounts receivable abbreviation) – An asset account on a company’s balance sheet representing money the company is owed by its customers.
- While accounting is all about numbers, they are not the only thing that matters to keeping your books in order.
- C (Cash flow) – The amount of money or cost generated due to company activities (sales, manufacturing, etc.) over time.
- NAPA (The National Association of Public Accountants) – A professional association representing public accountants’ interests in the United States.
Because we have multiple options to choose from when selecting an abbreviation, it is important to use context to make the proper selection. It was first created in India, and from there, it progressively spread to Arabia and China. I have had the same dilemma and come to the conclusion that using k for thousands and MM for millions is a reasonable and pragmatic thing to do. If K and MM are used, it’s bad style because the symbols are being mixed up. But if M and MM are used, non-experts might not even be aware that M is a symbol for thousands and get confused.
Accounting Abbreviations
- This methodology differs from everyday slang, which takes the first letter from each word as the primary abbreviation.
- You can see it on ancient French and British ledgers from the 18th and 19th centuries where “M₤” represents £1000 and “MM₤” is £1million.
- Thus, we’re left with k and MM as to unambiguous ways to denote thousands and millions respectively.
- While you can make MM stand for millions of anything, it’s important that the reader knows whether you’re talking about dollars, euros, units shipped, etc.
- Today, MM remains the standard abbreviation for millions throughout the banking and accounting professions.
- BO (Business organization) – The term refers to a company, partnership, or sole proprietorship.
This practice was across the board – exam reports, internal reporting, and so on. REIT (Real estate investment trust) A company that owns and operates a portfolio of real estate assets. NAPA (The National mm in accounting Association of Public Accountants) – A professional association representing public accountants’ interests in the United States. AVA (Asset value adjustment) – A non-cash adjustment to a company’s balance sheet used to reflect the estimated fair value of its assets. The account abbreviation may also refer to a specific contract between two businesses. Later on, the rise of typewriters and early digital spreadsheets continued this practice of using M and MM abbreviations.
What is Credit Utilization Ratio and Why is It Important?
You’ll find that a lot of UK native speakers won’t even know what “mm” stands for (outside of the “millimeter” measurement that is abbreviated to “mm”). While the fields of accounting, banking and finance have adopted the Roman tradition, other fields such as computer programming and the high-tech industry have adopted Greek-influenced abbreviations. As we mix our traditions, it sometimes becomes difficult to know what someone intends to convey expressing thousands or millions in an abbreviation. Agents will also commonly see us communicate M as thousands when we quote surety rates or agent commissions. P&L (Profit and loss) – One of the financial statement abbreviations, this one shows how much money a company has earned (profit) or lost (loss) during a specific period. Note that there is a difference between accounting profit and economic profit.
