DECA Financial Services
Executed vs. Executory contract
Executed=completed contract. Executory=yet to be completed
Securities and Exchange Commission
SEC; created by the Securities Exchange Act of 1934; monitors capital markets, enforce security laws, make efficient security markets, protect investors, and maintain well-functioning economy. Sellers must provide full public disclosure of stocks - most issuers of securities must be registered with the SEC. Run by 5 commissioners appointed by BARACK with staggered 5 year terms.
Simple written report
SHORT report, not detailed. SHORT.
Accounts payable
Money a company needs to pay the invoices of the supplier
Accounts receivable
Money to be paid to a supplier for their goods
Data mining
Searching computer databases to look for patterns and correlations among information to make business decisions such as analyzing and determining customers who possess he highest buying potential.
Purchasing power
a customer's ability to purchase goods and services
tax shelter
a legal method of minimizing or decreasing an investor's taxable income and, therefore, his or her tax liability. Tax shelters can range from investments or investment accounts that provide favorable tax treatment, to activities or transactions that lower taxable income. Ex. retirement plans (401k) and real estate (mortgage interest is tax-deductible)
Commodities market
a market that trades in primary economic sector rather than manufactured products. Soft commodities are agricultural products such as wheat, coffee, cocoa and sugar. Hard commodities are mined, such as gold and oil. Investing is usually done through derivatives such as futures contracts.
Certified Public Accountant
a member of an officially accredited professional body of accountants; if they screw up your federal tax returns, you aren't held accountable, but they are.
Office memorandum
a memo; the most commonly used method of in-house communication in many businesses
Credit union
a non-profit financial institution that pools money and functions like a commercial bank but with higher interest rates and lower loan rates; chartered at federal or state level; usually has exclusive membership
Fiduciary
a person to whom property or power is entrusted for the benefit of another; authorizing your accountant, attorney, and life-insurance agent to make your financial decisions for you.
Price transparency
ability to know all of the bid prices, ask prices, and trading quantities for a given stock, good, or service at any point in time
Commercial bank
accept deposits and provide security and convenience to customers; also loan money that is used to expand businesses and buy goods, leading to more deposited funds.
Customer Relationship Management (CRM) date
addresses, phone numbers, etc.; perishable data because it may change over time
Secondary market
after the IPO, the reselling of securities takes place here; the NYSE and NASDAQ are examples.
Implied contract
an agreement created by actions of the parties involved, but it is not written or spoken; ex. a vet will treat your cat and you will pay, but none of this is expressly stated, you just know.
Pyramid scheme
an illegal form of multi-level marketing where emphasis is placed on collecting initial fees from as many people as possible
Brokerage
an intermediary between buyers and sellers to assist in securities transactions, which is compensated with a fee or commission once the successful transaction is complete.
Financial market
any marketplace where buyers and sellers participate in the trade of assets such as equities, bonds, currencies and derivatives; has price transparency
Join
type of database query that combines rows from multiple tables
Managerial accounting system
useful for internal planning and decision making; helps managers plan, control resources, make decisions, like producing more or hiring more
Debtor-creditor relationship
when someone owes someone money, e.g. when interest is charged
Money market
where financial instruments with high liquidity and very short maturities are traded, like bills/notes, certificates of deposit, collateral loans, and repurchase agreements
Checking account
basic service that is highly liquid and allows for withdrawals and deposits with very little interest and earns banks very little revenue. FDIC-insured up to $100,000.
Data query
command to extract data from a database in a readable format
Convergence/consolidation in the financial industry
companies merge together because it reduces overlap, reduces costs, and increases customer and geographic reach; financial deregulation, technological advances, and desires for lower costs have spurred this movement.
Derivative market
complicated market for selling derivatives that derive their values from other securities. examples of derivatives include forwards, futures, options, swaps and contracts-for-difference (CFDs)
Utility and marketing concept
considers the consumer's point of view; function as a gauge of satisfaction
Data-definition (data query)
create, delete, or modify other database objects
Decision trees
data are categorized or segmented into meaningful, related groups based on certain characteristics that are defined by the set of rules that the business establishes7
Estate allocation
dividing or designating a person's assets among his or her beneficiaries
Net asset value
dollar value for one share of a stock
Financial accounting system
government-mandated; applies GAAP to present financial info to external users
Financial globalization: effects
helps economies in developing countries by shifting wealth there and providing jobs, but economic downturns of one country can affect the economies of other countries; developed countries also lose jobs. ALSO: lowered international taxes, reduced business cycle risks from diversifying funds to different countries, and increased irrational herd activity driven by emotion resulting in buying and selling frenzies.
Excise tax
hidden tax on specific items, like gasoline; may not be uniform throughout all states.
Liquidity
how easily an asset or security can be traded; cash is very liquid, while rare books are illiquid.
Trade law
law that deals with international trade
Property law
law that deals with real property
Contract law
law that recognizes contracts as voluntary promises that must be fulfilled
Export quota
limitation on the quantity of goods that can move out of a country
Strategic planning
making long-range plans for a company as a whole (3-5 years)
Capital market
markets for buying and selling equity and debt securities (stocks and bonds) for long term (1 yr+) duration
First-in, First-out
method used to calculate inventory
Garnishment
payments towards a debt owed by an individual can be paid by a third party - which holds money or property that is due to the individual - directly to the creditor. John Smith owes $10,000 in unpaid taxes, IRS can resort to garnishment of his wages. The IRS would then direct Smith's employer to remit a portion of his salary for a certain amount of time, until Smith has paid off his taxes.
Business cycle
periods of expansions , where employment, personal incomes, and production increase, and recessions, where they decrease; stocks risk fluctuating prices as the cycle goes on
Collection letter
persuasive message that businesses write to encourage late payments
Savings
process of putting cash aside and into a safe, FDIC insured, and liquid account, making it easily accessed in a short amount of time.
Investing
process of using money to buy an asset that you think will generate a safe rate of return over time, making you wealthier each year.
Whistleblower policy
promotes ethical work environment; go tell on bad employees
World Bank
provides financial and technical aid to developing countries
Six Sigma
quality management methodology used by financial institutions to sustain regulatory compliance. Define the problem, measure aspects of current process, analyze data, improve processes, develop measures to monitor new process results
Accrual accounting system
records transactions at the time they occur even if no money changes hands at the time
Financial deregulation
removal of government oversight in an industry, market, or economy to increase competition and innovation, ideally lowering prices but realistically not, as seen by cable and airline service deregulation leading to increases in price
Primary economic sector
retrieval and production of raw materials such as corn, coal, wood and iron.
Select and Crosstab (data query)
retrieve data
Cash or spot market
risky market where commodities or securities are sold for cash at on the spot prices and effective immediately.
Primary market
sale of bonds/stocks directly from the institution to the public known as the "initial public offering" (IPO)
Pass-through (data query)
send data to remote database for processing
Ponzi scheme
similar to a pyramid scheme but new investors' funds are distributed
most innovative businesses
small businesses
General accepted accounting principles (GAAP)
standards of accounting that publicly-traded companies are required to abide by to provide accurate info to investors
Examples of investing
stocks, fine art, rare coins, comic books, bonds, real estate, and non-insured money market accounts like treasury bonds and mutual funds
Property tax
tax on material goods
Income tax
tax on profit
Express contract
terms of the contract are presented orally in writing at the time of the agreement
Insurance market
the equitable transfer of the risk of a loss, from one entity to another in exchange for money. The premium is the amount to be charged for a certain amount of coverage. The insurance policy details this stuff.
Economic resources
the inputs of production; they are ALL LIMITED.
Bookkeeper
the recording of financial transactions, part of the process of accounting. Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation
Tertiary economic sector
the supplying of services to consumers and businesses, such as baby-sitting, cinema and banking.
Graphics
these explain complex information or highlight the most important info
Continuous-inspection compliance technology
this must have access to transactional information at its source
Insider trading
trading stock based on information not available to the general public
Secondary economic sector
transformation of raw or intermediate materials into goods, e.g. manufacturing steel into cars, or textiles into clothing.
Financial institution
An establishment that focuses on dealing with financial transactions, such as investments, currency exchanges, investment brokerages, loans and deposits. Conventionally, financial institutions are composed of organizations such as banks, trust companies, insurance companies and investment dealers.
Master data management
Collection, storage, accessibility, and maintenance of a business's nontransactional data for all employees who use it. Consistency is important.
Tax-deferred investments
financial products that are taxed at time of disbursement, or purchase
Big Q
focuses on exceeding customer expectations
Full-block business letters
format includes no indents, have single spacing within paragraphs and double-spacing between paragraphs
Accounting fraud
intentional manipulation of financial statements to create a facade of a company's financial health, e.g. understating liabilities, overstating revenue, not recording expenses
Savings account
A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate; may limit withdrawals; highly liquid; holds money not intended for daily use.
Unilateral vs. Bilateral contract
Bilateral=I'll pay you $100 for that dog; one person does something in exchange for something else. Unilateral=I'll pay anyone $100 if they can find my dog; one person offers something but there is no other side/there is no promise made by the other side to fulfill
Examples of savings
Checking and savings accounts, certificates of deposits, and treasury bills.
Downward vs. Upward vs. Lateral vs. Grapevine communication
DOWN FROM management vs. UP TO management vs. AMONG employees vs. informal person-to-person
Nearest-neighbor method
Data mining technique that classifies data records according to similar historical data
Dashboard
Data mining technique that summarizes a business's financial data and presents that data in simple charts and tables
Artificial neural network
Data mining technique to review financial records to identify possibly errors and questionable entries
Chartered financial analyst (CFA)
Designation offered by CFA institute; experts on securities and investments
Quoting vs. paraphrasing
EXACT WORDS vs. summarizing
Foreign exchange market
Forex market; exchange of currencies; speculators may buy a lot of a currency they expect to increase in value and sell a currency they expect to decrease
High vs. low context culture
High-context cultures communicate more nonverbally, while low-context cultures communicate more verbally
Federal judicial system vs. executive branch
Judicial system interprets law while executive branch makes the law
Industry forecasting
Making predictions of future prospects for entire industries, like housing and retailing.
Over the counter market
OTC; penny stocks or stocks from small companies that don't trade on the big exchanges trade here, but on the OTC Bulletin Board (OTCBB) and pink sheets (a daily publication by the National Quotation Bureau)
Financial globalization
The tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby increasing the interconnectedness of different markets, international trade, and cultural exchange
Cash receipt
Total of all sources of income that a business lists under cash receipts, including cash sales, but not credit sales. Losses are not reported here.
Price discrimination
charging people different prices for similar products
Tax deduction
charitable contributions are not taxed
Cost Standards
established specifications used to measure how much a project or product costs
