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Definition of charge-back system
a system using transfer prices; see transfer
Accelerated cost recovery system (ACRS)
Schedule of depreciation rates allowed for tax purposes.
A security that is collateralized by loans, leases, receivables, or installment contracts
The fee paid on the extension date if the buyer wishes to continue the option.
Brokerage house clerical operations that support, but do not include, the trading of stocks and
An intercompany loan channeled through a bank.
A loan in which two companies in separate countries borrow each other's currency for a
1) When bond yields and prices fall, the market is said to back-up.
A market condition in which futures prices are lower in the distant delivery months than in
Another term for a repo.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
Contingent deferred sales charge (CDSC)
The formal name for the load of a back-end load fund.
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
With respect to a project financing, an arrangement under which the sponsors of a project
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
Federal Reserve System
The central bank of the U.S., established in 1913, and governed by the Federal
Fixed-charge coverage ratio
A measure of a firm's ability to meet its fixed-charge obligations: the ratio of
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
Just-in-time inventory systems
systems that schedule materials/inventory to arrive exactly as they are
Limitation on sale-and-leaseback
A bond covenant that restricts in some way a firm's ability to enter into
An option that allows the buyer to choose as the option strike price any price of the
Mortgage-Backed Securities Clearing Corporation
A wholly owned subsidiary of the Midwest Stock
Securities backed by a pool of mortgage loans.
A technical trading strategy that combines mechanical rules, such as the CRISMA
A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow.
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also
Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected
The length of time it takes to recover the initial cost of a project, without regard to the time value of money.
Related: retention rate.
Progressive tax system
A tax system wherein the average tax rate increases for some increases in income but
The commission charged by a mutual fund when redeeming shares. For example, a 2%
Sale and lease-back
Sale of an existing asset to a financial institution that then leases it back to the user.
The fee charged by a mutual fund when purchasing shares, usually payable as a commission to
Split-rate tax system
A tax system that taxes retained earnings at a higher rate than earnings that are
Stripped mortgage-backed securities (SMBSs)
Securities that redistribute the cash flows from the
The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.
Common to all businesses.
Also called undiversifiable risk or market risk, the minimum level of risk that can be
Systematic risk principle
Only the systematic portion of risk matters in large, well-diversified portfolios.
Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously
Two-tier tax system
A method of taxation in which the income going to shareholders is taxed twice.
Also called the diversifiable risk or residual risk. The risk that is unique to a company
MACRS (Modified Accelerated Cost Recovery System)
A depreciation method created by the IRS under the Tax Reform Act of 1986. Companies must use it to depreciate all plant and equipment assets installed after December 31, 1986 (for tax purposes).
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
The retrospective process of measuring performance, comparing it with plan and taking corrective action.
A method of investment appraisal that calculates the number of years taken for the cash flows from an investment to cover the initial capital outlay.
Planning, programming and budgeting system (PPBS)
A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres.
Periodic inventory system
An inventory system in which the balance in the Inventory account is adjusted for the units sold only at the end of the period.
Perpetual inventory system
An inventory system in which the balance in the Inventory account is adjusted for the units sold each time a sale is made.
Fixed Charge Coverage Ratio
A measure of how well a company is able to meet its fixed
The number of years necessary for the net cash flows of an
The amount of total risk that cannot be eliminated by portfolio
The amount of total risk that can be eliminated by diversification by
actual cost system
a valuation method that uses actual direct
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
business intelligence (BI) system
a formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about
cost control system
a logical structure of formal and/or informal
cost management system (CMS)
a set of formal methods
enterprise resource planning (ERP) system
a packaged software program that allows a company to
flexible manufacturing system (FMS)
a production system in which a single factory manufactures numerous variations
hybrid costing system
a costing system combining characteristics
job order costing system
a system of product costing used
just-in-time manufacturing system
a production system that attempts to acquire components and produce inventory only as needed, to minimize product defects, and to
management control system (MCS)
an information system that helps managers gather information about actual organizational occurrences, make comparisons against plans,
management information system (MIS)
a structure of interrelated elements that collects, organizes, and communicates
normal cost system
a valuation method that uses actual
the time it takes an investor to recoup an
performance management system
a system reflecting the entire package of decisions regarding performance measurement and evaluation
process costing system
a method of accumulating and assigning costs to units of production in companies producing large quantities of homogeneous products;
a production system dictated by product sales
the traditional production system in which
an inventory ordering system in which a red
responsibility accounting system
an accounting information system for successively higher-level managers about the performance of segments or subunits under the control
standard cost system
a valuation method that uses predetermined
an inventory ordering system in which two
The offsetting of a current year loss against the reported taxable
A capital budgeting analysis method that calculates the amount of
Du Pont system
A breakdown of ROE and ROA into component ratios.
system whereby customers send payments to a post office box and a local bank collects and processes checks.
Modified Accelerated Cost Recovery System (MACRS)
Depreciation method that allows higher tax deductions in early years and lower deductions later.
Time until cash flows recover the initial investment of the project.
Fraction of earnings retained by the firm.
Federal Reserve System
The central banking authority responsible for monetary policy in the United States.
See market mechanism.
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
A special, nonrecurring charge taken in conjunction with a consolidation
Costs associated with restructuring activities, including the consolidation and/or relocation of operations or the disposition or abandonment of operations or productive assets.
Nonrecurring losses or expenses resulting from transactions or events which,
Automated storage/retrieval system
A racking system using automated systems
The subsequent subtraction from inventory records of those parts used
Enterprise resource planning system
A computer system used to manage all company
A materials flow concept in which parts are only withdrawn after a
A materials flow concept in which parts are issued based on planned
A system in which parts are reordered when their supply in one
Visual review system
Inventory reordering based on a visual inspection of on-hand
A procedure for making the effective date of a policy earlier than the application date. backdating is often used to make the age of the consumer at policy issue lower than it actually was in order to get a lower premium.
Back To Back Annuity
This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.
Bond or note secured by assets of company.
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