Cash reserve refers to the cash kept by a person or business that is beyond their immediate needs. It acts as a safety net to cover unexpected expenses and provides liquidity during financial emergencies.
A cash sale refers to a transaction where the payment for the purchased goods or services is made immediately in cash, rather than via credit terms. Proper accounting entries for cash sales should be recorded in the cash book.
Cash surrender value refers to the amount a policyowner is entitled to receive from an insurance company upon surrendering a life insurance policy with cash value. This sum is the cash value stated in the policy minus any surrender charges and outstanding loans with interest.
Cash Throw-Off, often used interchangeably with Cash Flow, refers to the net amount of cash generated and available for use after accounting for cash outflows.
This key financial metric measures a company's liquidity by assessing its ability to meet short-term obligations using its cash and marketable securities.
Cash value refers to the amount of money a policyholder is entitled to receive upon the cancellation of a life insurance policy or the amount available for loans and withdrawals before the policy matures or is cashed out.
Cash Value Life Insurance provides a permanent life insurance option that includes a savings element, allowing policyholders to accumulate a cash reserve over time within their insurance policies.
Cash-flow accounting is an accounting method that focuses on the inflows and outflows of cash within a business, providing a clear picture of the company's liquidity.
A cash-flow budget is a tool that summarizes expected cash inflows and outflows of an organization over a budget period, usually prepared monthly. It serves as a planning aid to determine cash availability for investment or to identify cash deficits requiring additional finance.
A cash-generating unit (CGU) is a subset of assets, liabilities, and associated goodwill within a reporting entity that contributes to generating cash inflows in a largely independent manner from other parts of the organization.
Cash-on-Cash Return is a method of yield computation used for investments. It calculates the return on investment by dividing the annual dollar income by the total dollar invested. For example, a $10,000 investment that pays $1,000 annually has a 10% cash-on-cash return.
A day book utilized for recording payments of cash from an organization's bank account, often integrated with a cash-receipts journal to form a complete cash book.
Cashback refers to the option given to customers to receive cash back while making a purchase with a debit or credit card at a point-of-sale terminal.
A cashbook is an accounting book used to record all cash receipts and cash disbursements, and its balance ties closely to the cash account in the general ledger, which is reflected on the balance sheet.
A cashier is a person in a business who accepts payment in money and credit sales, provides change as needed, and records the transaction, generally assisted by a cash register.
A cashier's check is a secure payment instrument issued by a bank, which provides a guarantee that the payee will receive the check amount upon demand. It is drawn from the bank's own funds and is widely accepted in financial transactions.
A cashless society is an economic state whereby financial transactions are not conducted with money in the form of physical banknotes or coins, but via the transfer of digital information (usually an electronic representation of money) between parties.
A cassette is an easy-to-hold reel of magnetic tape enclosed in a plastic case, used for storing audio or video recordings.
A part-time worker whose livelihood is achieved from irregular, often temporary work. Such work is often seasonal and is performed in several successive locations.
Casualty insurance provides coverage primarily for the liability of an individual or organization resulting from negligent acts and omissions, thereby causing bodily injury and/or property damage to a third party.
Casualty loss refers to the loss of property due to events such as fire, storm, shipwreck, or theft. Such losses are allowable as deductions from taxable income, net of any insurance reimbursements. To qualify, the loss must result from a sudden, unexpected, or unusual event. Personal casualty losses can be deducted only if they exceed a $100 floor and 10% of adjusted gross income.
Catastrophe Hazard refers to circumstances where there is a significant deviation of the actual aggregate losses from the expected aggregate losses, such as a major natural disaster where whole units or blocks of businesses are threatened. These hazards are often uninsurable by commercial insurance companies due to the extremity of the risk involved or the prohibitive actuarial premiums.
A major medical expense policy designed to pay all or nearly all expenses above a certain deductible amount, up to the limit of the policy.
Supplemental tax-deferred contributions to IRAs and other qualified plans allowed for individuals 50 years or older.
Specialty hard goods retailers that dominate a particular market segment, known as category killers.
A Cathode Ray Tube (CRT) is an electron device that projects electrons onto a viewing screen, controlled by magnetic fields, to create images. Historically, CRTs have been employed in devices such as television screens and computer terminals.
A Cathode Ray Tube (CRT) is a device that was widely used in traditional television sets and computer monitors. It produces images through the use of electron beams striking a phosphorescent surface.
Speculative stocks with short histories of sales, earnings, and dividend payments. Frequently noted during bull markets, analysts often observe that even the "cats and dogs" are experiencing upward movements.
A cause of action refers to a set of facts sufficient to justify a right to sue, providing the foundation for a valid lawsuit. This is distinct from a right of action, which is the legal entitlement to initiate a lawsuit.
Cause-and-effect allocation is a cost allocation method where the allocation base is a significant determinant of the cost. This method ensures accurate assignment of indirect costs to cost objects.
Cause-related marketing (CRM) is a strategic alliance between a business and a nonprofit organization to market an image, product, or service for mutual benefit and to address pressing social issues.
A warning, often written to a potential buyer, advising them to be cautious; it is commonly used to minimize liability for potentially deceptive trade practices by a seller or broker.
Caveat Emptor, a Latin term meaning 'Let the Buyer Beware,' is a doctrine of law indicating that the buyer assumes the risk in a transaction. Although traditionally buyers were solely responsible for due diligence, modern legal frameworks have incorporated requirements for sellers to disclose known defects.
CD-ROM stands for Compact Disc Read-Only Memory, a type of optical disc that stores data for computers in digital form, similar to audio CDs. They are commonly used for distribution of software, multimedia applications, and data storage.
A Collateralized Debt Obligation (CDO) is a type of structured financial product that pools together cash flow-generating assets and repackages this asset pool into discrete tranches that can be sold to investors.
In the context of accounting within the USA, the ceiling is an amount equivalent to the net realizable value of an asset. When using the lower of cost or market method for inventory valuation, the market value cannot exceed this upper limit.
A cell is the intersection of a row and a column in a table, particularly within a spreadsheet. It serves as the basic unit for storing data in programs such as Microsoft Excel, Google Sheets, and other spreadsheet applications.
A cellular layout is an organization of a production facility where items with similar processing requirements are grouped together.
A cellular telephone, or cell phone, is a wireless telephone that communicates through a network of antenna towers, commonly known as cells. Users are automatically transferred from cell to cell as they move, ensuring continuous communication.
Censure is an act by a governmental agency or professional organization indicating condemnation or significant disapproval of an action by an individual or firm. Censure typically results from a material wrongdoing in the performance of professional duties.
An annual survey conducted by the U.S. Department of Commerce where businesses report on product manufacturing and various activities from the past year.
A central bank provides financial and banking services for the government of a country and its commercial banking system, while also implementing the government's monetary policy.
The Central Business District (CBD) refers to the downtown section of a city, generally consisting of retail, office, hotel, entertainment, and governmental land uses with some high-density housing. It is often considered the heart of economic and commercial activities.
Central buying, a widely used chain store practice, involves consolidating all purchasing through a central or main office. This strategy ensures that shipments of merchandise are usually directed to the various branches of the store.
Central planning involves the strategic development and coordination of organizational activities by a designated central agency. This approach limits communication and spontaneity but facilitates streamlined coordination within the organization.
A comprehensive guide to understanding the Central Processing Unit (CPU), its functions, components, and its importance in computer systems.
The central processing unit (CPU) is the primary component of a computer that performs most of the processing inside the computer. It executes instructions from programs by performing basic arithmetic, logic, control, and input/output (I/O) operations.
A measure that indicates the typical value of a distribution. It is used in statistics to summarize a set of data by identifying the central point within that set.
Centralization refers to the process or situation where decision-making authority is concentrated within the upper echelons of an organization, as opposed to being distributed among lower-level managers.
Centralized management occurs when day-to-day business operations are handled by appointed officers rather than the shareholders, a characteristic that indicates that an organization may be taxed as a corporation.
The Certainty Equivalent Method is a risk analysis technique in capital budgeting, where particularly risky returns are expressed in terms of the risk-free rate of return that would be their equivalent.
A certificate is a formal document that captures and authenticates a specific fact, such as a birth, marriate, or ownership stake. It serves as an official record and proof of particular information, playing a crucial role in legal and financial contexts.
A Certificate of Accrual on Treasury Securities, or CATS, is a type of U.S. Treasury security that primarily appealed to income investors for its deep discount and attractive eventual yield.
U.S. Treasury issues sold at a deep discount from face value. A zero-coupon security that pays no interest during its lifetime but returns the full face value at maturity. Ideal for retirement or education planning and cannot be called.
A Certificate of Deposit (CD) is a time deposit offered by banks, credit unions, and other financial institutions with a predetermined interest rate and maturity date.
A Certificate of Deposit (CD) is a debt instrument issued by a bank that usually pays interest. Institutional CDs are issued in denominations of $100,000 or more, while individual CDs start as low as $100. Maturities range from a few weeks to several years. Interest rates are set by competitive forces in the marketplace.
A Certificate of Deposit (CD) is a negotiable certificate issued by a bank in return for a term deposit, offering competitive interest rates and intended for attracting larger investors.
A Certificate of Eligibility (COE) issued by the Veterans Administration confirms an individual's eligibility for a VA mortgage loan based on honorable military service.
The certificate that brings a company into existence; it is issued to the shareholders by the Registrar of Companies when the company's constitutional documents have been received and approved. Until the certificate is issued, the company has no legal existence.
A certificate giving abbreviated details of the cover provided by an insurance policy. In motor insurance or employers' liability policies, the required information must be shown on the certificate of insurance, and policy cover does not come into force until the certificate has been delivered to the policyholder.
A Certificate of Occupancy (CO) is an official document issued by a local government agency or building department signifying that a building conforms to local building code regulations and is safe for occupancy. Generally, initial occupancy of a building or the transfer of title requires a valid Certificate of Occupancy.
A Certificate of Origin is a crucial document required in international trade, stating the country from which a parcel of goods originated and often determining the applicable import duty.
A Certificate of Reasonable Value (CRV) is a document issued by the Veterans Administration (VA) based on an approved appraisal, which establishes a ceiling on the maximum VA mortgage loan principal.
A Certificate of Title is a legal document that officially indicates ownership of a particular asset, such as a motor vehicle or real property. It serves as proof of ownership and outlines any liens or legal encumbrances associated with the asset.
A Certificate of Use is a warranty card accompanying new merchandise, which the owner completes certifying his ownership. This document serves as proof that the merchandise meets specified standards and guarantees.
A statement made in a document certifying that the transaction concerned is not part of a larger transaction series that exceeds a certain monetary value, primarily used to determine stamp duty requirements.
A Certificate to Commence Business is a document issued by the Registrar of Companies to a public company upon incorporation, certifying that the nominal value of the company's share capital is at least equal to the authorized minimum. This certificate allows the company to start conducting business and exercising its borrowing powers.
Certification is the act of confirming formally as true, accurate, or genuine. It often signifies that an individual or organization has met predetermined standards or qualifications.
A certification mark is a distinctive sign, symbol, or word used to officially endorse a product or service that meets certain established standards set by an authoritative entity. The deliverables with this mark assure consumers of quality, origin, material, or method of manufacture.
A Certified Accountant is a qualified financial professional who has met the education, experience, and examination requirements necessary to earn a certification in accounting.
A Certified Accounting Technician (CAT) is a professional designation offered to individuals who have completed specific coursework and examinations in accounting and finance, demonstrating their practical skills and knowledge in these areas.
A second-tier accounting qualification offered by the Association of Chartered Certified Accountants (ACCA), providing an alternative to the CCAB qualification offered by the Association of Accounting Technicians (AAT).
The Certified Administrative Manager (CAM) is a professional certification awarded by the Institute of Certified Professional Managers. It is bestowed upon individuals who have successfully completed a series of five examinations and a case study, and who possess at least three years of management experience.
A depositor's check certified by a bank, promising that the account holder has sufficient funds for the amount, ensuring that the recipient will receive the payment.
A professional certification conferred by the International Board of Standards and Practices for Certified Financial Planners. It requires passing national examinations in various financial planning disciplines and substantial professional experience.
A Certified Financial Statement is a set of financial documents including the balance sheet, income statement, and possibly other related financial reports, that a Certified Public Accountant (CPA) has audited and attested to. These statements confirm that the financial records present fairly, in all material respects, the financial position and performance of a company in accordance with applicable accounting principles.
The Certified Fraud Examiner (CFE) designation is a globally recognized credential awarded to professionals specializing in fraud prevention, detection, and deterrence, conferred by the Association of Certified Fraud Examiners (ACFE).
A Certified General Appraiser is a professional authorized to appraise any type of property under the appraiser certification laws adopted by most states in the early 1990s.
A certified historic structure is a building or structure that has been officially recognized as historically significant and meeting certain standards set forth by heritage preservation bodies.
A U.S. Postal Service option that provides proof of mailing and delivery, offering a return receipt or restricted delivery for an additional fee. Insurance is not available. See also Registered Mail.
The Certified Management Accountant (CMA) is a professional certification awarded by the Institute of Management Accountants (IMA) to individuals who have demonstrated expertise in management accounting through education, examination, and experience.
A Certified Public Accountant (CPA) is a professional designation awarded to accountants who meet specific education, experience, and examination requirements within the jurisdiction of a U.S. state. CPAs hold responsibilities in accounting, auditing, taxation, and financial consulting for both corporations and individuals.
A Certified Public Accountant (CPA) is a designation given to accounting professionals who have passed the Uniform CPA Examination and met additional state-specific educational and experience requirements. CPAs are licensed to provide audit opinions on financial statements and offer various other accounting services.
A Certified Residential Appraiser is qualified to appraise residences and up to four units of housing under appraiser certification law. The certification requires less education, experience, and a less comprehensive exam than a Certified General Appraiser.
Chain Feeding refers to successive threading or continuous insertion processes in mechanical operations or computing environments to ensure rapid and efficient handling of materials or data.
A system outlining the hierarchy of authority and decision-making in organizations, where instructions flow downward and accountability flows upward.
The Chain of Title is a chronological history of all conveyances and encumbrances affecting a land title.
A chain store is an individual retail store that is a part of a group of similar retail stores managed and owned by the same entity, providing consistent products, services, and branding across multiple locations.
The most senior officer in a company, presiding at the annual general meeting and usually at board meetings, with varying degrees of involvement in day-to-day operations.
A Chairman of the Board is the highest-ranking officer in a corporation and presides over the meetings of the board of directors. This role may or may not possess the most executive authority within the firm. In some cases, the Chairman also carries the title of Chief Executive Officer (CEO), who is the principal executive of the corporation.
A chairman's report, sometimes referred to as a chairperson's report or chairwoman's report, is a comprehensive overview of a company's activities and prospects, presented by the chair of the company in the annual report and accounts.
Champerty refers to an arrangement in common law where a third party, such as an attorney, underwrites the costs of a lawsuit in exchange for a portion of the expected damages. Once illegal, champerty is now prohibited in modified form in only a few jurisdictions.
Chancery refers to the jurisdiction exercised by a court of equity, focusing on fairness and justice rather than strictly adhering to statutory laws.
A change agent is an individual or entity that facilitates and supports change within an organization, steering it away from traditional methods towards more innovative and effective approaches.
A 'Change in Accounting Method' refers to an alteration in the overall method of accounting or a change in a material item used in an overall accounting plan. This could involve changes such as switching from cash basis accounting to accrual basis accounting, or altering inventory valuation methods.
Change in demand and change in quantity demanded are key concepts in economics. The former involves shifts due to changes in factors like income or consumer preferences, whereas the latter is caused by price changes and results in movement along the demand curve.
Understand the critical differences between a change in supply, which relates to factors affecting production, and a change in quantity supplied, which is a response to changes in market price.
The Channel Captain is the dominant company in a vertical marketing system that controls the Channel of Distribution, having significant influence over what products or services are developed and distributed throughout the channel.
A channel of distribution refers to the means or pathway used to transfer merchandise from the manufacturer to the end user. The intermediaries involved in this process are known as middlemen, and they can either take title to the merchandise or not.
In periodical publishing, a channel of sales refers to the method or route through which subscription orders are acquired. This can include direct mail, advertising, agency methods, or newsstand sales.
