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GLOSSARY OF TERMS
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GLOSSARY OF TERMS
A B C D EF GH I JKL MN OP QR ST UVWXYZ
Canceled Check
A check that as cleared the bank and is returned to the depositor with his monthly statement.
A limit on how much the interest rate can change either at each adjustment or during the life of the mortgage, e.g., "2/6" equates to 2% per year and 6% over life of loan.
Interest of the owner in the business that is the difference between Assets & Liabilities. Also called Equity or Networth. In a corporation, capital represents the stockholders’ equity.
Assets, of either a tangible or intangible nature, owned or held by a business which are expected to be used or held over several fiscal periods.
Profit or gain realized from the sale or exchange of a capital asset. The amount is determined by calculating the difference between an asset’s purchase and sale price.
See Stock and Authorized stock.
A method of accounting in which no transactions are entered for income until cash is actually received, and no entries are made for expenses until cash is actually paid.
A document issued by the proper state authority to a foreign corporation granting the corporation the right to do business in that state.
Evidence that the holder has deposited at a financial institution a certain amount of money for a certain period of time. By issuing a CD, a financial institution pledges to redeem the certificate at maturity and pay a certain rate of interest for use of the deposited funds.
A professional accountant who is a member of the American Institute of Certified Public Accountants. Designation CPA.
A form of cash payments journal which is used to record deposits and expenditures in and out of a bank account.
A close corporation is a corporation that possesses the following traits: a small number of shareholders; no ready market for the corporation’s stock; and substantial participation by the majority shareholders in the management of the corporation. Some states have close corporation statutes.
The primary stock of a corporation. This stock gives shareholders the right to participate in management of the corporation and give the shareholder a proportionate share of the dividends.
Interest calculated on both the principal amount invested and the previously accumulated unpaid interest.
A person who receives goods that belong to someone else for future sale or other purpose. Although consignees are not the owners of the goods, they are accountable for them.
Goods that are in the hands of someone other than the owner for future sale or other purpose.
The owner of goods that are in someone else’s hands for future sale or other purpose.
Financial statements that show the results of all operations under the parent company’s control, including those of any subsidiaries.
Direct or indirect ownership of voting shares sufficient to elect the majority of the board of directors of a corporation.
Maintaining the proper records is very important to assure limited liability to corporate shareholders. The corporation should have a record book that contains a copy of the articles of incorporation, bylaws, initial and subsequent minutes of directors and shareholders meetings and a stock register.
Legal entity formed under the authority of either provincial or federal statues usually formed to make a profit. Liabilities of shareholders (owners) are generally limited to the amount of their investment. The name of a corporation ends with Limited, Ltd., incorporated, Inc., Corporation or Corp.
Legal obligation to make repayment at a later date for goods, services or money obtained through the extension of credit i.e., a promise to pay in the future. The cost of credit is usually referred to as a finance charge, interest or time-price differential.
Entry recording an increase to a liability or owner’s equity or revenue, or a reduction to an asset or expense. Credits are recorded in the right hand column of an account or a two-column book. Opposite of debit.
Clearinghouse of consumer credit information used by businesses to determine the creditworthiness of borrowers.
Issued by a seller to a purchaser to record the reduction of a bill because of an allowance, return or cancellation. Opposite of an invoice.
This method of voting is intended to create adequate representation of minority shareholders. Cumulative voting allows shareholders to aggregate their votes in favor of fewer candidates than there are slots available.
Unrestricted cash, or other asset that is expected to be converted into cash or consumed in the production of income within a year.
Liability expected to be liquidated in a year.
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