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accounting
Accounting
| Term | Definition |
|---|---|
| accounting equation | Assets=liabilities+Capital |
| Accounts payable | money owed for credit purchases |
| Accounts receivable | the amount owed by customers |
| Assets | things owned, such as cash and buildings |
| Balance sheet | a financial statement that lists the assets, liabilities, and capital of a business |
| Bank | an institution that accepts demand deposits and makes commercial loans |
| Bond | a long-term written promise to pay a definite sum of money at a specified time |
| Bonding | provides payment of damages to people who have losses resulting from the negligence or dishonesty of an employee or from the failure of the business to complete a contract |
| Book value | the value of a share of stock that is found by dividing the net worth (assets minus liabilities) of the corporation by the total number of shares out stand |
| budget | a financial plan extending usually for one year |
| Capacity | earning power |
| Capital | what a business is worth after subtracting liabilities from assets |
| Certificate of Deposit (CD) | a savings account that requires an investor to deposit a specified sum for a fixed period at a fixed interest rate |
| Character | an indication of one's moral obligation to pay debts |
| Check | a written order on a financial institution to pay previously money to a third party on demand |
| Collateral | property a borrower pledges to assure repayment of a loan |
| Commercial loan | a loan made to a business |
| Common stock | ownership that gives holders the right to participate in managing the business by having voting privileges and by sharing in the profits (dividends) if there are any |
| Conditions | factors related to the economy and other matters, such as the economic health of an community or nation and the extend of business competition that affects credit decisions |
| Direct deposit | allows business to electronically transfer employees' paychecks directly from the employer's bank account to employees' bank accounts |
| Disability deposit | offers payments to employees who are no longer able to work because of accidents or illnesses |
| Electronic Fund Transfer (EFT) | transferring money by computer rather than by check |
| Endorsement | the signature--usually on the back --that transfers a negotiable instrument |
| Equity capital | money invested in the business by its owner or owners |
| Financial statements | reports that summarize financial data over a period of time |
| Health insurance | provides protection against the expenses of health care |
| Income statement | a financial document that reports total revenue and expenses for a specific period |
| Initial Public Offering (IPO) | the first time a company sells stock to the public |
| installment credit | credit used when a customer makes a sizable purchase and agrees to make payments over an extended but fixed period of time |
| Insurance | a risk management tool that limits financial loss from uncontrollable events in exchange for regular payments |
| Investment companies | an organization that specializes in the sale of a variety of stocks, bonds, and other securities |
| Liabilities | claims against assets or things owed; the debts of a business |
| Liabilities insurance | provides protection for risks involved in operating a business |
| Life insurance | provides money that is paid upon the death of the insured to a person or people identified in the insurance policy |
| Malpractice insurance | a type of liability insurance that protects against financial loss arising from suits for negligence in providing professional services |
| Market value | the value at which stock is bought and sold on any given day |
| No-fault insurance | each insurance company is required to pay the losses of its insured when an accident occurs, regardless of who might have been responsible for the loss |
| Non-bank financial institution | an institution that offers on demand deposits or commercial loans, but not both |
| Preferred stock | ownership that gives holders preference over the common stockholders when distributing dividends or assets |
| Prime rate | the lowest rate of interest; the rate at which large banks loan large sums to the best-qualified borrowers |
| Promissory note | an unconditional written promise to pay a certain sum of money, at a particular time or demand, to the order of one who has obtained |
| Risk | the uncertainty that a loss may occur |
| Savings account | an account that allows customers to make deposits, earn interest, and make withdrawals at any time without financial penalties |
| Secured loan | a loan that requires the borrower to pledge something the value as security |
| Securities | stock and bonds |
| Smart card | a credit and debit card with a memory that stores financial, health, credit, and other kinds of data that can be read by computers |
| Stock | a share of ownership in corporation |
| Stockbroker | a professional who buys and sells corporate securities for customers through a stock brokerage firm and gives investment advice |
| Unsecured loan | a loan that is not backed by collateral |
| Venture capitalist | an investor or investment group that lends large sum of money to promising, new, or expanding small companies |
| Working capital |
Created by:
michael.childers
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