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Definition of Indemnity
A type of contract in which the amount of the benefit to be paid is based on the actual amount of financial loss determined at the time of the loss - for example, hospital expense insurance.
Coverage against accidental death usually payable in addition to base amount of coverage.
Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.
expenses that have to be recorded in order for the financial statements to be accurate. Accrued expenses usually do not involve the receipt of an invoice from the company providing the goods or services.
The account that records the short-term, noninterest-
An approximate measure of the liability of a plan in the event of a
A method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing.
planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and
A method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers.
A relatively new method advocated for the
a process using multiple cost drivers to predict and allocate costs to products and services;
A cost allocation system that compiles costs and assigns
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
The actual expenditure made to acquire an asset, which includes the supplierinvoiced
a valuation method that uses actual direct
The physical commodity underlying a futures contract. Cash commodity, physical.
Additional paid-in capital
amounts in excess of the par value or stated value that have been paid by the public to acquire stock in the company; synonymous with capital in excess of par.
Additional paid-in capital
Any payment received from investors for stock that exceeds
additional paid-in capital
Difference between issue price and par value of stock. Also called capital surplus.
Amortization (Credit Insurance)
Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity.
Annual fund operating expenses
For investment companies, the management fee and "other expenses,"
Methods of financing in which lenders and equity investors look principally to the
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
Automatic Benefits Payment
Automatic payment of moneys derived from a benefit.
Base probability of loss
The probability of not achieving a portfolio expected return.
Beneficiary (Credit Insurance)
The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor.
An instruction that pays a cash amount upon the occurrence of a specific event.
Benefit Ratio Method
The proportion of unemployment benefits paid to a company’s
The amount of cash payable on a benefit.
Benefit Wage Ratio Method
The proportion of total taxable wages for laid off
a listing of service departments in an order that begins with the one providing the most service
Borrower (Credit Insurance)
A consumer who borrows money from a lender.
Related: Premium payback period.
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
cafeteria plan a “menu” of fringe benefit options that include
cash or nontaxable benefits
Canadian Deposit Insurance Corporation
Better known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds.
Canadian Life and Health Insurance Association (CLHIA)
An association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada.
The difference between the net cost of a security and the net sale price, if that security is sold at a loss.
The negative difference between the adjusted cost base of an investment held as a capital property and the proceeds of disposition you receive when you sell it. When you sell such an investment for less than you paid, you incur a capital loss.
Cash flow time-line
Line depicting the operating activities and cash flows for a firm over a particular period.
Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving
Changes in Financial Position
Sources of funds internally provided from operations that alter a company's
chief financial officer (CFO)
Officer who oversees the treasurer and controller and sets overall financial strategy.
Child Insurance Rider (CIR)
insurance or insurability provided on current or future children of insured.
In medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By this means, the cost of coverage to the insured is reduced.
Refers to the fact that the merger of two firms decreases the probability of default on
Commercial Business Loan (Credit Insurance)
An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.
A contract accounting method that recognizes contract revenue
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the
any reduction in units that occurs uniformly
A term of reference describing a unit of trading for a financial or commodity future. Also, the actual
A formal written statement of the rights and obligations of each party to a transaction.
Method of accounting for sales or service agreements where completion
an external party that has been granted an outsourcing contract to produce a part or component for an entity
The month in which futures contracts may be satisfied by making or accepting a delivery.
an external party that has been granted an
Contract Work Hours and Safety Standards Act
A federal Act requiring federal contractors to pay overtime for hours worked exceeding 40 per week.
Corporate financial management
The application of financial principals within a corporation to create and
Corporate financial planning
financial planning conducted by a firm that encompasses preparation of both
The calculation and comparison of the costs and benefits of a policy or project.
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
The net present value of an investment divided by the investment's initial cost. Also called
Cost of Insurance
The cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual.
a contract in which the customer agrees
costs of financial distress
Costs arising from bankruptcy or distorted business decisions before bankruptcy.
Country financial risk
The ability of the national economy to generate enough foreign exchange to meet
A loan receivable that has proven uncollectible and is written off.
Creditor (Credit Insurance)
A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity.
Critical Illness Insurance
Coverage that provides a lump-sum payment should you be diagnosed with a critical illness and survive a pre-determined period of time. There are no restrictions on how you use your benefit.
Critical Illness Insurance (Credit Insurance)
Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing.
Current Income Tax Expense
That portion of the total income tax provision that is based on
the time between the placement of an order to
Dead Peasants Insurance
Also known as "Dead Janitors insurance", this is the practice, where allowed, in several U.S. states, of numerous well known large American Corporations taking out corporate owned life insurance policies on millions of their regular employees, often without the knowledge or consent of those employees. Corporations profiting from the deaths of their employees [and sometimes ex-employees] have attracted adverse publicity because ultimate death benefits are seldom, even partially passed down to surviving families.
amount paid on death of an insured.
Debt (Credit Insurance)
Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured.
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Defined benefit plan
A pension plan in which the sponsor agrees to make specified dollar payments to
Defined Benefit Plan
A pension plan that pays out a predetermined dollar
An expense account that represents the portion of the cost of an asset that is being charged to expense during the current period.
insurance that pays you an ongoing income if you become disabled and are unable to pursue employment or business activities. There are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usually 30, 60 or 90 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period.
Disability Insurance (Credit Insurance)
Group insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury.
a reduction in units that occurs at a specific
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
employee time sheet
a source document that indicates, for each employee, what jobs were worked on during the day and for what amount of time
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
Equivalent annual benefit
The equivalent annual annuity for the net present value of an investment project.
Errors and Omissions Insurance
insurance coverage purchased by the agent/broker which provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/broker.
The reduction in value of an asset as it is used for current company operations.
The percentage of the assets that were spent to run a mutual fund (as of the last annual
Charged to an expense account, fully reducing reported profit of that year, as is appropriate for
The costs incurred in buying, making or producing goods and services.
Costs involved in running the company.
Export Credit Insurance
The granting of insurance to cover the commercial and political risks of selling in foreign markets.
External Financial Statements
Corporate financial statements that have been reported on by an external independent accountant.
Extraordinary Gain or Loss
Gains and losses that are judged to be both unusual and nonrecurring.
extraordinary gains and losses
No pun intended, but these types of gains
Federal Deposit Insurance Corporation (FDIC)
A federal institution that insures bank deposits.
Federal Insurance Contributions Act of 1935 (FICA)
A federal Act authorizing the government to collect Social Security and Medicare payroll taxes.
The production of financial statements, primarily for those interested parties who are external to the business.
a discipline in which historical, monetary
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