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Definition of Churn
See creative destruction.
Excessive trading of a client's account in order to increase the broker's commissions.
The change in the value of a firm's foreign currency denominated accounts due to a
Earnings of a firm as reported on its income statement.
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
The ease and quickness with which assets can be converted to cash.
Money owed to suppliers.
Money owed by customers.
The ratio of net credit sales to average accounts receivable, a measure of how
The average project earnings after taxes and depreciation divided by the average
The weighted-average age of all of the firm's outstanding invoices.
An individual who is paid a commission for executing customer orders. Either a floor broker who
Related: Call money rate.
A market where an intermediary offers search services to buyers and sellers.
A conditional trading order that indicates a security may be purchased only at the designated
Net result of public and private international investment and lending activities.
The grouping of investors who have a preference that the firm follow a particular financing
A broker on the floor of an exchange acts as agent for a particular brokerage house and
A single centralized account into which funds collected at regional locations
Refers to the volatility of returns on international investments caused by events associated
Cumulative Translation Adjustment (CTA) account
An entry in a translated balance sheet in which gains
Net flow of goods, services, and unilateral transactions (gifts) between countries.
An order to buy or sell stock that automatically expires if it can't be executed on the day it is entered.
Refers to establishing and liquidating the same position or positions within one day's trading.
accounts over which an individual or organization, other than the person in whose
A group of shareholders who prefer that the firm follow a particular dividend policy. For
Economic order quantity (EOQ)
The order quantity that minimizes total inventory costs.
Fill or kill order
A trading order that is canceled unless executed within a designated time period.
Financial leverage clientele
A group of investors who have a preference for investing in firms that adhere to
A member who is paid a fee for executing orders for clearing members or their customers. A
Generally Accepted Accounting Principals (GAAP)
A technical accounting term that encompasses the
trading by officers, directors, major stockholders, or others who hold private inside
Special accounts where you can save and invest, and the taxes are deferred until money
An agreement between two or more firms to share risk and financing responsibility in
Last trading day
The final day under an exchange's rules during which trading may take place in a particular
A group of shareholders who, because of their personal leverage, seek to invest in
An order to buy a stock at or below a specified price or to sell a stock at or above a specified
Limit order book
A record of unexecuted limit orders that is maintained by the specialist. These orders are
Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of
This is an order to immediately buy or sell a security at the current trading price.
Money market demand account
An account that pays interest based on short-term interest rates.
Negotiable order of withdrawal (NOW)
Demand deposits that pay interest.
An account carried by one futures commission merchant with another futures commission
Arrangement whereby sales are made with no formal debt contract. The buyer signs a receipt,
Open (good-til-cancelled) order
An individual investor can place an order to buy or sell a security. That
Pecking-order view (of capital structure)
The argument that external financing transaction costs, especially
Trades based on signals from computer programs, usually entered directly from the trader's
Method of accounting for a merger in which the acquirer is treated as having purchased
Regulatory accounting procedures
accounting principals required by the FHLB that allow S&Ls to elect
Sell limit order
Conditional trading order that indicates that a, security may be sold at the designated price or
Statement of Financial Accounting Standards No. 8
This is a currency translation standard previously in
Statement of Financial Accounting Standards No. 52
This is the currency translation standard currently
An order to sell a stock when the price falls to a specified level.
Stop order (or stop)
An order to buy or sell at the market when a definite price is reached, either above (on a
A stop order that designates a price limit. In contrast to the stop order, which becomes a
account in which the bank takes all of the excess available funds at the close of each business
Buying and selling securities.
Costs of buying and selling marketable securities and borrowing. trading costs include
trading of a stock, bond, option or futures contract can be halted by an exchange while news is
CDs purchased by accounts that are likely to resell them. The term is commonly used in the Euromarket.
The posts on the floor of a stock exchange where the specialists stand and securities are traded.
The difference between the high and low prices traded during a period of time;
Treasury tax and loan account at a bank.
Zero-balance account (ZBA)
A checking account in which zero balance is maintained by transfers of funds
Amounts a company owes to creditors.
Amounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts.
An explanation or report in financial terms about the transactions of an organization.
The process of satisfying stakeholders in the organization that managers have acted in the best interests of the stakeholders, a result of the stewardship function of managers, which takes place through accounting.
A collection of systems and processes used to record, report and interpret business transactions.
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The period of time for which financial statements are produced – see also financial year.
Accounting rate of return (ARR)
A method of investment appraisal that measures
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
‘Buckets’ within the ledger, part of the accounting system. Each account contains similar transactions (line items) that are used for the production of financial statements. Or commonly used as an abbreviation for financial statements.
A method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred.
A method of accounting in which profit is calculated as the difference between income
The production of financial statements, primarily for those interested parties who are external to the business.
The production of financial and non-financial information used in planning for the future; making decisions about products, services, prices and what costs to incur; and ensuring that plans are implemented and achieved.
Profit and Loss account
A financial statement measuring the profit or loss of a business – income less expenses – for an accounting period.
Strategic management accounting
The provision and analysis of management accounting data about a business and its competitors, which is of use in the development and monitoring of strategy (Simmonds).
The formula Assets = Liabilities + Equity.
Amounts owed by the company for goods and services that have been received, but have not yet been paid for. Usually accounts payable involves the receipt of an invoice from the company providing the services or goods.
Amounts owed to the company, generally for sales that it has made.
Allowance for doubtful accounts
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
An offset to an asset account that reduces the balance of the asset account.
An account that reduces an equity account. An example is Treasury stock.
An account maintained in the general ledger that holds the balance without the detail. The detail is maintained in a subsidiary ledger.
The accounts found on the Balance Sheet; these account balances are carried forward for the lifetime of the company.
The format used for a general ledger page. The name of the account is put on the top line, and a vertical line is dropped from the top line (hence the "T"). Debits are recorded on the left side, and credits are recorded on the right.
The accounts found on the Income Statement and the Statement of Retained Earnings; these accounts are reduced to zero at the end of every accounting period.
A broad, all-inclusive term that refers to the methods and procedures
An equation that reflects the two-sided nature of a
Short-term, non-interest-bearing liabilities of a business
Short-term, non-interest-bearing debts owed to a
accounts receivable turnover ratio
A ratio computed by dividing annual
Well, frankly, accrual is not a good descriptive
See accrual-basis accounting.
generally accepted accounting principles (GAAP)
This important term
internal accounting controls
Refers to forms used and procedures
accounting rate of return (ARR)
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
Certified Management Accountant (CMA)
a professional designation in the area of management accounting that
a discipline that focuses on techniques or
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