Accommodation paper is a type of negotiable instrument signed by a party—without receiving value: to facilitate another party in obtaining money or credit.
An asset-backed security (ABS) is a financial instrument that represents a claim on the cash flows generated by a pool of underlying assets, such as mortgages, car loans, or credit-card receivables.
The amount representing the difference between the debit and credit sides of an account. It is brought down onto the opposite side of the account to ensure equal totals.
Buying on margin involves purchasing securities using credit from a broker, facilitated through a margin account, and is strictly regulated by the Federal Reserve Board (FRB).
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.
Credit is a financial term that refers to the ability to borrow money or access goods or services with the understanding that you'll pay later. It encapsulates various arrangements and concepts within personal and corporate finance. Credit influences numerous aspects of the economy, from individual purchasing power to corporate financial strategies.
A term used in accounting to indicate an entry made on the right-hand side of an account ledger, typically representing a decrease in assets or an increase in liabilities and equity.
A credit line, also known as a line of credit, refers to a pre-approved loan amount that a borrower can draw upon as needed and repay either immediately or over time. It is commonly used for short-term borrowing needs.
A creditor is an entity that is owed money, either for goods or services provided or as a result of a loan. Creditors have a legal right to claim the owed amount from the debtor.
The Dual Aspect Principle is a fundamental concept in accounting that asserts every financial transaction has two aspects: one that results in a debit entry and another that results in a credit entry.
A finance company provides various types of loans, typically at higher interest rates compared to traditional banks, often catering to ventures and individuals considered high risk.
A financial market is a marketplace where the trading of financial instruments such as stocks, bonds, commodities, and currencies occurs. These markets facilitate the exchange of capital and credit in the economy.
An economic equilibrium that exhibits an equality of expected real interest rates among countries when there are no restrictions on international trade, credit, and currency exchanges.
The balance brought forward at the beginning of an accounting period. Opening balances may be on the debit or the credit side of a ledger.
Credit given, evidenced by a written obligation that is backed by property; slang for debt, often used in contexts such as seller financing.
Regulation T is a regulation enforced by the Federal Reserve Board that sets the minimum amount of credit that securities brokers and dealers can extend to customers for the initial purchase of regulated securities.
In business, the term 'returns' can refer to responses generated by direct-mail promotions or merchandise returned to a supplier for credit. Returns are a critical aspect in both marketing and supply chain operations.
The right of return refers to an agreement that allows the purchaser to return goods to the seller for a full credit or refund. This policy is often included in sales contracts and consumer agreements to enhance customer satisfaction and trust.
A bookkeeping system that records only one aspect of each transaction, either a debit or a credit. Unlike double-entry bookkeeping, it does not balance. Single-entry bookkeeping is simpler and often used by small businesses.
A visual representation used in accounting to depict individual ledger accounts, reflecting debits and credits in a format resembling the letter 'T'.
An economic condition in which credit is difficult to secure, usually due to actions taken by the Federal Reserve Board to restrict the money supply.
