Financial Terms Main Page

This site contains comprehensive definitions for a wide range of terms that cover topics such as financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit...

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Convertibility

The degree of freedom to exchange a currency without government restrictions or controls.

Debt limitation

A bond covenant that restricts in some way the firm's ability to incur additional indebtedness.

Expected return-beta relationship

Implication of the CAPM that security risk premiums will be
proportional to beta.

Insiders

These are directors and senior officers of a corporation -- in effect those who have access to inside
information about a company. An insider also is someone who owns more than 10% of the voting shares of a
company.

Single-premium deferred annuity

An insurance policy bought by the sponsor of a pension plan for a single
premium. In return, the insurance company agrees to make lifelong payments to the employee (the
policyholder) when that employee retires.

Value dating

Refers to when value or credit is given for funds transferred between banks.

Posting

The process of taking journal entries and recording them in the general ledger.

Subsidiary ledger

An accounting record giving the detailed transactions in an account; the subtotals of the debits and credits are posted to the control account maintained in the general ledger. It helps to keep the general ledger free of clutter.

full costing

see absorption costing

Capital lease

A lease in which the lessee obtains some ownership rights over the asset
involved in the transaction, resulting in the recording of the asset as company property
on its general ledger.

Salvage value

The expected revenue to be garnered from the sale of a fixed asset at the
end of its useful life.

Generally Accepted Accounting Principles (GAAP)

A common set of standards and procedures
for the preparation of general-purpose financial statements that either have been established
by an authoritative accounting rule-making body, such as the Financial Accounting
Standards Board (FASB), or over time have become accepted practice because of their universal
application.

Realized Revenue

A revenue transaction where goods and services are exchanged for cash or
claims to cash.

Probate

Letters probate represent judicial certification of the validity of a Will and judicial confirmation ofthe authority of the personal representative who is to administer the Will. Essentially, probate fees are a tax on a person's estate and except for the provinces of Quebec and Alberta, there is no limit to this tax.

Farm Improvement and Marketing Cooperatives Loans Act

See here