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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Monthly Financial Term Picks:

Back fee

The fee paid on the extension date if the buyer wishes to continue the option.

Controller

The corporate manager responsible for the firm's accounting activities.

Mortgage pass-through security

Also called a passthrough, a security created when one or more mortgage
holders form a collection (pool) of mortgages sells shares or participation certificates in the pool. The cash
flow from the collateral pool is "passed through" to the security holder as monthly payments of principal,
interest, and prepayments. This is the predominant type of MBS traded in the secondary market.

Probability

The relative likelihood of a particular outcome among all possible outcomes.

12B-1 fees

The percent of a mutual fund's assets used to defray marketing and distribution expenses. The
amount of the fee is stated in the fund's prospectus. The SEC has recently proposed that 12B-1 fees in excess
of 0.25% be classed as a load. A true " no load" fund has neither a sales charge nor 12b-1 fee.

Wash

Gains equal losses.

Cost of goods sold

The cost of merchandise that a company sold this year. For manufacturing companies, the cost of raw
materials, components, labor and other things that went into producing an item.

cost accumulation

the approach to product costing that determines
which manufacturing costs are recorded as part
of product cost

Partnership

A form of business organization in which owners have unlimited personal
liability for the actions of the business, though this problem has been mitigated
through the use of the limited liability partnership.

Term Deposit

An interest-earning bank deposit that cannot be withdrawn without penalty until a specific time.

Nonmarketable Security

A debt or equity security for which there is no posted price or bidand-
ask quotation available on a securities exchange or over-the-counter market.

Picking list

A document listing items to be removed from stock, either for delivery to the shop floor for production purposes or for delivery to a customer.

Money Laundering

This is the process by which "dirty money" generated by criminal activities is converted through legitimate businesses into assets that cannot be easily traced back to their illegal origins.

Collateral

Assets that are used to secure a loan.

credit bureau

An organization that provides financial institutions with credit information concerning existing or potential customers who are looking to obtain credit services.