Securities and investments 1
Corporation
A business with the legal rights of a person and which may be owned by many people
Form 10-K
A comprehensive summary report of a company's performance that must be submitted annually to the Securities and Exchange Commission. Typically contains much more detail than the annual report. It includes information such as company history, organizational structure, equity, holdings, earnings per share, subsidiaries, etc.
Electronic funds transfer
A computerized cash payments system that uses electronic impulses to transfer funds
prospectus
A condensed version of a registration statement containing essential info about the amount offered, the price, and the plans for the funds raised made available to potential investors.
conglomerates
A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate group, usually involving a parent company and many subsidiaries. Often, a conglomerate is a multi-industry company. Conglomerates are often large and multinational.
Shipment Contract
A contract for the sale of goods in which the seller is required or authorized to ship the goods by carrier. The seller assumes liability for any losses or damage to the goods until they are delivered to the carrier.
stock dividend
A dividend paid as additional shares of stock rather than as cash. Stock dividends, unlike cash, are non-taxable.
Assumption of Risk
A doctrine under which a plaintiff may not recover for injuries or damage suffered from risks he or she knows of and has voluntarily assumed.
bond rating
A grade given to bonds that indicates their credit quality. Private independent rating services such as Standard & Poor's, Moody's and Fitch provide these evaluations of a bond issuer's financial strength, or its the ability to pay a bond's principal and interest in a timely fashion.
Board of Directors
A group of people elected by the stockholders of a corporation to set the policies for the corporation.
General amount column
A journal amount column that is not headed with an account title
General Amount Column
A journal amount column that is not headed with an account title.
Correcting entry
A journal entry made to correct an error in the ledger
Special journal
A journal used to record only one kind of transaction
General journal
A journal with two amount columns in which all kinds of entries can be recorded
Criminal Law
A law that defines crimes against the public order.
secondary market
A market in which an investor purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market. AKA aftermarket.
Negotiable instrument
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, with the payer named on the document. More specifically, it is a document contemplated by or consisting of a contract, which promises the payment of money without condition, which may be paid either on demand or at a future date. The term can have different meanings, depending on what law is being applied and what country it is used in and what context it is used in.
Accounting system
A planned process for providing financial information that will be useful for management
Bait and Switch
A store advertises bargains that do not really exist to lure customers in, in hopes that they will buy more expensive merchandise.
Checks and Balances
A system that allows each branch of government to limit the powers of the other branches in order to prevent abuse of power
income statement
AKA "profit and loss statement" or "statement of revenue and expense." A financial statement that measures a company's financial performance over a specific accounting period. Also shows the net profit or loss incurred over a specific accounting period, typically over a fiscal quarter or year.
Resource Substitutability
Ability of resources to be applied to different things, some better than others
Cash flow statement
Accounting report that describes the cash that flows in and out of a business
Permanent accounts
Accounts used to accumulate information from one fiscal period to the next
Services of Investment Companies
Administration and Record Keeping - Diversification - Professional Management - Reduced Transaction Costs - Investing for retirement (IRA)
Plant asset record
An accounting form on which a business records information about each plant asset.
plant asset record
An accounting form on which a business records information about each plant asset.
Account
An accounting record that summarizes all the information for a particular business item
Satisfaction
An agreed-to settlement for a debt.
Terms of sale
An agreement between a buyer and a seller about payment for merchandise
Delegate
An official who is expected to represent the views of his or her constituents even when personally holding different views; one interpretation of the role of legislator.
syndicate
Group of investment banks that jointly underwrite a security issue.
Substantive Law
Group of laws that define rights and duties
Procedural Law
Group of laws that define the methods for enforcing legal rights and duties.
Board of directors
Group of people who meet several times a year to make important decisions affecting the company
Natural increase
Growth of the population due to an excess of births over deaths
In 2002 there was a six rare tax system. The six rates were divided into three categories. What are the 3 categories
Heads of households Single taxpayers Married taxpayers
Surplus/ Excess Surplus
High price, less quantity demanded then supplied
presentment for payment
In relation to Commercial Paper ,presentment is a demand for the payment or acceptance of a negotiable instrument, such as a check. The holder of a negotiable instrument generally makes a presentment to the maker, acceptor, drawer, or drawee.
government
In the US, banks and the _____ work together to form the banking system and to ensure the money supply is adequate, appropriate, and trustworthy.
DRIP
In the securities industry, a Dividend Reinvestment Plan is offered by a corporation to allow investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date.
Network Structure
In the sixth organizational form, network structure, the organization has a central core that is linked to outside independent firms by computer connections, which are used to operate as if all were a single organization.
What is the correct fiscal policy when a recession is caused by a decrease in aggregate demand?
Increase government spending and decrease taxes
Board of directors
Individuals chosen by shareholders in a corporation to administer the affairs of the business
Stakeholders
Individuals or groups who have an interest in and are affected by the actions of an organization
Federal Reserve
Influences the federal funds rate by buying/selling govn't securities.
Identify the condition that occurs when someone's liabilities are greater than his or her assets
Insolvency
Securities Investor Protection Corporation
Insures investors accounts for up to $500,000 (including $100,00 in cash), in the event of fraud or the bankruptcy of a member securities brokerage.
Mental Distress
Intentional infliction of emotional distress (IIED) is a tort claim of recent origin for intentional conduct that results in extreme emotional distress. Some courts and commentators have substituted mental for emotional, but the tort is the same. Some jurisdictions refer to IIED as the tort of outrage.
Truth in Lending Act
Lenders are required to disclose the true costs of credit to borrowers, including the total amount of interest charged over the life of a loan and the amounts of monthly payments by this federal law:
Levels of subscribers to Nasdaq quotation system
Level 1: inside quotes Level 2: receives all quotes but they can't enter quotes Level 3: dealers can see and post quotes SuperMontage: Centralized limit order book for Nasdaq securities that allows automatic trade execution
Diversification
Low cost, instant diversification
Shortage/Excess Demand
Low price, more quantity demanded then supplied
Professional Management
Lower research costs Portfolio managed according to specific objectives Professionals to find undervalued securities and/or engage in asset allocation strategies
Investment Trust
Management of assets - May be self- managed or managed by a third party authorised investment company
Entitlement spending is that portion of budget referred to as
Mandatory spending
An allowance is an adjustment to the tax withheld from your paycheck, based in your _________ and ________
Marital status; number of dependent a
12 b-1 charges
Marketing costs paid by the fundholders Alternative to a load, but assessed annually Maximum is 1% of assets
If your career goal is to become a commercial loan officer which one of the following is the least likely major you would select to obtain a bachelors degree
Marketing sales and service
Is
Medicare ___ funded under social security law
NYSE Market Consolidation
Merged with Archipelago ECN in 2006 Merged with Euronext in 2007 Acquired the ASE in 2008 Entering Indian and Japanese stock markets
finance company
Non-bank financial intermediary that raises money through sales of commercial paper and other securities and uses the funds to make small loans to households and firms.
A credit union is different from a commercial bank because it is
Nonprofit
Bonds Versus Notes
Notes have maturity up to and including 10 years, bonds beyond 10 years
Employees
People who work for someone else
Commission
Percentage of a sale paid to a salesperson
revenue and decrease capital
Performing carpet cleaning services on account would increase
mortgagee
Person who lends money to a real estate purchaser.
true
T/F? Equipment loans are often tied to the equipment itself, the financial position of the borrower, and the business's overall cash flow.
false
T/F? Equipment loans are often tied to the redevelopment of the business's real estate.
true
T/F? Fraud prevention occupies more resources of the banking industry than any other activity except routine processing.
true
T/F? One of the main functions of the Federal Reserve is to serve as a bank for other banks.
true
T/F? Paying off a loan early saves the consumer no money if the sum-of-digits method has been used to figure finance charges.
true
T/F? Personal loans do not require that specific purpose be stated.
false
T/F? Principal is the price paid for using money.
false
T/F? Private mortgage insurance protects the lender against loan default; it is not typically required for borrowers whose down payment is 10 percent or greater.
Shelf Registrations
SEC Rule 415 (security is preregistered and then may be offered at any time within the next two years) - 24 hour notice, any part or all of the preregistered amount may be offered -introduced in 1982, allows timing of the issues
Real Take Home Pay
Salary that includes what is lost to inflation
Unit Trust
Scope of powers of investment - As defined in trust deed
Indirect taxes
Taxes levied on a producer which the producer then passes on to the consumer as part of the price of a good Distinguished from direct taxes, such as sales taxes which are visible to the person who pays them
Account Balance
The amount in an account
Inventory
The amount of goods on hand
Loss on plant assets
The decrease in equity that results when a plant asset is sold for less than book value.
Producer Surplus
The difference between the going price and the marginal cost of producing an item
Net Income
The difference between total revenue and total expenses when total revenue is greater
Net income
The difference between total revenue and total expenses when total revenue is greater
Size distribution of income
The distribution of income among groups of income recipients defined on the basis of the size of their incomes
Corporate Profits
The dollars that exceed the costs of the corporation
Labor
The economically productive capabilities of humans, their physical and mental talents as applied to the production of goods and services
Disposable income
The income a person or household has left to dispose of after income tax has been deducted from personal income. Disposable income may either be spent on consumption or saved
Corporate Liability
The institution has the responsibility and accountability for maintaining an environment that ensures safety & quality
Mergers
The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.
Truth in Savings Act
This law requires banks to disclose, in writing, such consumer bank account terms as interest rate info, balance requirements, and the circumstances under which fees are charged.
trust department
This part of a bank would be most likely to manage money for a 12-year-old who received an inheritance.
without recourse
This phrase is a type of qualified endorsement, which limits the liability of the person endorsing the check.
Home Mortgage Disclosure Act
This requires banks to record/report data on home lending in order to ID possible discriminatory patterns.
personal injury
This type of automobile insurance coverage is designed to protect both the insured and any passengers in the insured's car.
title insurance
This type of insurance protects the insured from losses arising from an event that occurred before the policy was purchased.
reverse mortgage
This type of mortgage is repaid when the borrower dies.
defensive stocks
Those likely to have share prices that are more volatile that those of growth stocks. Most popular when economic outlook is not very positive.
Truth in Lending Act
Title 1 of the consumer credit protection act guarantees that all information about costs of a loan
Gross pay
Total earnings
Per capita income
Total income divided by the size of the population
yield
_____ on a stock is similar to the interest rate on a savings account. Otherwise known as the income return on an investment.
Income Summary account
a clearing account used only at the end of an accounting period to summarize revenues and expenses for the period.
The work sheet
a columnar sheet of paper or a computer spreadsheet on which accountants summarize information needed to make the adjusting and closing entries and to prepare the financial statements.
advertising agency
a company that acts as an intermediary between a business and the media to communicate a message to the target market
consumer reporting agency (CRA)
a company that compiles and keeps records on consumer payment habits and sells these reports to banks to calculate creditworthiness
e-business
a company that does business over an electronic network, such as making sales calls on the telephone or providing electronic bill payment services
chart of account
a complete listing of the titles and numbers of all the accounts in the ledger
bait and switch
a deceptive and illegal method of selling in which a customer, attracted to a store by an advertised sale, is told that either the advertised item is unavailable or is inferior to a higher-priced item that is available
Expense
a decrease in owner's equity resulting from the operation of a business
contra asset account
a deduction from the asset to which it relates in the balance sheet
business model
a description of how entrepreneurs plan to make money with their business concepts
conglomerate diversification
a diversification growth strategy in which a business seeks products or businesses that are totally unrelated to its own products or businesses
business plan
a document that describes a new business and a strategy to launch that business
cascading style sheets (CSS)
a feature of HTML that gives users more control over how web pages are displayed
Generation- skipping transfer tax
a federal tax on the transfer of property when its value exceeds the lifetime exemption to a person two or more generations below the generation of the transferrer (donor or decedent) e.g. a grandparent who transfers property to a grandchild, thereby skipping a child.
emotional buying motive
a feeling a buyer associates with a product, such as recognition or prestige
cookie
a file sent to a Web browser that is used to record and store information for later use
comparative financial statement
a financial statement with financial information from two accounting periods used as an analysis tool by a business owner
bundle pricing
a pricing technique in which several complementary products are sold at a single price, which is lower than the price would be if each item was purchased separately
discount pricing
a pricing technique that offers customers reductions from the regular price, some reductions are basic percentage-off discounts and others are specialized discounts
angel
a private, nonprofessional investor, such as a friend, relative, or a business associate, who funds start-up companies
Business transactions
measurable events that affect the financial condition of a business
Return on equity (ROE)
measures how well a bank is using its equity
beginning balance
merchandise inventory in the debit column of the trial balance
special journals
multicolumn journals that have columns reserved for the recording of specific types of transactions
Intangible assets Intangible assets
consist of the noncurrent, nonmonetary, nonphysical assets of a business. Companies must charge the costs of intangible assets to expense over the period benefited. Among the intangible assets are rights granted by governmental bodies, such as patents and copyrights. Other intangible assets include leaseholds and goodwill.
primary reserves
consists of vault cash and the required percentage amounts on deposit in the Federal Reserve District Bank
sales slip
form that lists the details of a sale: the date, the name of the customer, and the description, quantity, price
Merchandise inventories
goods held for sale
unclassified balance sheet
has three major categories: assets, liabilities, and stockholders' equity. classified balance sheet contains the same three major categories and subdivides them to provide useful information for interpretation and analysis by users of financial statements.
other expense
if cash short and over has a debit balance it is
transposition slide error
if trial balance doesn't equal and the difference is divisible by 9 there was probably a
Prepaid expenses
include rent, insurance, and supplies that have been paid for but all the benefits have not yet been realized (or consumed) from these expenses
secondary reserves
including securities the bank purchases from the federal government, and deposits that are due from other banks
business interruption insurance
insurance coverage against the potential losses that result from having to close a business for insurable reasons; insurance pays net profits and expenses while a business is shut down for repairs or rebuilding
collateral
item that secures the loan
Litigations
lawsuits or legal actions
personal loans
loans that dont require that a specific purpose be stated
fixed rate mortgages
loans with fixed interest rate for the life of the loan
deregulation
loosening of government control
anyone who has the check
lost check with blank endorsement can be cashed by
mail that is electronically transmitted by a computer
Annual Percentage rate
nominal rate on which interest
merger
occurs when one or more banks join or acquire another bank or banks.
NSF check
one returned by the bank because there are not sufficient funds in the drawer's checking account to cover the amount of the check
secret partner
one who is not known to the public as a partner yet participates in management.
bootstrapping
operating a business as frugally as possible and cutting all unnecessary expenses, such as borrowing, leasing, and partnering to acquire resources
niche markets
targeting particular customers in defined locations or by particular services.
sales tax
tax on the retail sale of goods and service
Marketable security
temporary investments such as short-term ownership of stocks and bonds of other companies. Such investments do not qualify as cash equivalents
distribution channel
the means by which a product or service is delivered to the customer
debt ratio
the measurement of the percentage of total dollars in a business that is provided by creditors
complexity
the number and diversity of contacts with which you must deal. In business firms that operate in complex industries have more suppliers, customers, and competitors than firms in other industries
encryption
the process of converting a text message into code
decryption
the process of converting from code into readable text
reconciling the bank statement
the process of determining any differences between the balances shown on the bank statement and the checkbook balances
journal entry
the recording of a business transaction in the journal
Indorsement
the signature or statement of purpose by the owner on the back of a negotiable instrument, which indicates the future control of the instrument.
economics
the study of how people allocate scarce resources to fulfill their unlimited wants
brand loyalty
the tendency to buy a particular brand of product
internal controls
those steps the business takes to protect cash and other assets
Ridicule
to make fun of
stockholders equity
total investment to all owners
Closing the Dividends account
transferring the balance of the Dividends account to the Retained Earnings account
Closing the Income Summary account
transferring the balance of the Income Summary account to the Retained Earnings account.
Notes payable
unconditional written promises by the company to pay a specific sum of money at a certain future date.
materiality
use GAAP principles when accounting
time period
use fiscal periods for accounting
false
T/F? The National Banking Act of 1864 founded an adaptable, flexible system of central banking for the US.
true
T/F? The overwhelming majority of businesses in the US can be classified as small businesses.
add-on clause
Provision contained in an installment contract. An add-on clause creates a security interest in the earlier goods until full payment is made on the new goods. By this clause, the earlier purchases serve as the security for new purchases.
true
T/F? Every business, no matter how large or small, needs to disburse and collect cash to complete business transactions.
false
T/F? First step in the mortgage approval process is documentation.
false
T/F? Foreign bank branches operating in the US can accept deposits from US citizens only less than $100,000.
approach
a salesperson's first contact with a customer
campaign
a series of related promotional activities with a similar theme
competitive advantage
a trait that makes a product more desirable than its competitors
post-closing trial balance
a trial balance taken after the closing entries have been posted.
Torts
a wrongful act or an infringement of a right (other than under contract) leading to civil legal liability.
Solvency
ability to pay septs as they are due
objective evidence
accounting entries based on facts
personal property
all property not classified as real property
customer benefit
an advantage of personal satisfaction that a customer will get from a product
grace period
an amount of time you have to pay the bill in full and avoid any finance charges
Liability
an amount owed by a business
Precedent
an example that is used to justify similar occurrences at a later time
Revenue
an increase in owner's equity resulting from the operation of a business
going concern
business will continue on to carry commitments and obligations
average daily balance method
balances for each day are added and divided by number of days in billing cycle to yield an average figure on which the finance charge is calculated
bank currency
bank notes
drawee
bank on which the check is written
recession
decline in total production lasting a minimum of two consecutive quarters
real property
land and anything attached to the land
accounts payable
the amount a business owner owes to creditors
end of a fiscal period
when is periodic inventory taken?
special endorsement
when it's written "pay to the order of" and the new check owner's name
Mitigating Factors
-Performance-based compensation -Boards of directors may fire managers -Threat of takeovers
Normal profit
...
Double-declining balance method of depreciation
A declining-balance rate that is two times the straight-line rate.
joint-stock company
A joint-stock company is a business entity which is owned by shareholders.
Special Amount Column
A journal amount column headed with an account title
Special amount column
A journal amount column headed with an account title
Unit of measurement
Business transactions are stated in numbers that have common values; that is, using a common unit of measurement
Long position
Buy first and then sell later Bullish
Venture
A risky or daring undertaking; to expose to danger; to dare
Contributory Negligence
A rule in tort law that completely bars the plaintiff from recovering any damages if the damage suffered is partly the plaintiff's own fault; used in a minority of states.
Firms
Economic entities which buy or employ factors of production and organize them to create goods and services for sale
qualified endorsement
Endorsement that adds certain words which limit, qualify, or restrain the endorser's liability. For example, adding the term 'without recourse.'
Salary
Pay by the week or month
drawer
Person who signs a draft.
Short Sales
Required initial margin: usually 50% but more for low priced stocks
Investment Trust
Scope of powers of investment - Effectively unlimited subject to approval by board of directors
true
T/F? Commercial lending can apply to individuals as well as businesses.
false
T/F? Compound interest uses the same principal amount every time it is calculated.
Nominal account
Temporary accounts
Account balance
The amount in an account
short position
The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.
Writ of Certioria
a decision by the Supreme Court to hear an appeal from a lower court
Automated Teller Machines (ATMs)
a machine that can perform almost any banking action
payable
This word, when written on a balance sheet, indicates an amount owed.
Pain and Suffering Damages
Usually 5 times the medical expenses
Break even point
Volume of sales that must be made to cover all of the expenses of a business
credit unions
Where do you find share draft accounts?
FICO score
a 3 digit number that credit granters can use in making a loan approval decision
asset
anything of value
Asset
anything of value that is owned
dividend
payment towards owners of the business
due diligence
the investigation and analysis a prudent investor does before making business decisions
chart of accounts
the list of accounts a business uses in its operation
debit cards
transfer money from a persons designated account to the account of the retailer
equation of exchange
(M * V = P * Q) M = money supply V = velocity of money P = average price level of goods Q = index of expenditures Explains relationship between money and prices.
Business Firms
(net borrowers)
Investors can choose desired risk level
-Bond vs. stock of company -Bank CD vs. company bond -Risk-and-return trade-off
Call Money Rate
-Investors who buy stock on margin borrow money from their brokers to purchase stock. The borrowing rate is the call money rate. -The loan may be 'called in' by the broker.
Primary market
-Newly issued securities offered to public -Investment banker typically "underwrites" issue
Efficient Markets
-Securities should be neither underpriced nor overpriced on average -Security prices should reflect all information available to investors -Choice of appropriate investment-management style based on belief in market efficiency
joint account
2 or more owners
Checking account
A bank account from which payments can be ordered by a depositor
Debit Card
A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder.
Dishonored check
A check that a bank refuses to pay
Dishonored Check
A check that a bank refuses to pay.
judgment
A court order that places a lien on a debtor's property as security for a debt owed to a creditor.
Inflation
A general rise in the average level of all prices
Inferior good
A good for which the demand decreases when income increases When a household's income goes up, it will buy a smaller quantity of such a good
General Ledger
A ledger that contains all accounts needed to prepare financial statements.
Franchise
A legal agreement that gives an individual the right to market a company's products or service in a particular area
bond indenture
A legal contract between the borrower/creditor bondholders with details about the bond issue and any security involved.
Incorporation
A legal difference between the owners of a company and the business itself. This ensures owners are protected from any loss made by the company.
Subpoena
A legal document summoning someone to court
Common Law
A legal system based on custom and court rulings
euro
A new currency used by members of the European union.
Code of Conduct
A statement that guides the ethical behavior of a company and its employees.
Price Weighted
Add up the prices of the stock and divide by a given divisor. Higher priced shares get more weight. (Bad, High price doesn't always mean it is big)
Personal property
All property not classified as real property.
Credit
An amount recorded on the right side of a T account
Credit
An amount recorded on the right side of a t account
Intangible asset
An asset that does not have physical substance.
Assignment
An assignment (Latin cessio) is a term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party—the assignor—to another party—the assignee.[1] The details of the assignment determines some additional rights and liabilities (or duties).
wrongful discharge
An employer may not fire a worker for a reason that violates basic social rights, duties or responsibilities
Accounting equation
An equation showing the relationship among assets, liabilities, and owner's equity
Accounting Equation
An equation showing the relationship among assets, liabilities, and owner's equity, Assets = Liabilities + Owner's Equity
financial institution
An establishment that focuses on dealing with financial transactions, such as investments, loans and deposits.
Waiver
An intentional, knowing relinquishment of a legal right.
Sales invoice
An invoice used as a source document for recording a sale on account
Partnership
An unincorporated business owned by two or more people
Derivatives Securities Options
Basic Positions -Call (buy/sell) -Put (buy/sell) Terms - Exercise Price - Exercise Date
D
Bonds in default for non-payment of principal and/or interest
municipal bonds
Bonds issued by a local government, or its agencies. Most likely would have the lowest interest rate.
Check register
Book in which you record the dates, amounts, and names of the people or businesses to whom you have written checks
Voluntary Exchange
Both traders expect to benefit as a result of an exchange between the two.
Security selection and analysis
Choosing specific securities within asset class
Punitive Damages
Compensation awarded to a plaintiff that goes beyond reimbursement for actual losses and is imposed to punish the defendant and deter such conduct in the future. Also called exemplary damages.
Direct competition
Competition from a business that makes most of its money selling the same or similar products or services as another business
Indirect competition
Competition from business that makes only small amount of money selling the same or similar products or services as another business
Computer hardware
Computers an the equipment used with them
Commercial Law
Concerned with business transactions and the operation of business establishments
Consideration
Consideration is the concept of legal value in connection with contracts. It is anything of value promised to another when making a contract. It can take the form of money, physical objects, services, promised actions, abstinence from a future action, and much more. Consideration to create a legally enforceable contract entails a bargained for, legal detriment incurred by the promisee OR a legal benefit to the promisor.[1] Under the notion of "pre-existing duties", if either the promisor or the promisee already had a legal obligation to render such payment, it cannot be seen as consideration in the legal sense.
credit unions
Depositors are the owners of ______.
Expectation interest
Designed to put the injured party in the position she would have been in had both sides fully performed their obligations
Proving Cash
Determining that the amount of cash agrees with the accounting records.
Repurchase Agreements (RPs) and Reverse RPs
Discount
Dividends
Distributions of profits to shareholders by corporations
listing agreement
Document allowing a real estate broker's firm to market a property to be sold.
Gross sales
Dollar amount of all sales, including returns
Partner
Each member of a partnership
Commission Broker
Employee of a member firm, processes orders for the firm, earns a commission.
False imprisonment
False imprisonment is a restraint of a person in a bounded area without justification or consent. False imprisonment is a common-law felony and a tort. It applies to private as well as governmental detention.
Investment Bankers
Firms that specialize in primary market transactions
An example of a recent and successful tax credit is
First time homebuyer tax credit
25-28%
Generally speaking, housing costs should not exceed _____ of gross monthly income.
Forbearance
Giving away ones rights for a promise. (Uncle promises you 25K to not drive until 21, give up your right to drive)
Bonds
Have lower average rates of return (under 6%) Have not lost more than 13% of their value in any one year
AAA and AA
Highest bond rating; high credit-quality investment grade.
Standard of Living
Illustrates what opportunities are expected for a certain person
Unit Trust OEIC
Income tax on dividend income and interest income. Capital gains tax on disposals.
What is the most common place identity theft occurs?
Internet
Assets
Items of value owned by a business
employment law
Large area of law which covers all of the aspects of the employer and employee relationship; consists of thousands of laws; includes many laws enacted to protect workers
Separation of Ownership and Management
Large size of firms requires separate principals and agents
fraud
Largest cause of loss to banks.
Subprime loans:
Loans above 80% of home value, no underwriting criteria, higher default risk
September 2008: Mortgage-market collapse
Major investment banks bankrupt; purchased/reorganized
AA and BBB
Medium credit-quality investment grade
Which is the most appropriate to use to create s balance sheet
Microsoft excel
Secondary market
Preexisting securities traded among investors
Presentment for acceptance
Presentment for acceptance refers to presenting of a bill of exchange to the drawee named in the bill of exchange for his acceptance and agreement to pay the bill, usually at some time in the future. It is an act which amounts to a notification of the holding of a bill of exchange with a request to accept, accompanied by the bill.
Which market structure is a price taker?
Pure competition
Journalizing
Recording transactions in a journal
Journalizing
Recording transactions in a journal.
Series HH Bond
Series HH bonds are sold in amounts from $500 to $10,000. They may be redeemed after only six months, and their interest is exempt from state and local taxes.
Grounds for Divorce
Sexual harassment Adultery[3] Alcoholism[3] Disability[3] Desertion[3] Imprisonment[3] Domestic violence No-fault Divorce
Capital account
That part of the balance of payments accounts which records a country's lending and borrowing transactions
Ceteris paribus
The Latin for "other things being equal."
Scarcity
The fact that human wants exceed the means of satisfying them
Agent
The law of agency is an area of commercial law dealing with a set of contractual, quasi-contractual and non-contractual fiduciary relationships that involve a person, called the agent, that is authorized to act on behalf of another (called the principal) to create legal relations with a third party.[1] Succinctly, it may be referred to as the equal relationship between a principal and an agent whereby the principal, expressly or implicitly, authorizes the agent to work under his or her control and on his or her behalf. The agent is, thus, required to negotiate on behalf of the principal or bring him or her and third parties into contractual relationship. This branch of law separates and regulates the relationships between: agents and principals (internal relationship), known as the principal-agent relationship; agents and the third parties with whom they deal on their principals' behalf (external relationship); and principals and the third parties when the agents deal. Authority: Actual authority can be of two kinds. Either the principal may have expressly conferred authority on the agent, or authority may be implied. Authority arises by consensual agreement, and whether it exists is a question of fact. An agent, as a general rule, is only entitled to indemnity from the principal if he or she has acted within the scope of her actual authority, and may be in breach of contract, and liable to a third party for breach of the implied warranty of authority. In tort, a claimant may not recover from the principal unless the agent is acting within the scope of employment. Express actual authority means an agent has been expressly told he or she may act on behalf of a principal. Implied actual authority, also called "usual authority", is authority an agent has by virtue of being reasonably necessary to carry out his express authority. As such, it can be inferred by virtue of a position held by an agent. For example, partners have authority to bind the other partners in the firm, their liability being joint and several, and in a corporation, all executives and senior employees with decision-making authority by virtue of their position have authority to bind the corporation. Apparent Authority: Apparent authority (also called "ostensible authority") exists where the principal's words or conduct would lead a reasonable person in the third party's position to believe that the agent was authorized to act, even if the principal and the purported agent had never discussed such a relationship. For example, where one person appoints a person to a position which carries with it agency-like powers, those who know of the appointment are entitled to assume that there is apparent authority to do the things ordinarily entrusted to one occupying such a position. If a principal creates the impression that an agent is authorized but there is no actual authority, third parties are protected so long as they have acted reasonably. This is sometimes termed "agency by estoppel" or the "doctrine of holding out", where the principal will be estopped from denying the grant of authority if third parties have changed their positions to their detriment in reliance on the representations made. Liability of agent to third party: If the agent has actual or apparent authority, the agent will not be liable for acts performed within the scope of such authority, so long as the relationship of the agency and the identity of the principal have been disclosed. When the agency is undisclosed or partially disclosed, however, both the agent and the principal are liable. Where the principal is not bound because the agent has no actual or apparent authority, the purported agent is liable to the third party for breach of the implied warranty of authority. Liability of agent to principal: If the agent has acted without actual authority, but the principal is nevertheless bound because the agent had apparent authority, the agent is liable to indemnify the principal for any resulting loss or damage. Liability of principal to agent: If the agent has acted within the scope of the actual authority given, the principal must indemnify the agent for payments made during the course of the relationship whether the expenditure was expressly authorized or merely necessary in promoting the principal's business.
Salary
The money paid for employee services
Account title
The name given to an account
Account Title
The name given to an account.
Bailor
The owner of the personal property that is being temporarily transferred as part of a bailment
Pay period
The period covered by a salary payment
buying on margin
The practice of using borrowed money to purchase securities.
Cost of merchandise
The price a business pays for goods it purchases to sell
Exchange rate
The price of one country's currency in terms of another's
Business Ethics
The use of ethics in making business decisions.
Monetary policy
The use of the central bank's power to control the domestic money supply to influence the supply of credit, interest rates and ultimately the level of real economic activity
smart cards
These have embedded microchips, and can be reused as value can be stored, used, and restored by banks/merchants.
banks
These institutions are essential to maintaining the economy and distribute the medium of exchange.
Electronic Funds Transfer Act
This act describes the rights/liabilities/responsibilities of customers who use automated funds transfer services.
Investment Trust
Through a stockbroker
2
a business has ___ types of entities
fixed exchange rate
a monetary valuation of one country's currency is tied to the valuation of another country's currency
corporate venture
a new venture started inside a larger corporation
crawler
a program used to compile information about web sites
buying process
a series of steps a customer goes through when making a purchase
compound interest
adding interest to the principal and paying interest on the new total is called ""
redlining
banks refusing to lend to certain neighborhoods
commodity money
based on some item of value
accumulated earnings
each employee's year to date gorss earnings
FICA tax
employer and employee both pay
salary
fixed amount of money paid to an employee for each pay period
subprime rates
higher than normal to offset the increased risk represented by a less-than-perfect borrower
restrictive endorsement
limits the use of the instrument to a means specified by the endorser
Combination
on some trades both are paid
historical costs
original cost of plant asset
Round Trip
purchase and a sale
cost principle
purchases recorded at cost
excess reserves
reserves held by a bank beyond its reserve requirement
liquidity risk
risk that a bank will have to sell its assets at a loss to meet its cash demands`
desc____ research
the collection of information to determine the ___ of something, such as developing a customer profile. The information may include age, gender, occupation, income, and buying habits and can be collected through questionnaires, interviews, or observations
ledger (general ledger)
the complete collection of all the accounts of a company. it may be in loose-leaf form, in a bound volume, or in computer memory
inventory
the items of merchandise the business has in stock
stockholder's equity
the owner's interest in a corporation
voiding a check
writing the words void in large letters across the top of a check
Business Tort
wrongful interference with the business rights of another
Agency Issues
- Most are home mortgage related -Issuers: FNMA/FHLMC/GNMA/Federal Home Loan Banks
Fiscal year
12 consecutive months
teller
An entry-level position at a financial institution.
Free Alongside
Delivered alongside vessel
payee
Receiver of funds (on a check).
Ethics
Study of moral choices and values
revenue
income
Bill of Rights
First 10 Amendments
Fixed-income (debt) securities
-Money market instruments -Bonds -Preferred stock
Antitrust Law
Laws that seek to make sure businesses compete fairly, and prevent unfair partnerships
Illusory
Misleading, deceptive; lacking in or not based on reality
Net loss
The different between tots revenue and total expenses when total expenses is greater
Assessed value
The value of an asset determined by tax authorities for the purpose of calculating taxes.
negotiation
This term, as it applies to a negotiable instrument, means the ability of the holder to obtain its value.
disposable income
money people have to spend after paying for necessary expenses
debt capital
money raised by taking out loans, which must be repaid with interest
FOB shipping point
paid by supplier
appointments
the furniture, equipment, and accessories contained in a building
Electronic Funds Transfer
A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents.
Memorandum
A form on which a brief message is written describing a transaction
Receipt
A business form giving written acknowledgement for cash received
Service business
A business that performs an activity for a fee
Service Business
A business that performs an activity for a fee.
Petty Cash Slip
A form showing proof of a petty cash payment.
Corporation
A Corporation, chartered by the state in which it is headquartered, is considered by law to be a unique entity, separate and apart from those who own it. A Corporation can be taxed; it can be sued; it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes. Advantages of a Corporation • Shareholders have limited liability for the corporation's debts or judgments against the corporation. • Generally, shareholders can only be held accountable for their investment in stock of the company. (Note however, that officers can be held personally liable for their actions, such as the failure to withhold and pay employment taxes. • Corporations can raise additional funds through the sale of stock. • A Corporation may deduct the cost of benefits it provides to officers and employees. • Can elect S Corporation status if certain requirements are met. This election enables company to be taxed similar to a partnership. Disadvantages of a Corporation • The process of incorporation requires more time and money than other forms of organization. • Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations. • Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible from business income; thus this income can be taxed twice. Subchapter S Corporation A tax election only; this election enables the shareholder to treat the earnings and profits as distributions, and have them pass through directly to their personal tax return. The catch here is that the shareholder, if working for the company, and if there is a profit, must pay his/herself wages, and it must meet standards of "reasonable compensation". This can vary by geographical region as well as occupation, but the basic rule is to pay yourself what you would have to pay someone to do your job, as long as there is enough profit. If you do not do this, the IRS can reclassify all of the earnings and profit as wages, and you will be liable for all of the payroll taxes on the total amount. Limited Liability Company (LLC) The LLC is a relatively new type of hybrid business structure that is now permissible in most states. It is designed to provide limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. Formation is more complex and formal than that of a general partnership. The owners are members, and the duration of the LLC is usually determined when the organization papers are filed. The time limit can be continued if desired by a vote of the members at the time of expiration. LLC's must not have more than two of the four characteristics that define corporations: Limited liability to the extent of assets; continuity of life; centralization of management; and free transferability of ownership interests. Federal Tax Forms for LLC Taxed as a partnership in most cases; corporation forms must be used if there are more than 2 of the 4 corporate characteristics, as described above. In summary, deciding the form of ownership that best suits your business venture should be given careful consideration. Use your key advisors to assist you in the process.
Tariff
A tax imposed on an imported good
Blank endorsement
An endorsement consisting only of the endorser's signature
Money market instruments
Bank certificates of deposit, T-bills, commercial paper, etc.
Eurodollars
BEY*
Allocative Efficience
Correct mix of products that benefits society the most
Sales slip
Sales invoice
Accounting period cycle
Changes in financial information are reported for a specific period of time in the form of financial statements
Adequate disclosure
Financial statements contain all information necessary to understand a business's financial condition
debt ratio
Debt divided by Income.
Securities Acts of 1933
Requires full disclosure of information by issuers of new securities
68%
What is the current home ownership rate in the US?
Non-disclosure
Witholding info
Disrepute
disgrace, loss of reputation
economic base
the major industries that provide employment in an area
federal tax deposit coupon
(Form 8109) prepared and sent with the check to show the amount of taxes being sent to the federal governement
Counterclaim
A claim made by a defendant in a civil lawsuit against the plaintiff. In effect, the defendant is suing the plaintiff.
portfolio
A collection of stocks held by an individual or group.
Docket
A court's calendar, showing the schedule of cases it is to hear
Income statement
A financial statement showing the revenue and expenses for a fiscal period
Balance Sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date.
Competitive firm
A firm operating under conditions of perfect competition, a market condition in which no individual buyer or seller has any significant influence over price. A competitive firm is a price taker, responding to whatever price is established in the market for its output
Ledger
A group of accounts
Schedule of accounts payable
A listing of vendor accounts, account balances, and total amount due to all vendors
participating preferred stock
A preferred stock which, in addition to a regular dividend, also pays an additional dividend (the participating dividend) when common stock dividends exceed a specified amount.
Offer
A proposal by one party to another intended to create a legally binding agreement. Terms must be clear, definite and certain
common stock
A security that represents ownership in a corporation. Most of the shares of stock traded on the major stock exchanges are this type of stock:
Purchases journal
A special journal used to record only purchases of merchandise on account
Sales journal
A special journal used to record only sales of merchandise on account
Cash payments journal
A specific journal used to record only cash payment transactions
Long Arm Statute
A state statute that permits a state to obtain personal jurisdiction over nonresident defendants. A defendant must have certain "minimum contacts" with that state for the statute to apply.
State unemployment tax
A state tax used to pay benefits to unemployed workers
Assault
A threatened or attempted physical attack by someone who appears to be able to cause bodily harm if not stopped
Novation
A three-way agreement in which the obligor transfers all rights and duties to a third party.
tax-sheltered annuity
A type of annuity that allows an employee to make contributions from his or her income into a retirement plan. Contributions are deducted from the employee's income and are not taxed until withdrawal.
mutual company
A type of insurance company that returns part of the profits of the company to its policyholders.
Money Order
A way for people with no checking account to send money by mail
Employee
A worker who is hired to perform a job
Writ of Execution
A writ to carry out a court order, usually arising from a judgment.
Certificate of Deposit
A written acknowledgment of the receipt of money and its promise to pay back the money, usually with interest on the due date
Promissory Note
A written contract with a promise to pay a supplier a specific sum of money at a definite time
Profitability
Ability to generate income
Punitive Damages
Against a company generally adds up to be about 10% of yearly profits
Consensus
Agreement among a group of people
Accord
Agreement, state of harmony
When handling customer inquiries the most important thing to do is
Alwyas follow policy and procedures
Liability
An amount owed by a business
broker
An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.
Defendant
An individual or group being sued or charged with a crime.
active partner
An individual who runs the day-to-day operations of a business.
Restrictive endorsement
And endorsement restricting further transfer of a check's ownership
passbook accounts
Another way of saying "savings accounts."
Money
Anything generally acceptable in exchange Money serves a number of functions: it is a medium of exchange, it is used as a unit of account, and it can be used as a store of value In its latter use, it is an alternative to holding value in the form of goods or other types of financial assets such as stocks or bonds
Asset
Anything of value that is owned
Auditors: Watchdogs or consultants?
Arthur Andersen and Enron
Certificates of deposit
BEY*
Mortgage Derivatives
CDOs, Ratings agencies paid by issuers; pressured to give high ratings
Medicare/Medicaid
Examples of social insurance programs overseen by the Dept. of Health/Human Services.
Market Order
Execute immediately at the best price
Extortion
Extortion (also called shakedown, outwresting, and exaction) is a criminal offense of obtaining money, property, or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime groups.
during inflation _____ gives the highest net income (lowest cost of goods sold and highest merchandise available for sale)
FIFO
Factors of Production
Factors of production fall into three main groups - land, labor, and capital - and sometimes include entrepreneurship.
Code of ethics
Level of ethical behavior demanded by an individual, a business, or a culture
Mixed Market economy
Limtited, but some, government involvement in the economy
NOW
Negotiable Order of Withdrawal. An interest-bearing checking account at a bank or savings and loan.
Market economy
No government involvement in the economy
Drawee
One ordered to pay the money
Unit Trust OEIC
Open-ended
Sole proprietorship
Proprietorship
Quasi-Contract Relief
Quasi-Contract Relief
true
T/F? Credit cards issued by banks are a form of lending.
false
T/F? It is illegal for banks to charge higher interest rates for loans than they pay depositors.
true
T/F? The prime rate is usually the same among major banks.
Ethics
Ethics, sometimes known as moral philosophy, is a branch of philosophy that involves systematizing, defending and recommending concepts of right and wrong conduct, often addressing disputes of moral diversity.
Payroll taxes
Taxes based on the payroll of a business
$100,000
The FDIC guarantees bank deposits against bank failures for amounts up to _____.
Federal Energy Regulatory Commission
The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. FERC also reviews and authorizes liquefied natural gas (LNG) terminals, interstate natural gas pipelines and non-federal hydropower projects.
SEC
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government. It holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, the nation's stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States.
Entrepreneurship
The ability and willingness to undertake the organization and management of production As well as making the usual business decisions, entrepreneurship is often associated with the functions of innovating and bearing risks
Public Policy
The course of action the government takes in response to an issue or problem
W-3
The form that contains information necessary to determine the employee's net earnings is a
Interest
The payment made for the use of funds to create capital goods with
Customers
The people who buy the products and services companies offer
Natural rate of unemployment
The rate of unemployment that would exist when the economy is operating at full capacity. It would be equal to the amount of frictional unemployment in the system
index
The rate to which a lender's interest rate is tied.
Beneficiary
The recipient of funds, titles, property, and other benefits
Double-Entry Accounting
The recording of debit and credit parts of a transaction
Double-entry accounting
The recording of debit and credit parts of a transaction
Transfer of title of goods
Transfer (conveyance) of title to a good or property from its seller to its buyer. In trading, this transfer is determined by the terms of sale (such as FOB, CIF, C&F) and is ensured by the use of standard commercial terminology such as INCOTERMS.
Posting
Transferring information from a journal entry to a ledger account
Posting
Transferring information from a journal entry to a ledger account.
Trustee
Trustee (or the holding of a trusteeship) is a legal term which, in its broadest sense, can refer to any person who holds property, authority, or a position of trust or responsibility for the benefit of another, also a trustee can be a person who is allowed to do certain tasks but not able to gain income.[1] Although the strictest sense of the term is the holder of property on behalf of a beneficiary,[1] the more expansive sense encompasses persons who serve, for example, on the Board of Trustees for an institution that operates for the benefit of the general public. Also a person in the local government.
savings and loan association
Type of financial institution created for the purpose of promoting home ownership and which must make a majority of its loans for housing-related purposes.
Fair Credit Reporting Act
US Federal law that protects and regulates the collection, dissemination, and use of consumer information, including consumer credit information that credit bureaus may collect.
Involuntary unemployment
Unemployment caused by a deficiency in aggregate demand
Unit Trust
Units
Net Asset Value
Used as a basis for valuation of investment company shares Selling new shares Redeeming existing shares
Wages & Hours
Wages & Hours The Fair Labor Standards Act (FLSA) prescribes standards for wages and overtime pay, which affect most private and public employment. The act is administered by the Wage and Hour Division. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. For nonagricultural operations, it restricts the hours that children under age 16 can work and forbids the employment of children under age 18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the employment of children under age 16 during school hours and in certain jobs deemed too dangerous.
street name
When a brokerage holds its clients' stock certificates, the stock is said to be held in _____.
Prepaid insurance
When a company pays an insurance policy premium in advance, the purchase creates this asset.
Profit
When a firm's revenues exceed its costs, profit is the difference between the two
Comparative Advantage
When a person has lesser opportunity cost in creating something than someone else
Check
a business form ordering a bank to pay cash from a bank account
direct skip
a generation skipping transfer of an interest in property to skip a person; a direct skip is subject to the federal generation-skipping transfer tax and the federal gift or estate tax.
depreciable asset
a manufactured asset such as a building, machine, vehicle, or piece of equipment that provides service to a business
Overall Purpose of Financial Markets
Facilitate low cost investment: 1. Bring together buyers and sellers at low cost 2. Provide adequate liquidity by minimizing time and cost to trade and promoting price continuity. 3. Set and update prices of financial assets - reduces info costs associated with investing
payroll clerk
a person who is responsible for preparing the payroll
achiever
a person with a record of success
balance sheet
a report of the final balances of all asset, liability, and owner's equity accounts at the end of an accounting period
accounting system
a set of records and the procedures and equipment used to perform the accounting functions
liquid asset
anything that can be readily exchanged, like cash
Accounts payable
are amounts owed to suppliers for goods or services purchased on credit.
Smart Card
are credit, debit or other types of cards that have embedded microchips
Commercial banks
are the institutions commonly thought of as banks
accounting transaction
business activity/event that causes measurable change in the accounting equation
Financial Supermarkets
Charles Schwab - Avoid a direct load, but may cost you more in expenses - Low cost switching even between fund families and easier to interpret record keeping
mobile banking
customers can execute a variety of banking transactions with mobile phones
flexible exchange rate
enables currencies to fluctuate based on market conditions
credit cards
entitles a charge customer to charge merchandise
Petty cash debit and cash credit
entry to establish petty cash
false
federal income tax is withheld in all but two states
Adjusting entries
journal entries made at the end of an accounting period or at any time financial statements are to be prepared to bring about a proper matching of revenues and expenses.
Determinant of Demand
Consumer Income, Substitute good, complimentary good, preferences, future expectations, number of buyers
payroll
list of a business's employees and the payment due to each employee for a specific pay period
installment loan
loan for which the amount of the payments, the rate of interest, and the number of payments are fixed.
income summary
not on any financial statements
HOEPA loan
Consumer protection legislation designed to shield homeowners from abusive loan practices. Stated that lenders must make disclosures 3 days before closing, may not require balloon payments in less that 5 years on most loans, and also may not make loans that do not adequately consider the borrower's ability to repay.
restrictive endorsement
Endorsement which limits further negotiability of a negotiable instrument. Ex: Words like "For Deposit Only" on the back of a check block its cashing over the counter.
Balance sheet
reflects company's sovlency & financial position
full disclosure
report full information that gives full report
restrictive endorsement
restricts or limits how a check may be handled
previous balance method
take amount owed at beginning and calculate interest from that
sum-of-digits method
takes the total finance charge, divides it by the number of months in the loan term and assigns a higher ratio of interest to the early payments
When approving loans for new customers, it is important to follow the following anti discrimination law:
Equal credit opportunity act
climate
the prevailing atmosphere or attitude in a business
Ethics
the principles of right and wrong that guide an individual in making decisions
business ethics
the study of behavior and morals in a business situation
In terms of number, most firms are corporations.
False
F
T/F? All banks are organized as corporations.
false
T/F? There was no form of paper currency in colonial America.
Return on investment
The ration of the money earned on investment relative to the amount of the investment.
Social cost
The real cost to society of having a good or service produced, which may be greater than the private costs incorporated by the producer in its market price
assessed value
The value of an asset determined by tax authorities for the purpose of calculating taxes
Electronic mail
Use the send and receive electronic messages from anyone in the world; also called email
point
Value equal to 1 percent of a mortgage loan.
Current dollar
Values which have not been adjusted to remove the influence of changes in the general price level.
asset or liability
adjusting entry usually reversed if its these accounts
Fiscal Policy
a government policy for dealing with the budget (especially with taxation and borrowing)
Genuine Agreement
agreement to enter into a contract that is evidenced by words or conduct between the parties
credit cards
allow consumers to pay all or part of their bills each month and finance the unpaid balance
Late trading:
allowing some investors to purchase or sell after NAV has been determined for the day
Accounts receivable
amounts owed to a business by customers
accounts payable
amounts owed to supplier for previous purchases
accrual basis
an accounting system in which income is recorded when it is earned, and expenses are recorded when they are paid
educational activity
an action, such as a human relations workshop, that prepares employees for advancing in the organization
cooperative advertising
an arrangement in which advertising costs are divided between two or more parties
qualified endorsement
an attempt to limit the liability of the endorser without limiting an instruments further negotiability
digital certificate
an e-commerce security feature that establishes the certificate holder's identity and that proves companies are who they say they are
B2B community
an electronic marketplace where companies can bid on products and services or offer up their services for bid
consumer pretest
a procedure in which a panel of consumers evaluate an ad before its release
contract carrier
a shipping company that transports freight under contract with one or more ____
Eurodollars
-Dollar denominated (time) deposits held outside the U.S. -Pay a higher interest rate than U.S. deposits.
Underpricing
-Post initial sale returns average about 10% or more, "Winner's curse" problem? -Easier to market the issue, but costly to the issuing firm
negligence per se
1)the defendant violated the statute, 2)the statute provides for a criminal penalty (i.e., fines or imprisonment) but not by civil penalties,[1] 3)the act caused the kind of harm the statute was designed to prevent, and 4)the plaintiff was a member of the statute's protected class.
affiliate program
an online marketing agreement in which member web sites drive targeted traffic to an e-commerce merchant in return for a commission on the sales generated at the merchant site
draft
an order signed by one party that is addressed to another party
calendar year
the accounting period of time from January 1 to December 31
burglary
the act of breaking into and entering a building with the intent to commit a felony
disintermediation
the removal of intermediaries, such as wholesalers or retailers, from business transactions between producers and consumers
competition
the rivalry between businesses for consumers' dollars
debit
what type of balance on the trial balance does merchandise inventory have at the beginning of a fiscal period on worksheet
moral hazard
when a borrower takes greater risks if they think the harm they will incur from those risks will somehow be minimalized
negative equity
when amount owed on a home is more than current value on a home
credit rationing
when banks refuse to provide a loan or when they lend less than the customer requested
stagflation
when inflation rises but the economy as a whole is not doing well
bank run
when many people try to withdraw their money at once
Execratory Contract
when parties have NOT yet performed their agreement
Stop Loss order:
-Becomes a market sell order when the trigger price is encountered. -You own stock trading at $40. You could place a stop loss at _38__. The stop loss would become a market order to sell if the price of the stock hits 38___.
Major Classes of Financial Assets or Securities
-Fixed-income (debt) securities -Common stock (equity) -Derivative securities
Listed Put Option (Derivative Markets)
-Holder the right to sell 100 shares of the underlying stock at a predetermined price on or before some specified expiration date.
Sales force distributed
-Recommended by a broker or planner -Usually will have a front end load -May be revenue sharing on sales force distributed -Potential conflict of interest
Contract Steps
1 Intent 2 Offer 3 Timeframe 4 Obligations 5 Representations 6 Consideration 7 Arbitration 8 Acceptance
Debit card
A bank card that, when making purchases, automatically deducts the amount of the purchase from the checking account of the cardholder
full-service broker
A broker that provides a large variety of services to its clients, including research and advice, retirement planning, tax tips, and much more. Commissions much higher than those at discount brokers.
stale check
A check that is dated 6+ months before it is presented for payment/deposit is called _____.
Withholding allowance
A deduction from total earnings for each person legally supported by a taxpayer, including the employee
insider
A director or senior officer of a company, as well as any person or entity that owns > 10% of a company's voting shares. Must comply with strict disclosure requirements with regard to the sale/purchase of their company's shares.
Laissez-faire
A doctrine advocating a minimum role for government in the economy, such as providing for defence against external enemies, a system of law to protect individuals and their property, and production of such goods and services which for some reason are needed, but would not be produced by private firms
Constitution
A document which spells out the principles by which a government runs and the fundamental laws that govern a society
Independent Contractor
A person who performs services for another under an express or implied agreement and who is not subject to the other's control, or right to control.
Bailee
A person who receives personal property from another as a bailment.
Business broker
A person who sells businesses for a living
Trial balance
A proof of the equality of debits and credits in a general ledger
401(K)
A qualified plan established by employers to which eligible employees may make tax-deferred contributions (often matched by the company) to a trust.
defined contribution plan
A retirement plan in which a certain amount or percentage of money is set aside each year by a company for the benefit of the employee. There are restrictions as to when and how you can withdraw these funds without penalties.
Sale on Account
A sale for which cash will be recieved at a later date
Ethics
A set of moral principles that may be held by a society, a group or an individual.
Cash receipts journal
A specific journal used to record only cash receipt transactions
currency swap
A swap that involves the exchange of principal and interest in one currency for the same in another currency. It is considered to be a foreign exchange transaction and is not required by law to be shown on a company's balance sheet.
Keogh Plan
A tax deferred pension plan available to self-employed individuals or unincorporated businesses for retirement purposes. Can be set up as either a defined-benefit or defined-contribution plan, although most plans are defined contribution.
Sales tax
A tax on a sale of merchandise of services
Cyber Tort
A tort committed via the Internet.
Post-closing trial balance
A trial balance prepared after the closing entries are posted
Will
A will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his or her estate and provides for the distribution of his property at death. For the devolution of property not disposed of by will, see inheritance and intestacy. Though it has at times been thought that a "will" was historically limited to real property while "testament" applies only to dispositions of personal property (thus giving rise to the popular title of the document as "Last Will and Testament"), the historical records show that the terms have been used interchangeably.[1] Thus, the word "will" validly applies to both personal and real property. A will may also create a testamentary trust that is effective only after the death of the testator.
Libel
A written defamation of a person's character, reputation, business, or property rights.
Constructing Market Indices
A) What Stocks to include B) Weighting Schemes
compound interest
Adding interest to the principal and paying interest on the new total is called _____.
Resources
All those things which can be used to produce economic satisfaction
Under the federal rules of evidence ___________ documents created in the cushiness environment are ____________ in the court of law
All; admissible
Audit
An IRS investigation of a tax return
Controlling account
An account in a general ledger that summarizes all accounts in a subsidiary ledger
T Account
An accounting device used to analyze transactions
Debit
An amount recorded on the left side of a T Account
Jurisdiction
An area of authority or control; the right to administer justice.
Gain on plant assets
An increase in equity that results when a plant asset is sold for more than book value.
Revenue
An increase in owner's equity resulting from the operation of a business
Purchase invoice
An invoice used as a source document for recording a purchase on account transaction
Sales Invoice
An invoice used as a source document for recording a sale on account
Withdrawals
Assets taken out of a business for the owner's personal use.
bear market
Bad times, prices are falling, and widespread pessimism causes the negative sentiment to be self-sustaining.
renewable term life insurance
Best for short-term life insurance. Policies that start out with low premiums, but increases each time the term is renewed. Policyholders are guaranteed renewal for succeeding terms even if they have a serious illness.
Which one of the following Java typed is structured as true or dalse
Boolean
member bank
any bank that is part of the federal reserve system
Dodd-Frank Reform Act
Called for stricter rules for bank capital, liquidity, risk management Mandated increased transparency Clarified regulatory system
divisible
Characteristic of money that makes it possible for recipients to give money back.
Misleading research reports
Citicorp, Merrill Lynch, others
CDOs
Consolidated default risk of loans onto one class of investor, divided payment into tranches
Quantum meruit
Damages awarded "plaintiff gets as much as he deserves". Morally ought to have.
Demographics
Data that describes a group of people in terms of their age, marital status, family size, ethnicity, gender, profession, education, and income
NASDAQ
Dealer market is a market without centralized order flow NASDAQ: largest organized stock market for OTC trading; information system for individuals, brokers and dealers
DSCR
Debt Service Coverage Ratio Measurement of a property's ability to generate enough revenue to cover the cost of its mortgage payments. It is calculated by dividing the net operating income by the total debt service.
Debt consolidation
Debt is a problem if the interest payments are greater than the debtor can afford. Debt consolidation typically involves borrowing from one lender (typically a bank), at a low rate of interest, sufficient funds to repay a number of higher interest rate debts (such as credit cards). By consolidating debts, the debtor replaces many payments to many different creditors with one monthly payment to one creditor, thereby simplifying their monthly budget. In addition, the lower interest rate means that more of the debtor's monthly payment is applied against the principal of the loan, resulting in faster debt repayment. It may be necessary to have a co-signor or other security, such as a car, if the borrower's credit is not sufficient on their own.
Debt restructuring
Debt restructuring is a process that allows a private or public company - or a sovereign entity - facing cash flow problems and financial distress, to reduce and renegotiate its delinquent debts in order to improve or restore liquidity and rehabilitate so that it can continue its operations. Out-of court restructurings, also known as workouts, are increasingly becoming a global reality. A debt restructuring is usually less expensive and a preferable alternative to bankruptcy. The main costs associated with a business debt restructuring are the time and effort to negotiate with bankers, creditors, vendors and tax authorities. Debt restructurings typically involve a reduction of debt and an extension of payment terms.
Consumers expect a surplus for a product to develop in a market. What is the likely effect on consumers' demand for this product today?
Decrease
Electronic Computer Networks (ECNs)
ECNs allow institutional investors to post quotes and trade directly with each other. (4th Market) Public limit order book Automatic execution Advantages include Lower transactions costs (usually < 1¢ per share) Speed even on large trade sizes Anonymity
Comparing the NYSE and NASDAQ
Effective spreads for Nasdaq and NYSE: This translates to a cost savings of about __________ per stock per year that trades on the NYSE as opposed to Nasdaq
FDIC
Federal Deposit Insurance Corporation. Responsibilities include enforcing regulations ensuring that banks operate in a sound manner.
Commission
Fee paid to broker for making the transaction
Initial franchise fees
Fee the franchise owner pays in return for right to run the franchise
contractual saving institution
Financial intermediary such as a pension fund or an insurance company that receives payments from individuals as a result of a contract and uses the funds to make investments.
Financial Statements
Financial reports that summarize the financial condition and operations of a business.
Financial Industry Regulatory Authority (FINRA)
Formed in 2007 by consolidating regulatory arms of the NASD and the NYSE. Examines securities firms, promulgates trading practice rules and administers a dispute resolution forum for investors and firms.
Fraudulent misrepresentation
Fraudulent misrepresentation occurs when one makes representation with intent to deceive and with the knowledge that it is false. An action for fraudulent misrepresentation allows for a remedy of damages and rescission. One can also sue for fraudulent misrepresentation in a tort action. Fraudulent misrepresentation is capable of being made recklessly.[17]
Expense ratios:
Funds charge annual operating expenses and annual advisory or management fees against the NAV. Expense ratios are calculated as Annual Expenses / Average NAV A "well managed" fund probably should have an expense ratio of less than ___. All costs and charges must be revealed in the fund's prospectus.
demand deposit
Funds held in an account from which deposited funds can be withdrawn at any time without any advance notice to the depository institution. Can be "demanded" by an account holder at any time. Accessible by the account holder through a variety of banking options, including teller, ATM and online banking.
Unit Trust OEIC
Gearing - Defined by the FCA. Up to 10% of the schemes assets against known future income on a temporary basis
GCO
General Cash Offer is an underwritten offering
7
How many years does documentation of most credit problems stay in a consumer's file?
Relative/Real Price
How much of your income that product takes or what else you could've bought with that money
Absolute Price
How much something costs in dollar amount
Time Dimension on orders
IOC: immediate or cancel Day: by default GTC: good until canceled (usually 60 days max)
false
IT/F? nterest rates are usually lower for fixed rate mortgages than for other types.
Identity theft
Identity theft is a form of stealing someone's identity in which someone pretends to be someone else by assuming that person's identity, usually as a method to gain access to resources or obtain credit and other benefits in that person's name.[1][2] The victim of identity theft (here meaning the person whose identity has been assumed by the identity thief) can suffer adverse consequences if they are held responsible for the perpetrator's actions. Identity theft occurs when someone uses another's personally identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes.
Grades and standards
In United States agricultural policy, grades and standards refers to the segregation, or classification, of agricultural commodities into groupings that share common characteristics. Grades provide a common trading language, or common reference, so that buyers and sellers can more easily determine the quality (and therefore value) of those commodities.
Minors and Contracts
In the United States, persons under 18 are typically minor and their contracts are considered voidable; however, if the minor voids the contract, benefits received by the minor must be returned. The minor can enforce breaches of contract by an adult while the adult's enforcement may be more limited under the bargain principle
Competition
In the general sense, a contest among sellers or buyers for control over the use of productive resources. Sometimes used as a shorthand way of referring to perfect competition, a market condition in which no individual buyer or seller has any significant influence over price
comprehensive physical damage
Insurance coverage that covers the cost of damages to your car caused by natural disasters, fire, robbery, theft, vandalism, and more.
property damage liability
Insurance coverage that pays for the damages to the car and possessions (including stationery objects such as trees/mailboxes) of the other party in an accident that is your fault.
Venture capital
Investment to finance new firm
Advantages of open end form is
Liquidity for the investor Fund's ability to grow (advantage for the fund or sponsor)
BB, B, CCC, CC, C
Low credit-quality (non-investment grade), or "junk bonds."
Changes in Housing Finance
Low interest rates and a stable economy created housing market boom, driving investors to find higher-yield investments
Productive Efficiency
Max production
Equity
May be used in either of two unrelated senses. In the context of income distribution theory, refers to an objective, goal or principle implying "fairness." In a financial context may refer to a share or portion of ownership
Mediation
Mediation, as used in law, is a form of alternative dispute resolution (ADR), a way of resolving disputes between two or more parties with concrete effects. Typically, a third party, the mediator, assists the parties to negotiate a settlement. Disputants may mediate disputes in a variety of domains, such as commercial, legal, diplomatic, workplace, community and family matters.
In the long run, economic profits are possible in which market structures?
Monopoly and oligopoly
Investment banks may become commercial banks
Obtain deposit funding Have access to government assistance Major banks now under stricter commercial bank regulations
Which combinations the best way to physically protectemployees and customers at a realtime location such as a bank lending office or credit union
Off duty police officers as security guards surveillance cameras and bullet proof glass
Gramm-Leach-Bliley Act
One provision of this states that financial service companies are required to have and provide to customers a written privacy policy.
T-Bond denomination
Packaged and sold in multiples of $1,000
gift tax
Paid by giver on a gift of money/property.
Advertising
Paid form of communication sent out by a business about a product or service
Discharge
Party may discharge after breach of contract
factoring
Practice of buying debt at a discount. A form of asset-based lending that advances cash to a business in exchange for its receivables.
7th Amendment
Right to a trial by jury in civil cases
2nd Amendment
Right to bear arms
Sale on Approval
Risk of loss remains with Seller until Buyer accepts
Sale or Return
Risk of loss with Buyer wile goods are in his/her possession AND during return to Seller
F.O.B
Risk pass to Buyer when Seller delivers to a specific destination.
Robbery
Robbery is the crime of taking or attempting to take something of value by force or threat of force or by putting the victim in fear. At common law, robbery is defined as taking the property of another, with the intent to permanently deprive the person of that property, by means of force or fear.
C&F
Seller does not insure goods
E-commerce
Selling products or services over the internet; also called electronic commerce
Investment Trust
Share price based on market confidence and supply and demand. No direct link to value of underlying assets
Hedge Funds
Similar to mutual funds, but not registered and not subject to SEC regulations. Available to institutional and high net worth investors Can pursue investment strategies that are not allowed for mutual funds. - Grew from about $50 billion in 1990 to about $2 trillion in 2008.
Normal balances
Since debits increase asset, expense, and dividend accounts, they normally have debit (or left-side) balances. Conversely, because credits increase liability, capital stock, retained earnings, and revenue accounts, they normally have credit (or right-side) balances.
Net wealth of economy
Sum of real assets
Investment Trust
Supervision - Independent Board of Directors
Mens Rea
The "guilty mind" necessary to establish criminal responsibility.
factors in money creation
The Federal Reserve's supply/control of money, banks' use of money, the demand for money.
Aptitude
The ability to learn a particular kind of job
Which one of the following serves as the board to standardize financial planning across the United States
The certified financial planner board of standards
Elasticity of Supply
The change in price causes a large change in supply
Price Inelastic
The change in price doesnt not cause a substantial change in supply or demand
increase net income and capital
The collection of cash from a charge customer would
Consumer Surplus
The difference between the going price and the price the consumer expects to pay
Net Loss
The difference between total revenue and total expenses when total expenses are greater.
w-4
The form that summarizes the information reported on each employee's report of income and taxes is a/an __________.
Donee
The person to whom a gift is made
File maintenance
The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
File Maintenance
The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current.
Entrepreneurship
The process of running a business of one's own
Market demand
The relationship between the total quantity of a good demanded and its price
Gross profit on sales
The revenue remaining after cost of merchandise sold has been deducted
Consistent reporting
The same accounting procedures are followed in the same way in each accounting period
Who typically sets law or regulations regarding insurance companies
The state designed administrative officer such as the commissioner of insurance
market capitalization
The total dollar market value of all of a company's outstanding shares. Calculated by multiplying a company's outstanding shares by the current price of one share.
Cost of merchandise sold
The total original price of all merchandise sold during a fiscal period
too much money
What is a possible cause for rising prices/inflation? _____ moving in the economy.
transit number
a 9-digit number that identifies the bank that holds the checking account and is responsible for payment
checking account
a bank account that allows a bank customer to desposit cash and to write checks against the account balance
deposit slip
a bank form on which the currency and checks to be deposited are listed (deposit ticket)
financial intermediary
a bank is this for the safeguarding, transferring, exchanging, or lending of money.
contract
a binding legal agreement between two or more persons or parties
accounting period
a block of time, such as a month, a quarter, or a year, covered by an accounting report
Computer Law
a body of law arising out of the special conditions relating to the use of computers, as in computer crime or software copyright
cybermediary
a business that acts as a broker or agent to facilitate transactions over the Internet
discontinuance
a business that disappears form the tax __ because it may be operating under a new name or because the owner has purposely discontinued in order to start a new business up
business failure
a business that has stopped operating, with a loss to creditors, and one that no longer appears on the tax rolls
corporation
a business that is registered by a state and operates apart from its owners. It issues shares of stock and lives on after the owners have sold their interest or passed away. Corporations can purchase goods or services, sue and be sued, and conduct all types of business transactions.
clicks and mortar
a business that operates both a traditional physical storefront and an online store
debit card
a card issued by a financial institution that can be used as an alternative to cash; purchase amounts on a debit card are withdrawn directly from the purchaser's checking or savings account
Cashiers Check
a check drawn by a bank on its own funds and signed by an officer of the bank
returned check
a check written on an account that doesnt have adequate funds
journal
a chronological record of business transactions
conflict of interest
a clash between a person's private interests and his or her responsibilities in a position of trust
business concept
a clear and concise description of a business opportunity. It contains four elements: the product or service, the customer, the benefit, and the distribution
e-cash
a legal form of electronic money transfer used in e-commerce and transacted via the Internet, such as Paypal
revolving credit
a line of credit that has a maximum limit
"best prospect" list
a list complied by the government of products that other countries are looking to purchase
trial balance
a listing of the ledger accounts and their debit or credit balances to determine that debits equal credits in the recording process.
unsecured loan
a loan backed only by the reputation and creditworthiness of the borrower
capital expenditure
a long-term commitment of a large sum of money to buy new equipment or to replace old equipment
electronic credit authorizee
a machine that verifies whether a credit card is good, that is, not stolen or invalid
Common-Law Marriage
a marriage without an official ceremony made legally binding by mutual agreement and legally established conditions
e-meeting
a meeting that takes place online or via a telephone conference call
digital signature
a method of authenticating digital information
mortgage
a note, usually a long-term, secured by real property.
debit
a recording on the left side (T chart)
credit
a recording on the right side (T chart)
lien
a right to keep possession of property belonging to another person until a debt owed by that person is discharged. In law, a lien (UK /ˈliːən/ or US /ˈliːn/) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lienee[1]and the person who has the benefit of the lien is referred to as the lienor[2] or lien holder.
accounting cycle
a series of steps performed during the accounting period (some throughout the period and some at the end) to analyze, record, classify, summarize, and report useful financial information for the purpose of preparing financial statements
closed ended loan
a set amount, to be paid back in equal regular payments
economy of scale
a situate where the cost of producing one unit of a good or service decreases as the volume of production increases; the decrease of production costs relative to the price of goods and services
contextual(?) skill
a skill that enables a manager to understand concepts, ideas, and principles
competitive grid
a tool for organizing important information about a business's competition
Permanent Accounts
accounts used to accumulate information from one fiscal period to the next.
Fair Credit Reporting Act
aims to protect the information that credit bureaus, medical information companies, and tenant screening services may collect.
prepaid expense
asset awaiting assignment to expense, such as prepaid insurance, prepaid rent, and supplies on hand. Note that the nature of these three adjustments is the same.
unit trust
assets are held by trustees are invested byfund managers;
retailer
business that sells to the final user
Current asset
cash and other assets that a business can convert to cash or uses up in a relatively short period—one year or one operating cycle, whichever is longer
liability
cash obligation
vault cash
cash on hand
Accumulated depreciation
contra asset account to depreciable assets such as buildings, machinery, and equipment
expenses
cost incurred to produce revenue
Spread
cost of trading with dealer Bid: price dealer will buy from you Ask: Price dealer will sell to you Spread: ask - bid
time deposits
deposits that are held for or mature at a specified time
A person's adjusted gross income less any allowable tax deductions and ___________________ is called taxable income
exemptions
retained earrings
generally consists of accumulated net income of corporation - dividends distributed to the stockholder
Land
ground the company uses for business operations; this includes ground on which the company locates its business buildings and that is used for outside storage space or parking
Tort
in law, a civil misdeed requiring compensation
3rd Market
is trading of listed securities away from the exchange. It is largely an institutional market: to facilitate trades of larger blocks of securities
bank statement
itemized record of all the transactions occuring in a depositor's account over a given period, usually a month
government prohibits it
land not depreciated
Cyber Law
law that is intended to govern the use of computers in e-commerce and the Internet
escrow
minimum amount payed in advance
Fiat money
money that is deemed legal tender by the government, and it is not based on or convertible into a commodity
Unit Trust
must be authorised by the FCA. Trustee and fund manager must be authorised by the FCA Marketing regulated by the FCA
Privity
n. Knowledge shared with another or others regarding a private matter.
profit
net income
multiplier effect
new deposits go out to customers as loans and create more deposits, thus expanding the amount of money in the system
mortgage origination
new mortgages
individual account
owned by one person
depositor
person or business that has cash on deposit in a bank
drawer
person who is writing the check
business entity
personal accounts of owner are separate from business
Vertical analysis
shows the percentage that each item in a financial statement is of some significant total such as total assets or sales
Promoter
someone who is an active supporter and advocate
Statement of cash flows
statement of inflows & outflows of a company over a period of time
adjusted balance method
subtract payments made during the billing cycle
Capital stock
the amount of the owner's investment in the corporation
business cycle
the general pattern of expansion and contraction that the economy goes through
merchandise
the goods bought for resale to customers
domain name
the name that identifies the numeric IP address
country code top-level domain (ccTLD)
the part of the TLD that indicates the country of the Internet address, such as .us for the United states and .fr for France
channel of distribution
the path a product takes from producer or manufacturer to final user or consumer
Cross-indexing
the placing of (1) the account number of the ledger account in the general journal and (2) the general journal page number in the ledger account
on each journal page
the year and month are written
larceny
theft of personal property.
embezzlement
theft or misappropriation of funds placed in one's trust or belonging to one's employer.
Retail Banks
this and other thrift institutions such as mutual savings banks, savings and loans, and credit unions, developed to help individuals not served by commercial banks
if sending check through email
use blank endorsement
point
value equal to 1% of the loan
loan-to-value
value of loan compared to value of the asset
B2B e-commerce
ventures that sell products and services to other businesses
footing
column total written in small pencil figures
cash cards
commonly used at an ATM
PITI
principal, interest, taxes and insurance
estimate of useful life is based on
prior experience
Accounting system
A planned process for providing financial information that will be useful to management.
Balance of trade
A record of a country's exports and imports of goods and services
Discount
A reduction in the retail or wholesale price of a product or service
Accounts receivable ledger
A subsidiary ledger containing only account for charge customers
bear market
Condition of the stock market characterized by substantial and prolonged overall decline in major market averages.
Value weighted:
Considers not only price but also # shares o/s ($ invested in each stock are proportional to market value of each stock)
installment loan
Consumer or business loan in which the principal and interest are repaid in equal installments at fixed intervals. Ex: automobile loans, home equity loans, education loans.
Which of the following agencies does not protect or aid consumers against unsafe products?
Federal insurance commission
In competitive market structures, economic profits are always greater than zero in the long run.
False
Most air pollution is in lower developed countries which do not have pollution control laws.
False
investment banking
Financial activities that involve underwriting new security issues and providing advice on mergers and acquisitions.
investment institution
Financial firm, such as a mutual fund or a hedge fund, that raises funds to invest in loans and securities.
hedge fund
Financial firms organized as a partnership of wealthy investors that make relatively high-risk, speculative investments.
Business entity
Financial information is recorded and reported separately from the owner's personal financial information
pension fund
Financial intermediary that invests contributions of workers and firms in stocks, bonds, and mortgages to provide for pension benefit payments during workers' retirements.
mutual fund
Financial intermediary that raises funds by selling shares to individual savers and invests the funds in a portfolio of stocks, bonds, mortgages, and money market securities.
Equities
Financial rights to the assets of a business
Equities
Financial rights to the assets of a business.
Going concern
Financial statements are prepared with the expectation that a business will remain in operation indefinitely
Accounting period
Fiscal period
Rule of 78
For a 12 month loan, 12/78s of the finance charge is assessed as the first month's portion of the finance charge, 11/78s of the finance charge is assessed as the second month's portion of the finance charge and so on until the 12th month at which time 1/78s of the finance charge is assessed as that month's portion of the finance charge.
Euronext
Formed from merger of Paris, Brussels, Lisbon and Amsterdam exchanges Acquired the Liffe in London Merged with NYSE in 2007
deposit rate schedules
Governing document listing interest rates in effect at the time for various types of accounts.
non-depository intermediaries
Government or private organization that serves as an intermediary between savers and borrowers, but does not accept deposits.
Fees, loads and performance
Gross performance of load funds is statistically identical to gross performance of no load funds Funds with high expenses tend to be poorer performers. 12 b-1 charges should be added to expense ratios Costs found in the fund prospectus and may be compared via Morningstar
Honesty
Honesty refers to a facet of moral character and connotes positive and virtuous attributes such as integrity, truthfulness, and straightforwardness, including straightforwardness of conduct, along with the absence of lying, cheating, theft, etc. Furthermore, honesty means being trustworthy, loyal, fair, and sincere.
Floor Trader
Independent trader who buys and sells securities for his/her own account. Often called speculator or arbitrageur.
Adjusting Entries
Journal entries recorded to update general ledger accounts at the end of a fiscal period.
Closing entries
Journal entries used to prepare temporary accounts for a new fiscal period
Closing Entries
Journal entries used to prepare temporary accounts for a new fiscal period.
Depreciation
Just as prepaid insurance and prepaid rent indicate a gradual using up of a previously recorded asset, so does depreciation.
Which of the following is a retirement plan designed for self employed people
Kepgh Plan
income statement approach
LIFO
Unions
Labor coming together to make sure they interests and rights are heard and respected.
Real property
Land and anything attached to the land.
Socialism
Large Government involvement in the economy
Which of the following approaches to pollution control have had the most dramatic results in decreasing pollution?
Markets for pollution rights and regulation
Marriage
Marriage (also called matrimony or wedlock) is a socially or ritually recognized union or legal contract between spouses that establishes rights and obligations between them, between them and their children, and between them and their in-laws.[1] The definition of marriage varies according to different cultures, but it is principally an institution in which interpersonal relationships, usually sexual, are acknowledged. In some cultures, marriage is recommended or considered to be compulsory before pursuing any sexual activity. When defined broadly, marriage is considered a cultural universal.
insurance company
NON DEPOSITORY intermediary that specializes in writing contracts to protect policy-holders from the risk of financial loss associated with particular events.
US Security Markets Overview
Nasdaq Small stock OTC Pink sheets Organized Exchanges New York Stock Exchange American Stock Exchange Regionals Electronic Communication Networks (ECNs) National Market System
gain on plant assets
Revenue that results when a plant asset is sold for more than book value.
false
T/F? The Small Business Admin. is barred by law from assisting businesses that engage in international trade.
false
T/F? The Truth in Lending Act prohibits bill collectors from using deceptive or abusive tactics.
false
T/F? The agreed-upon value of money in the US today is based on the govn't supply of gold at Fort Knox, Kentucky.
false
T/F? The amount a borrower pays to use the principal of a loan is called a fee.
true
T/F? The fastest-growing segment of banking security issues involves safeguarding the technology that makes doing business possible.
false
T/F? The first Bank of the US was a govn't institution.
false
T/F? The govn't lends billions of dollars each year to American businesses through the Small Business Admin.
true
T/F? The most common type of trade financing involves a letter of credit.
false
T/F? The number of banks that are helping companies conduct business overseas is declining.
deed
Tangible evidence of ownership in real property.
Administration and Record keeping
Tax purposes Low cost reinvestment Low cost additional investment, DCA Low cost switching between fund families Some funds may allow check writing privileges
Price
What must be paid to acquire the right to possess and use a good or service
25%
What percentage of US commercial bank assets is held by foreign banking organizations?
high DSCR
What would indicate that a company has a good bit of operating income available for debt service?
Truth in advertising
When consumers see or hear an advertisement, whether it's on the Internet, radio or television, or anywhere else, federal law says that ad must be truthful, not misleading, and, when appropriate, backed by scientific evidence. The Federal Trade Commission enforces these truth-in-advertising laws, and it applies the same standards no matter where an ad appears - in newspapers and magazines, online, in the mail, or on billboards or buses. The FTC looks especially closely at advertising claims that can affect consumers' health or their pocketbooks - claims about food, over-the-counter drugs, dietary supplements, alcohol, and tobacco and on conduct related to high-tech products and the Internet, such as the dissemination of spyware. The FTC also monitors and writes reports about ad industry practices regarding marketing of food, violent movies, music, and electronic games to children.
3-for-2 stock split
When each stockholder receives an additional share for every two shares held, but the value of each share is reduced by 2/3: three shares now equal the original value of two shares before the split.
tax credits
Taxes owed are reduced dollar-for-dollar on a personal/corporate income tax return by _____.
reserve requirement
When the Federal Reserve increases this, banks must retain more of each dollar deposited, reducing the amount they can lend. This does not change very often.
Distribution of Property after Divorce
When the court grants a divorce, property will be divided equitably (not always equally) between the two spouses. This is decided under the Equitable Distribution Law. During the divorce both spouses have to tell the court about their income and any debts they owe. Equitable distribution means fairly divided. When marital property is distributed equitably, it is divided between the two spouses as fairly as the court thinks is possible. Although this does not guarantee that the court will decide the property should be divided equally (50-50), this is usually what happens. Separate property is property that one of the spouses owned before the marriage. For example, a bicycle that the wife had owned since before her marriage would be considered separate property. Any inheritance one spouse gets, even during marriage, is separate property. So are personal gifts (unless they came from the other spouse) and payments for personal injuries.
With the increase of electronic financial records eBay is the language that has been created to establish consistency among records
XBRL
passbook savings account
You are least likely to find this type of account at a modern bank.
Ledger
a group of accounts
code of ethics
a group of behavior guidelines that govern the day-to day activities of a profession or organization
customer needs analysis
a study that pinpoints the features and benefits of goods or services that customers value
online banking
allows customers to perform banking transactions from their home computers
federal funds rate
amount of interest charged for short-term, interbank loans
net pay
amount of money left after all deductions are subtracted from gross earnings
wage
amount of money paid to an employee at a specificed rate per hour worked
supplies in the debit column of the trial balance column of the worksheet
amount of supplies available during the period
pay period
amount of time for which an employee is paid
piece rate
amount paid for each piece produced in a factory or manufacturing plant
commission
amount paid to an employee based on a percentage of the employee's salary
transaction account
an account that allows transactions to occur without restrictions on the frequency or the volume of transactions
cash basis
an accounting system in which income is recorded when it is received, and expenses are recorded when they are paid
development activity
an action, such as an industry conference, that prepares managers to lead the company into the future
debit
an addition to the left side of an account that increases the balance of all assets and expense accounts and decreases the balance of all liability and revenue accounts
credit bureau
an agency that collects information for a fee on how promptly people and businesses pay their bills
medium of exchange
an agreed-upon system for measuring the value of goods and services.
exemption
an allowance claimed by a taxperson that reduces the amount of taxes that must be paid
___ carrier
a firm that ___ transportation services at uniform rates to the general public
banner swapping
a form of exchanging online advertising in which sites post banner ads for each other
deposit currency
a form of this is checks
employee complaint procedure
a formal procedure for handling employee complaints, usually in writing and distributed to employees
budget
a formal, written statement of expected revenue and expenses for a future period of time
Payroll
The total amount earned by all employees for a pay period
Net pay
The total earnings paid to an employee after payroll taxes and other deductions
A Unit Investment Trust
commonly referred to as a "UIT," is one of three basic types of investment company. The other two types are mutual funds and closed-end funds.
predatory lending
occurs when lenders create problems for consumers by making credit too easily available without regard to the borrowers ability to pay
identity theft
occurs when someone achieves financial gain by using another person's personal information to unlawfully assume the identity of the other person.
A UIT typically will make a one-time public offering
of only a specific, fixed number of units [like closed-end funds]. Many UIT sponsors, however, will maintain a secondary market that allows owners of UIT units to sell them back to the sponsors and allows other investors to buy UIT units from the sponsors.
Money Market deposit accounts
offer a higher rate of interest than savings accounts, but they usually require a higher initial deposit to open an account
secured loan
one in which some item of value backs the loan incase the borrower defaults on the loan
Vicarious Liability
one party may be responsible for negligent activities of another party; e.g. bar owners liable for actions of customers to whom they have served too much alcohol
other revenue or expense
petty cash is a
interest
price paid for the use of money
data mining tools
software programs that statistically analyze data to identify patterns, trends, and relationships within data; used in e-commerce to understand consumer behavior
business broker
someone whose job it is to bring buyers and sellers of business together for a fee
benefit
something that promotes or enhances the value of a product or service to a customer
invoice
source doc for buying on account
receipt
source document for recording cash received from signing a note payable
sales journal
special journal used to record only the sale of merchandise on account
Restitution
the act of restoring someone or something to the rightful owner or to a former state or position; making good on a loss or damage
e-commerce
the act of selling products and services over the Internet
Bait and switch
the action (generally illegal) of advertising goods that are an apparent bargain, with the intention of substituting inferior or more expensive goods.
Forgery
the action of forging or producing a copy of a document, signature, banknote, or work of art.
elastic demand
situation in which a change in price creates a change in demand
accounts receivable
the amount customers owe a business
Depreciation expense
the amount of asset cost assigned as an expense to a particular period
general ledger account
the amount of capital stock at the beginning of the year
cash flow
the amount of cash available to a business at any given time
Labor force
the amount of people in that currently have the ability to work
deduction
the amount that is subtracted from gross earnings
credit risk
the banks estimate of the probability that the borrower can and will repay a loan with interest as scheduled
buy-down mortgage
the borrower buys down, or prepays, part of the interest in order to get a lower rate.
capital
the buildings, equipment, tools, and other goods needed to produce a product or the money used to buy these items or the net worth of a business
accessible
the capability of a web site that allows all types of people to access and use the site's content
current ratio
the comparison of current assets (cash or other items that can be quickly converted to cash quickly) and current liabilities (debts due within a year), used to indicate the ability of a business to pay its bills
spread
the difference between what a bank pays in interest and what it receives in interest. Also known as net interest income
diminishing marginal utility
the effect or law that establishes that price alone does not determine demand, and other factors, such as income, taste, and the amount of product already owned, play a role as well
direct deposit
the employee's net pay is deposited in her or his personal bank account
form 941
the employer's quarterly federal tax return
sale on account
the sale of goods that will be paid for later
content
the text and graphic information contained in a Web site
operating cycle
the time it takes to start with cash, buy necessary items to produce revenues, sell services or goods, and receive cash by collecting the resulting receivables
Battery
the unlawful beating of a person; act of beating or pounding; any large group of related things
automation
the use of machines to do the work of people
external controls
those controls provided outside the business (ex. verifying the accuracy of a signature)
brainstorm
to think freely in order to generate ideas
gross earnings
total amount of money earned by an employee in a pay period
employee social security
total earnings accumulated earnings social security tax rate and social security tax base
fica tax income tax
total employee deductions
Closing the expense accounts
transferring the balances in the expense accounts to a clearing account called Income Summary.
consistency
use same methods period to period
Asset Transformation
using deposits to generate revenue by putting deposits to work via loans
consistency
using the same accounting procedure between periods
long-term investment
usually consists of securities of another company held with the intention of (1) obtaining control of another company, (2) securing a permanent source of income for the investor, or (3) establishing friendly business relations
investment advisor
usually creates the fund and selects the investments. Most funds are of this type.
Governments
(can be both borrowers and savers)
Financial Intermediaries
(connectors of borrowers and lenders)
Households
(net savers)
Fixed Income Markets Government Issues
-Agency Issues (Fed Gov) -Municipal Bonds
Credit Default Swaps
-Insurance contract against the default of borrowers -Issuers ramped up risk to unsupportable levels -AIG sold $400 billion in CDS contracts
Passive management (efficient markets)
-No attempt to find undervalued securities -No attempt to time -Holding a diversified portfolio Indexing; constructing "efficient" portfolio
Federal Funds
BEY*
Limited Liability
Can only lose your initial investment
September 17:
Government lends $85 billion to AIG -Money market panic freezes short-term financing market
Preferred
Have a fixed dividend stream that generally must be paid before common stock dividends
Nature of Investment
Reduce current consumption for greater future consumption
Money Market Instruments
Treasury bills Certificates of deposit Commercial Paper Bankers Acceptances Eurodollars Federal Funds Repurchase Agreements (RPs) and Reverse RPs
RP
is a collateralized loan, many are overnight, although "Term" RPs may have a one month maturity.
Bond/Note Interest
semiannual payment with principal repaid at maturity
Mortgage-Backed Securities (pass-through)
A security backed by a pool of mortgages. The pool backer 'passes through' monthly mortgage payments made by homeowners and covers payments from any homeowners that default.
Mortgage backed Securities collateral:
traditionally all mortgages were conforming mortgages but since 2006, Alt-A and subprime mortgages were included in pools
Certificates of Deposit
- Issued by Depository Institutions - Denomination: 100,000 or more are marketable - Maturity: varies typically 14 day minimum -Liquidity: 3 months or less are liquid if marketable -Default Risk: First 100k 250k is insured -Interest Type: Add on - Taxation: Interest Income is fully taxable
September 7, 2008
-Fannie Mae and Freddie Mac put into conservatorship -Lehman Brothers and Merrill Lynch verged on bankruptcy
LIBOR
-Rate at which large banks in London (and elsewhere) lend to each other. -Base rate for many loans and derivatives.
MMMF and the Credit Crisis of 2008
-Between 2005 and 2008 money market mutual funds (MMMFs) grew by 88%. -MMMFs had their own crisis in 2008 when Lehman Brothers filed for bankruptcy on September 15. -Some funds had invested heavily in Lehman's commercial paper. -On Sept. 16, Reserve Primary fund "broke the buck." -A run on money market funds ensued. The U.S. Treasury temporarily offered to insure all money funds to stop the run - (up to $3.4 trillion in these funds.)
Bond Equivalent Yield
-Can't compare T-bill directly to bond 360 vs 365 days Return is figured on par vs. price paid -Adjust the bank discount rate to make it comparable
Investment Bankers
-Commercial and investment banks' functions and organizations separated by law 1933-1999 -Post-1999: Large investment banks independent from commercial banks Large commercial banks increased investment-banking activities, pressuring investment banks' profit margins
Federal Funds
-Depository institutions must maintain deposits with the Federal Reserve Bank. -Federal funds represents trading in reserves held on deposit at the Federal Reserve. -Key interest rate for the economy
Active management (inefficient markets)
-Finding undervalued securities (security selection) -Market timing (asset allocation)
Risk of agency issues
-Implied Backing by the government - In sept 2008, Federal Gov took over FNMA and FHLMC
Commercial Paper
-Issued By: Large creditworthy corporations and financial institutions -Maturity: Maximum 270 days, usually 1 to 2 months -Denomination: Min 100k -Liquidity: 3 months or less are liquid if marketable -Default Risk: Unsecured, Rated, Mostly high quality -Interest Type: Discount -Taxation: Interest Income is fully taxable
Reverse Repo
-Lending money and obtaining security title as collateral. -"Haircuts" may be required depending on collateral quality
Financial Assets
Claims on real assets or claims on real-asset income
Financial Intermediaries
Commercial banks Investment companies Insurance companies Pension funds Hedge funds
communication
the process of exchanging information
directing
the process of guiding and supervising employments often one-on-one, while they work
diversification
the process of investing in products or businesses with which an existing business is not currently involved
Posting
the process of recording in the ledger accounts the information contained in the journal.
Double Jeopardy
the prosecution of a defendant for a criminal offense for which he has already been tried
demand
the quantity of goods or services that consumers are willing and able to buy at various prices
Focus group
An interview with groups of target customers who provide valuable ideas on products or services
false
T/F? HOEPA prohibits lenders from charging an APR that is 10 points higher than a rate on a Treasury Bill.
false
T/F? High consumer debt is good for banks, b/c banks make most of their money from the interest paid on loans.
true
T/F? If there is a billing dispute, creditors may not take adverse action until the dispute is resolved.
false
T/F? In the US, the govn't plays the greatest role in determining how money is moving.
Stock An Bond Index Uses
Track average returns Comparing performance of managers Base of derivatives
Applicable credit amount (unified credit)
A credit against the federal unified transfer tax on gifts (prior to death) and estates (after death)
Loss
A decrease in equity resulting from activity other than selling goods or services.
true
T/F? In the absence of a national banking system, state banks grew in number/influence in the early years of the US.
false
T/F? Lenders for residential mortgages tend to be more conservative than for residential ones.
true
T/F? Most large money transactions involve ledger entries rather than the movement of physical currency.
true
T/F? Unlike consumer lending, most commercial lending is regulated only by the terms of the loan agreement and some state laws.
false
T/F? You cannot get your money from a certificate of deposit before the maturity date.
false
T/F? You must pay off your credit card account in full at the end of every month.
bank service charge
fee charged by the bank for mainting bank records and for processing bank statement items for the depositor
Closing the revenue accounts
transferring the balances in the revenue accounts to a clearing account called Income Summary.
full endorsement
transfers the check to another party
Proprietorship
A business owned by one person
Enterprise zones
Areas that suffer from lack of employment oppurtunities
Unit Trust
Legal structure - Trust
Proportional tax
Tax rate stays the same no matter what income level
Wages
The general term applied to the earnings of the factor of production, labour
Unit Trust OEIC
Via product provider
Real/Relative Income
Your income based on its purchasing power
Investment Banking Arrangements (Underwritten)
Banker makes a firm commitment on proceeds to the issuing frim
Industrial parks
Sections of land that can be used for industrial business locations
Historical cost
The actual amount paid for merchandise or other items bought is recorded
Case Law
(civil law) a law established by following earlier judicial decisions
Surplus Value
(in Marxian economics) the part of the value of a commodity that exceeds the cost of labor, regarded as the profit of the capitalist.
Compensatory Damages
(law) compensation for losses that can readily be proven to have occurred and for which the injured party has the right to be compensated
Merchandise inventory
The amount of goods on hand for sale to customers
Owner's equity
The amount remaining after the value of all liabilities is subtracted from the value of all assets
Owner's Equity
The amount remaining after the value of all liabilities is subtracted from the value of all assets.
payor
The person who makes payment to another; the person who pays. AKA drawer.
Specialist
-Exchange appointed firm in charge of running the market for a given stock(s). -Acts as both a broker and a dealer charged with matching buy and sell orders from customers and/or filling customer's orders by adding to or selling their own inventory of stock.
Secondary Market Security Sales
-Existing owner sells to another party -Issuing firm doesn't receive proceeds and is not directly involved
Listed Call option (derivative Markets)
-Holder the right to buy 100 shares of the underlying stock at a predetermined price on or before some specified expiration date.
Futures Contracts
-In a futures contract the purchaser of the contract (the long) agrees to purchase the specified quantity of the underlying commodity at contract expiration at the price (futures price) set in the contract. -The contract seller (the short) agrees to deliver the underlying commodity at contract expiration in exchange for receiving the agreed upon price.
IPO Process
-Issuer and banker put on the "Road Show" -Purpose: Book building and pricing
Primary Market Security Sales
-New issue is created and sold -Key factor: issuer receives the proceeds from the sale -Public offerings: registered with the SEC and sale is made to the investing public -Private offerings: not registered, and sold to only a limited number of investors, with restrictions on resale
Tokyo Stock Exchange (TSE)
-No trading floor, all electronic trading -Three sections for different size firms -Two major indexes: Nikkei 225 and TOPIX
assumption of risk
Consent to treatment based on a full understanding of all possible risks of unpreventable results of that treatment is called
Civil law
A law that governs relationships between individuals and defines their legal rights.
Subsidiary ledger
A ledger that is summarized in a single general ledger account
Chart of Accounts
A list of accounts used by a business
Accounts payable ledger
A subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account
Capitalism
A system of economic organization characterized by the private ownership of the means of production, private property, and largely market-based control over the production and distribution of goods and services
Business plan
A written document that describes all the steps necessary in opening and operating a successful business
ADA
Americans with Disabilities Act of 1990
Bankruptcy
Bankruptcy is a legal status of a person or other entity that cannot repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. Bankruptcy is not the only legal status that an insolvent person or other entity may have, and the term bankruptcy is therefore not a synonym for insolvency. In some countries, including the United Kingdom, bankruptcy is limited to individuals, and other forms of insolvency proceedings (such as liquidation and administration) are applied to companies. In the United States, bankruptcy is applied more broadly to formal insolvency proceedings.
Market-Value
Based on the market cap of the firm
Investment Trust
Can gear up to 100% of scheme assets to finance investments
Children's Rights
Children's rights are the human rights of children with particular attention to the rights of special protection and care afforded to minors,[1] including their right to association with both parents, human identity as well as the basic needs for food, universal state-paid education, health care and criminal laws appropriate for the age and development of the child, equal protection of the child's civil rights, and freedom from discrimination on the basis of the child's race, gender, sexual orientation, gender identity, national origin, religion, disability, color, ethnicity, or other characteristics. Interpretations of children's rights range from allowing children the capacity for autonomous action to the enforcement of children being physically, mentally and emotionally free from abuse, though what constitutes "abuse" is a matter of debate. Other definitions include the rights to care and nurturing
Cost of goods sold
Cost of merchandise sold
Buying on Margin
Defined: borrowing money to purchase stock. Initial Margin Requirement IMR (minimum set by Federal Reserve under Regulation T), currently 50% for stocks The IMR is the minimum % initial investor equity.
Inelastic
Demand does not change much if prices go up or down.
trust department
Department of a bank whose purpose is to handle the administration of trust funds, provide estate planning support, and in some cases see to the disposition of the estate of a deceased customer.
Bonus
Financial reward in addition to regular wage or salary
bull market
Good times, prices are rising or are expected to rise. Characterized by optimism, investor confidence and expectations that strong results will continue.
Investment Trust
Income tax on dividend income. Capital gains tax on disposals.
IRA
Individual Retirement Account. A tax-deferred retirement account for an individual that permits individuals to set aside money each year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later (or earlier, with a 10% penalty). Can be established at a bank, mutual fund, or brokerage.
Adjusting entries
Journal entries recorded to update general ledger accounts at the end of a fiscal period
checking account
Most common form of a transaction account.
auction market
One of 2 main types of US stock markets. A market in which buyers enter competitive bids and sellers enter competitive offers at the same time. A stock's price = highest price that a buyer is willing to pay and lowest price that a seller is willing to sell at. (EX: NYSE)
dealer market
One of 2 main types of US stock markets. A market where dealers are assigned for specific securities. The dealers create liquid markets by purchasing and selling against personal inventory.
cash flow statement
One of the quarterly financial reports any publicly traded company is required to disclose to the SEC and the public. Provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter.
Assignor
One who assigns or transfers property.
Obligor
One who owes a duty under a contract
underwriter
One who purchases new issues of securities and resells them to investors for a profit. Usually investment banks that guarantee/select the risks an insurance company agrees to accept.
Mutual Funds may be
Open end shares are bought from the fund and redeemed by the fund or Closed end shares are bought and sold among investors in the marketplace (NASDAQ or an exchange) and the fund itself is not involved.
Open end pricing v closed
Open-end: Fund share price = Net Asset Value (NAV) Closed-end: Fund share price may trade at a premium or discount to NAV
depositions
Oral questions asked of parties and witnesses under oath.
Drawer
Orders the money to be paid
Charge sale
Sale on account
Constant dollars
Sometimes called "real dollars," to refer to price data which have been adjusted to remove the effect of changes in the general level of prices
OEIC
Supervision - Depositary
Adjudicate
To hear and decide judicially; to judge
Delegate
To let other people share workloads and responsibilities
Incorporate
To set a business up as a corporation
Gross earnings
Total earnings
genuine consent
You agree to something freely. e.g. you decide to take a job without someone forcing you to take it
Fannie mae
federal national mortgage association
Advertising fees
fees paid to support television, magazine, or other advertising of the franchise as a whole
payroll register
form that summarizes information about an employees' earnings for each pay period
Discretionary order
gives the broker the power to buy and sell for your account at the broker's discretion.
contract employment
hiring outside of your company to have things like payroll and data processing
Revenues
inflow of assets as the product of selling a product
casualty insurance
insurance coverage for loss or liability arising from a sudden, unexpected event such as an accident and for the cost of defending a business in the court against claims of property damage.
balloon mortgage
interest and payment are fixed but at sme specific point the entire remaining balance of the loan is due in one single balloon payment.
realization of revenue
interest earned but not received
reversing accrued interest expense
interest expense gets credited
discount rate
interest rate that the federal reserve sets and charges for loans to member banks
collateral
security in the form of assets that a company promises(?) to a lender
charge customer
the customer to whom a slae on account is made
transferor
the decedent or donor who creates a generation skipping transfer trust
Balance of Trade
the difference between the values of exports and imports of a country, said to be favorable or unfavorable as exports are greater or less than imports.
Iron Law of Wages
the doctrine or theory that wages tend toward a level sufficient only to maintain a subsistence standard of living.
Central banks
the government banks that manage, regulate, and protect both the money supply and the banks themselves.
agency law
the large body of common law that governs agency; a mixture of contract law and tort law
drawer
the person who signs a check
Duress
threats, violence, constraints, or other action brought to bear on someone to do something against their will or better judgment.
Common Stock
-Residual Claim -Limited Liability
Municipal Bonds
From local governments
Governance and ethics failures cost the economy billions, if not trillions
Eroding public support and confidence
Real Assets
Used to produce goods and services: Property, plants and equipment, human capital, etc.
Real versus Financial Assets
All financial assets (owner of the claim) are offset by a financial liability (issuer of the claim) When all balance sheets are aggegated, only real assets remain
Privately issued instruments
come from corporations, or are items like mortgage backed securities, pool a group of mortgages together and sell them to investors.
Source Document
A business paper from which information is obtained for a journal entry
Source document
A business paper from which information is obtained for a journal entry
Wholesale merchandising business
A business that buys and resells merchandise to retail merchandising businesses
Merchandising business
A business that purchases and sells goods
Microsoft and Intel
First two NASDAQ stocks to be included in the Dow Jones Industrial Average in 1999.
true
T/F? Banks may require up to a seven-day notice from a depositor who wants to withdraw money from a time deposit.
true
T/F? Bill collectors may not call debtors at odd hours.
false
T/F? By law, every bank in the US must be part of the Federal Reserve System.
true
T/F? Charitable organizations are not eligible for SBA loan guarantees.
true
T/F? Consumers should endorse all checks in the presence of a bank teller.
true
T/F? Consumers should shred account statements and canceled checks rather than simply throwing them in the trash.
true
T/F? Contract financing is secured by the value of a specific contract.
false
T/F? Credit bureaus may not report info more than 1 year old.
true
T/F? Credit card processing primarily occurs electronically.
true
T/F? Credit unions are nonprofit organizations.
Compliant
(adj.) willing to do what someone else wants; obedient
Arbitration
(law) the hearing and determination of a dispute by an impartial referee agreed to by both parties (often used to settle disputes between labor and management)
Dealer Markets
- 3rd party acts as intermediate buyer/seller
Brokered Markets
-3rd party assistance in location buyer or seller
Treasury bills
-Issued by Federal Government -Denomination $100, commonly $10,000 -Maturity 4, 13, 26, or 52 weeks - Liquidity: Highly liquid - Default Risk: None - Interest Type: Discount Taxation: Federal Taxes owed, exempt from state and local taxes
Bankers Acceptances
-Originates when a purchaser of goods authorizes its bank to pay the seller for the goods at a date in the future (time draft). -When the purchaser's bank 'accepts' the draft it becomes a contingent liability of the bank and becomes a marketable security.
Mortgage-Backed Security issue
-Political encouragement to spur affordable housing led to increase in subprime lending - Private banks began to purchase and sell pools of subprime mortgages - Pool issuers assumed housing prices would continue to rise, but they began to fall as far back as 2006 with disastrous results for the markets.
Aggregate Demand
...
Progressive Tax
...
Consideration
A bargained for exchange of promises which a legal detriment is suffered by the promise.
Reasons for Termination
1) Consistent incompetence. If an employee just isn't able to do a competent job, and you have given the employee a reasonable opportunity to succeed, then termination will often be seen as appropriate. 2) Violation of company policy. If you have established clear, legal, and consistent policies, and the employee obviously has violated them in a meaningful way, then termination is appropriate. Violation of antiharassment, discrimination, or confidentiality policies are particularly actionable. 3) Repeated unexcused absenteeism or tardiness. Your company depends on its employees to show up for work and perform their jobs. Continual absence or tardiness jeopardizes the ability of an employee to complete important tasks. If absenteeism or tardiness is continual and unexcused, then termination may be justified. Be careful to investigate the reason for the absences. If they're the result of a medical condition, you may need to accommodate that condition, or at least attempt to do so. 4) Physical violence. If an employee commits or threatens physical violence, you will want to fire him or her immediately. All employees are entitled to a safe work environment, and employers have a duty to take reasonable steps to provide for that. 5) Drugs and alcohol. Depending on the circumstances, being under the influence at the office may be grounds for immediate suspension or termination. Some companies now offer treatment and rehabilitation counseling as an alternative to immediate firing. Conditions caused by the use of prescribed drugs may also require a more tempered response. 6) Illegal acts. If you find the employee committing illegal acts, such as theft or embezzlement, immediate termination is justified. Before you fire the accused employee, however, make sure you know all the facts and have heard the employee's side of the story. 7) Falsified information. Sometimes employees lie on their employment applications or resumes (they list fake degrees or jobs they've never held). When you discover this, and the falsification appears deliberate and material, termination of the employee is usually warranted. 8) Employment at will
Strict Liability
: Makes manufactures or suppliers responsible for selling goods that are unreasonably dangerous.
__
??? performance
Corporate Officers
A Corporate Officer is a high ranking person in a given corporation that is assigned a title indicating his position within the corporation. While a corporation may have many positions under its purview, only the persons holding the highest ranking positions are considered "corporate officers" (or executives). Most corporations include at least the following Officer or Executive positions: Chief Executive Officer (CEO) President Secretary Treasurer Other common officer positions are: Chief Financial Officer (CFO) Chief Operating Officer (COO) Chief Information Officer (CIO) and (Fractional CIO) Chief Information Security Officer (CISO) Chief Knowledge Officer (CKO) Vice President Director-General Managing Director Executive Director Members of the Board of Directors can also be officers, but this is not mandatory nor necessarily so--the titles can be whatever the shareholders want them to be, though these must generally be outlined in the bylaws of the corporation. Further, many times positions can be combined with one person holding more than one title, and with various positions holding different reporting obligations (for example, in some cases, the President may be asked to report to the CEO, while in other organizations, the CEO may be asked to report to the President). Or they can even have multiple people holding the same title (which is often the case with the Vice President title).
Checking Account
A bank account from which payments can be ordered by a depositor
Proprietorship
A business owned by one person.
bill of exchange
A bill of exchange or "draft" is a written order by the drawer to the drawee to pay money to the payee. A common type of bill of exchange is the cheque (check in American English), defined as a bill of exchange drawn on a banker and payable on demand. Bills of exchange are used primarily in international trade, and are written orders by one person to his bank to pay the bearer a specific sum on a specific date. Prior to the advent of paper currency, bills of exchange were a common means of exchange. They are not used as often today. Bill of exchange, 1933 A bill of exchange is essentially an order made by one person to another to pay money to a third person. A bill of exchange requires in its inception three parties—the drawer, the drawee, and the payee. The person who draws the bill is called the drawer. He gives the order to pay money to the third party. The party upon whom the bill is drawn is called the drawee.
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors. It is often simply referred to as "the board". A board's activities are determined by the powers, duties, and responsibilities delegated to it or conferred on it by an authority outside itself. These matters are typically detailed in the organization's bylaws. The bylaws commonly also specify the number of members of the board, how they are to be chosen, and when they are to meet. However, these bylaws rarely address a board's powers when faced with a corporate turnaround or restructuring, where board members need to act as agents of change in addition to their traditional fiduciary responsibilities
Mercantilism
A body of policy recommendations designed to promote the development of the early nation states of western Europe in the 17th and 18th centuries. The emphasis was on utilizing trade to increase national wealth at the expense of the countries being traded with through fostering a "favourable balance of trade", by which was meant an excess of exports over imports
Transaction
A business activity that changes assets, liabilities or owner's equity
Transaction
A business activity that changes assets, liabilities, or owner's equity.
venture agreement
A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity
Receipt
A business form giving written acknowledgment for cash received
Check
A business form ordering a bank to pay cash from a bank account
Employee earnings record
A business form used to record details affecting payments made to an employee
Payroll register
A business form used to record payroll information
Vendor
A business from which merchandise is purchases or supplies or other assets are bought
Partnership
A business in which two or more persons combine their assets and skills
cashier's check
A check drawn on the bank's own funds, often requested by seller to be assured of payment.
Postdated check
A check with a future date on it
Postdated Check
A check with a future date on it.
share draft
A check written on an account at a credit union.
preferred stock
A class of ownership in a corporation that has a higher claim on the company's assets and earnings than common stock. This type of stock has a dividend that must be paid out before dividends to common stockholders (in the event of a bankruptcy, paying these shareholders takes precedence before common stockholders). However, the shares usually do not have voting rights.
Arbitration Clause
A clause in a contract that provides that, in the event of a dispute, the parties will submit the dispute to arbitration rather than litigate the dispute in court.
prepayment clause
A clause in a mortgage contract that says if the mortgage is prepaid within a certain time period, a penalty will be assessed. The penalty is usually based on percentage of the remaining mortgage balance or a certain number of months worth of interest.
junk bonds
A colloquial term for a high-yield or non-investment grade bond. Junk bonds are fixed-income instruments so called because of their higher risk. However, they have speculative appeal because they offer much higher yields than safer bonds. Companies that issue junk bonds typically have less-than-stellar credit ratings, and investors demand these higher yields as compensation for the risk of investing in them. A junk bond issued from a company that manages to have its credit rating upgraded will generally have a substantial price appreciation.
Work sheet
A columnar accounting firm used to summarize the general ledger information needed to prepare financial statements
Work Sheet
A columnar accounting form used to summarize the general ledger information needed to prepare financial statements
front-end load
A commission or sales charge applied at the time of the initial purchase for an investment, usually mutual funds and insurance policies. It is deducted from the investment amount and, as a result, it lowers the size of the investment.
Brainstorming
A creative group problem-solving technique that invokes generating a large number of fresh ideas
Expense
A decrease in owner's equity
Deed
A deed (anciently an evidence) is any legal instrument in writing which passes, affirms or confirms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed. It is commonly associated with transferring title to property. The deed has a greater presumption of validity and is less rebuttable than an instrument signed by the party to the deed. A deed can be unilateral or bilateral. Deeds include conveyances, commissions, licenses, patents, diplomas, and conditionally powers of attorney if executed as deeds. The deed is the modern descendant of the medieval charter, and delivery is thought to symbolically replace the ancient ceremony of livery of seisin.[1]
Bailment
A delivery of personal property to someone under an express or implied contract whereby the property is accepted and later redelivered after the purpose of the contract is fulfilled.
Disclaimer
A denial of responsibility or knowledge
Customer profile
A description of the characteristics of the person or company that is likely to purchase a product or service
Deflation
A fall in the general level of all prices. The opposite of inflation
Slander
A false statement which harms the reputation of others and gives occasion for false judgments concerning them; same as calumny. (Spoken)
Statute of Limitations
A federal or state statute setting the maximum time period during which a certain action can be brought or certain rights enforced.
Medicare tax
A federal tax paid for hospital insurance
Social security tax
A federal tax paid for old-age, survivors and disability insurance
Federal unemployment tax
A federal tax used for state and federal administrative expenses of the unemployment program
back-end load
A fee that investors pay when selling mutual fund shares within a specified number (usually 5-10) of years. The fee amounts to a percentage of the value of the share being sold.
Contempt
A feeling of disdain for anything considered mean or worthless
derivatives
A financial instrument whose characteristics and value depend upon the characteristics and value of an underlier, typically a commodity, bond, equity or currency. Ex: corn futures contracts, put options, and forward agreements.
Income Statement
A financial statement showing the revenue and expenses for a fiscal period.
Balance sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date
balance sheet
A financial statement that shows the firm's assets and liabilities.
Owner's equity statement
A financial statement that summarizes the changes in owner's equity during a fiscal period
fixture
A fixture, as a legal concept, means any physical property that is permanently attached (fixed) to real property (usually land), the removal of which would [permanent]ly damage the real property.
Invoice
A form describing the goods or services sold, the quantity and the price
Invoice
A form describing the goods or services sold, the quantity, and the price
Journal
A form for recording transactions in chronological order
Negotiation
A form of communication between opposing sides in a conflict in which offers and counteroffers are made and a solution occurs only when both parties agree
Single proprietorship
A form of unincorporated business in which there is only one owner
Petty cash slip
A form showing proof of a petty cash payment
Code
A formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations
Limited Liability
A fundamental feature of corporations, whereby investors are liable only up to the amount of their investment.
Inferior good
A good for which the demand decreases when income increases When a household's income goes up, it will buy a smaller quantity of such a good
Supporting schedule
A report prepared to give details about an item on a principal financial statement
Litigation
A lawsuit or (very rarely) "suit in law"[1] is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint. If the plaintiff is successful, judgment is in the plaintiff's favor, and a variety of court orders may be issued to enforce a right, award damages, or impose a temporary or permanent injunction to prevent an act or compel an act. A declaratory judgment may be issued to prevent future legal disputes.
Lawyer
A lawyer is a person who practices law, as an attorney, counsel or solicitor.[1] Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political and social authority, and deliver justice. Working as a lawyer involves the practical application of abstract legal theories and knowledge to solve specific individualized problems, or to advance the interests of those who retain (i.e., hire) lawyers to perform legal services.
Leasing
A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset.[1] The narrower term rental agreement can be used to describe a lease in which the asset is tangible property.[2] Language used is that the user rents the land or goods let or rented out by the owner. The verb to lease is less precise as it can refer to either of these actions.[3] Examples of a lease for intangible property are use of a computer program (similar to a license, but with different provisions), or use of a radio frequency (such as a contract with a cell-phone provider). The term rental agreement is also sometimes used to describe a periodic lease agreement (most often a month-to-month lease) internationally and in some regions of the United States.[4]
General ledger
A ledger that contains all accounts needs to prepare a financial statements
Corporation
A legal entity formed to conduct business and possessing certain privileges not available to single proprietorships or partnerships, notably limited liability which confines the shareholder's possible losses to the amount paid to purchase shares in the business
Estoppel
A legal theory under which a person is barred from asserting or denying a fact because of the person's previous acts or words.
Contract
A legally enforceable agreement when relating to an insurance policy; for workers' compensation cases, and agreement involving two or more parties in which each is obligated to the other to fulfill promises made
Cover letter
A letter that explains or provides more information about a document or set of documents
Quota
A limitation on the amount of a good that can be produced or offered for sale domestically or internationally
Chart of accounts
A list of accounts used by a business
Schedule of accounts receivable
A listing of customer accounts, account balances and total amount due from all customers
Criminal Intent
A mental state or frame of mind that the person knowingly did the particular criminal act (break the law). May be general, specific or transferred intent.
Retail merchandising business
A merchandising business that sells to those who use or consume the goods
Mediation
A method of settling disputes outside of court by using the services of a neutral third party, who acts as a communicating agent between the parties and assists them in negotiating a settlement.
Eminent Domain
Allows the govt to take property for public use but also requires the govt to provide just compensation for that property
Mistake
A mistake is an incorrect understanding by one or more parties to a contract and may be used as grounds to invalidate the agreement. Common law has identified three different types of mistake in contract: common mistake, mutual mistake, and unilateral mistake. A common mistake occurs when both parties hold the same mistaken belief of the facts. This is demonstrated in the case of Bell v. Lever Brothers Ltd.,[48] which established that common mistake can only void a contract if the mistake of the subject-matter was sufficiently fundamental to render its identity different from what was contracted, making the performance of the contract impossible. A mutual mistake occurs when both parties of a contract are mistaken as to the terms. Each believes they are contracting to something different. The court usually tries to uphold such a mistake if a reasonable interpretation of the terms can be found. However, a contract based on a mutual mistake in judgment does not cause the contract to be voidable by the party that is adversely affected. See Raffles v. Wichelhaus.[49] A unilateral mistake occurs when only one party to a contract is mistaken as to the terms or subject-matter. The courts will uphold such a contract unless it was determined that the non-mistaken party was aware of the mistake and tried to take advantage of the mistake.[50] It is also possible for a contract to be void if there was a mistake in the identity of the contracting party. An example is in Lewis v. Avery[51] where Lord Denning MR held that the contract can only be avoided if the plaintiff can show that, at the time of agreement, the plaintiff believed the other party's identity was of vital importance. A mere mistaken belief as to the credibility of the other party is not sufficient.
mortgage loan
A mortgage loan, also referred to as a mortgage, is used by purchasers of real property to raise money to buy the property to be purchased or by existing property owners to raise funds for any purpose. The loan is "secured" on the borrower's property. This means that a legal mechanism is put in place which allows the lender to take possession and sell the secured property ("foreclosure" or "repossession") to pay off the loan in the event that the borrower defaults on the loan or otherwise fails to abide by its terms. The word mortgage is derived from a "law French" term used by English lawyers in the middle ages meaning "death pledge", and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure.[1]
load fund
A mutual fund that comes with a sales charge or commission.
no load fund
A mutual fund which doesn't impose a sales or redemption charge, selling and redeeming its shares at net asset value.
Paralegal
A paralegal, generally speaking, is a professional who has the required education and experience to perform substantive legal work for which a law firm or supervising attorney is ultimately responsible
Joint Venture
A partnership created by two or more companies for a specific purpose over a set period of time
Distribution of net income statement
A partnership financial statement showing net income or loss distribution to partners
General Partnership
A partnership in which all owners share in operating the business and in assuming liability for the business's debts.
limited partner
A partnership that includes at least one general partner who actively manages the company and accepts unlimited liability and one limited partner who gives up the right to actively manage the company in exchange for limited liability
Payment
A payment is the transfer of an item of value from one party (such as a person or company) to another in exchange for the provision of goods, services or both, or to fulfill a legal obligation.
Charter
A permit issued to operate as a corporation; also known as certificate of incorporation.
Holder in Due Course
A person in possession of a negotiable instrument who accepts the negotiable instrument in good faith and for value.
Employer
A person or business that pays a person or group of people to work.
Customer
A person or business to whom merchandise or services are sold
Payee
A person to whom money is paid
Plaintiff
A person who brings a legal action against another
A person with the following skills is the best candidate for the position of financial software designer
A person who had an accounting background as well as a computer science background
Investment Trust
Companies Act FCA listing rules ICTA 1988 s842 External investment management and ITSS/ISA operator authorised under FSMA 2000
Power of attorney
A power of attorney (POA) or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter, sometimes against the wishes of the other. The person authorizing the other to act is the principal, grantor, or donor (of the power).
callable preferred stock
A preferred stock that allows the issuer to repurchase the issued stock at a predetermined price. The right to repurchase is usually exercised when market rates fall below the preferred stock rate at time of issue. A firm issues this type of stock to protect itself from obligations to pay guaranteed dividends in the future.
Prenup
A prenuptial agreement, antenuptial agreement, or premarital agreement, commonly abbreviated to prenup or prenupt, is a contract entered into prior to marriage, civil union or any other agreement prior to the main agreement by the people intending to marry or contract with each other. The content of a prenuptial agreement can vary widely, but commonly includes provisions for division of property and spousal support in the event of divorce or breakup of marriage. They may also include terms for the forfeiture of assets as a result of divorce on the grounds of adultery; further conditions of guardianship may be included as well.
Trial Balance
A proof of the equality of debits and credits in a general ledger.
property abstract
A property abstract is a collection of legal documents that chronicles activities associated with a particular parcel of land. Generally included are references to deeds, mortgages, wills, probate records, court litigations and tax sales--basically, any essential legal documents that affect the property. The abstract will also show the names of all property owners and how long a particular holder owned it, as well as showing the price the land was exchanged for when it changed owners. Rarely will an abstract mention capital improvements to the property. Property abstracts are considered good starting places for research on historical buildings.[1]
pension plan
A qualified retirement plan set up by a corporation, labor union, government, or other organization for its employees.
Real Estate Broker
A real estate broker or real estate agent is a person who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy. In the United States, the relationship was originally established by reference to the English common law of agency, with the broker having a fiduciary relationship with his clients.
Account
A record summarizing all the information pertaining to a single item in the accounting equation
Ordinance
A regulation enacted by a city or county legislative body that becomes part of that state's statutory law
Bank statement
A report of deposits, withdrawals and bank balances sent to a depositor by a bank
Bank Statement
A report of deposits, withdrawals, and bank balance sent to a depositor by a bank
SEP-IRA
A retirement plan created to benefit self-employed persons and small business owners. Contributions to a SEP IRA are typically 100% tax deductible and earnings grow tax deferred.
Comparative Negligence
A rule in tort law that reduces the plaintiff's recovery in proportion to the plaintiff's degree of fault, rather than barring recovery completely; used in the majority of states.
Law
A rule or body of rules of conduct inherent in human nature and essential to or binding upon human society
Birth certificates title deeds and certificates of deposit should be kept in
A safe deposit boxes
Sale on account
A sale for which cash will be received at a later date
Credit card sale
A sale in which a credit card is used for the total amount of the sale at the time of the transaction
Cash sale
A sale in which cash is received for the total amount of the sale at the time of the transaction
Sale
A sale is the act of selling a product or service in return for money or other compensation.[1] Signalling completion of the prospective stage, it is the beginning of an engagement between customer and vendor or the extension of that engagement.
Implied Warranty of Merchantibility
A seller who is a merchant-dealer warrants that his goods are fit for their ordinary use.
Endorsement
A signature or stamp on the back of a check transferring ownership
higher interest rates
A tight money policy followed by the Federal Reserve would most likely result in:
Generation-Skipping Transfer
A transfer of assets to a person two or more generations below the transferor, e.g. from a grandparent to a grandchild
Post-Closing Trial Balance
A trial balance prepared after the closing entries are posted
Generation- Skipping Transfer Trust
A trust that partially avoids federal gift and estate taxes on transfers of large sums of money or other valuable assets established to transfer these assets to a beneficiary two or more generations below the transferor.
Declining-balance method of depreciation
A type of accelerated depreciation that multiplies the book value of an asset by a constant depreciation rate to determine annual depreciation.
term deposit
A type of account which cannot be accessed for a predetermined period (typically the loan's term).
Graph
A visual representation of a relationship between two variables, usually drawn to some specified scale
Void
A void contract cannot be enforced by law. Void contracts are different from voidable contracts, which are contracts that may be (but not necessarily will be) nullified. However, when a contract is being written and signed, there is no automatic mechanism available in every situation that can be utilized to detect the validity or enforceability of that contract. Practically, a contract can be declared to be void by a court of law.[1] So the main question is that under what conditions a contract can be deemed as void?
Voidable
A voidable contract, unlike a void contract, is a valid contract. At most, one party to the contract is bound. The unbound party may repudiate the contract, at which time the contract is void.
Express Warranty
A written guarantee
Negotiable Instruments
A written promise or order to pay a specific sum of money that may be transferred by endorsement or delivery. The transferee then has the original payee's right to payment.
Draft
A written, signed, and dated order from one party ordering another party, usually a bank, to pay money to a third party.
common size analysis
Comparison of different-sized firms in the same industry when analyzing a firm's financial statements.
Spousal Support (Alimony)
Alimony (also called aliment (Scotland), maintenance (England, Northern Ireland, Wales, Canada), spousal support (U.S., Canada) and spousal maintenance (Australia)) is a legal obligation on a person to provide financial support to his or her spouse before or after marital separation or divorce. The obligation arises from the divorce law or family law of each country. Traditionally, alimony was paid by a husband to his former wife, but since the 1970s there have been moves in many Western countries towards gender equality with a corresponding recognition that a former husband may also be entitled to alimony from his former wife.
Land
All natural resources The "gifts of nature" which are economically useful
Which one of the following is a service provided by a bank to ensure that an account holder does not make a debit that exceeds the amount in his/her account?
Overdraft protections
promissory note
Although possibly non-negotiable, a promissory note may be a negotiable instrument if it is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand to the payee, or at fixed or determinable future time, certain in money, to order or to bearer. (see Sec. 194)[5] The law applicable to the specific instrument will determine whether it is a negotiable instrument or a non-negotiable instrument. Bank note is frequently referred to as a promissory note, a promissory note made by a bank and payable to bearer on demand.
10th Amendment
Amendment that gives the rights not delegated to National government or denied to the States to the States.
8th Amendment
Amendment that prohibits excessive bail amounts and cruel and unusual punishment.
Depository Receipts
American Depository Receipts (ADRs) also called American Depository Shares (ADSs) are certificates traded in the U.S. that represent ownership in a foreign security.
Most bank tellers must have a certificate from which organization before becoming a bank teller
American institute of banking (AB)
T account
An accounting device used to analyze transactions
Living will
An advanced health care directive, also known as living will, personal directive, advance directive, or advance decision, is a legal document in which a person specifies what actions should be taken for their health if they are no longer able to make decisions for themselves because of illness or incapacity. In the U.S. it has a legal status in itself, whereas in some countries it is legally persuasive without being a legal document.
Shareholder
Owner of some fraction of the stock issued by a corporation
Successor
An all inclusive UPC term meaning any person, other than a creditor, who is entitled to real or personal property of a decedent either under the will of through intestate succession.
Petty Cash
An amount of cash kept on hand and used for making small payments
Petty cash
An amount of cash kept on hand and used for making small payments
Debit
An amount recorded to the left side of a t account
Interest
An amount that can be earned on money that is invested or paid on money that is borrow
Monetary Policy
An attempt to achieve broad economic goals by the regulation of the supply of money.
Easement
An easement is a non-possessory right of use and/or enter onto the real property of another without possessing it. It is "best typified in the right of way which one landowner, A, may enjoy over the land of another, B".[1] It is similar to real covenants and equitable servitudes;[2] in the United States, the Restatement (Third) of Property takes steps to merge these concepts as servitudes.[3] Easements are helpful for providing pathways across two or more pieces of property or allowing an individual to fish in a privately owned pond. An easement is considered as a property right in itself at common law and is still treated as a type of property in most jurisdictions.
debit card
An electronic card issued by a bank which allows bank clients access to their account to withdraw cash or pay for goods and services. This form of payment also removes the need for checks as it immediately transfers money from the client's account to the business account. The major benefits to this type of card are convenience and security.
Blank Endorsement
An endorsement consisting only of the endorser's signature.
Special endorsement
An endorsement indicating a new owner of a check
Special Endorsement
An endorsement indicating a new owner of a check.
Restrictive Endorsement
An endorsement restricting further transfer of a check's ownership.
Express warranty
An express warranty is a verbal or written statement that guarantees that a product is of a certain quality or will work in a certain way or for a certain amount of time. Most express warranties say something like, "This product is warranted against defects in materials or workmanship" or "We will repair or replace parts that are defective in materials or workmanship" for a specified time.
Implied Contract
An implied contract is an agreement created by actions of the parties involved, but it is not written or spoken. This is a contract assumed to have been drawn. In this case, there is no written record nor any actual verbal agreement. A form of an implied contract is an implied warranty provided automatically by law. An implied warranty means that when a product is purchased, it is guaranteed to work for its ordinary purpose. For example, a refrigerator is fit to keep food cool.
suitability
An important element in determining proper business practices. Financial professionals recommend financial products based on the client's financial, social, and emotional circumstances.
Gain
An increase in equity resulting from activity other than selling goods or services.
Change in demand
An increase or decrease in the quantity demanded over a range of prices. Shown by a shift of the demand curve
Independent Contractor
An independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when required, during which time he or she may be subject to law of agency. Independent contractors are usually paid on a freelance basis. Contractors often work through a limited company or franchise, which they themselves own, or may work through an umbrella company.
S&P 500
An index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. Designed to be a leading indicator of U.S. equities. Investing success is usually measured by comparing an investor's percentage gain or loss to this.
skip person
An individual (such as a grandchild) who receives the property in a generation-skipping transfer and is two or more generations below the generation of the transferor
discount broker
An individual/firm that carries out buy and sell orders at a reduced commission compared to a full-service broker, but provides no investment advice. Ex: E-Trade, Ameritrade, Charles-Schwab
commercial bank
An institution which accepts deposits, makes business loans, and offers related services. Also allow for a variety of deposit accounts, such as checking, savings, and time deposit. Primarily concerned with receiving deposits and lending to businesses.
letter of credit
An instrument given by a bank on behalf of a buyer to pay back the bank of the seller a given sum in a given time.
renewability
An option sometimes found in term life insurance policies that allows insured to continue purchasing the same policy without having to demonstrate that they are still insurable.
Oral
An oral contract is a contract, the terms of which have been agreed by spoken communication. This is in contrast to a written contract, where the contract is a written document. There may be written, or other physical evidence, of an oral contract - for example where the parties write down what they have agreed - but the contract itself is not a written one.
Uneforcable
An unenforceable contract or transaction is one that is valid, but which the court will not enforce. Unenforceable is usually used in contradistinction to void (or void ab initio) and voidable. If the parties perform the agreement, it will be valid, but the court will not compel them if they do not.
coercion
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
Stop buy order
Becomes a market buy order when the trigger price is encountered. E.G.: You shorted stock trading at $40. You could place a stop buy at _42__. The stop buy would become a market order to buy if the price of the stock hits _42__.
Unit Trust Investment Trust
Bid/offer spread Annual management charge
Markets
Any coming together of buyers and sellers of produced goods and services or the services of productive factors
Full warranty
Any company offering a full warranty must repair or replace the product during the specified warranty period. Federal and some state laws mandate that if a company plans to fix the covered item, they must do within a reasonable amount of time and it must be reasonably convenient for the consumer to get the item to and from the place where it will be repaired. Typically, this is handled through the mail or a private parcel delivery service.
finance charge
Any fee representing the cost of credit, or the cost of borrowing.
Accelerated depreciation
Any method of depreciation which records greater depreciation expense in the early years and less depreciation expense in the later years.
insider trading
Any trade of a company's shares based on material non-public knowledge.
Business ethics
Application of the principles of right and wrong issues that come up in the workplace
Arbitration
Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts. The parties to a dispute refer it to arbitration by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and agree to be bound by the arbitration decision (the "award"). A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts.[1]
Private Domain
Areas of a person's life that are not subject to governmental domain.
small wholesale business
As defined by the Small Business Admin., a _____ is one with 100 or less employees.
Limited warranty
As its name implies, a limited warranty is limited to just the specified parts, certain types of defects, or other conditions. But since it can mean virtually anything the retailer decides, it is important to fully understand the meaning of "limited" when buying such a product. Often, it covers just the parts and not the labor required to fully fix something. A limited warranty also may include the stipulation that the manufacturer and the consumer split the cost of repairs for a given period of time.
liquid assets
Assets that are easily convertible to cash, such as those in savings accounts, stocks, and US savings bonds.
Obligee
Assignor; One to whom an obligation is owed.
Price Weighted Average
Assumes buy 1 share each stock and invest cash and stock dividends proportionately.
Organized Exchanges
Auction markets are markets with centralized order flow Dealership function: can be competitive or assigned by the exchange Examples: NYSE, ASE, Regionals, CBOE, CME
Breach of Contract
Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance.
Burglary
Burglary (also called breaking and entering and sometimes housebreaking) is a crime, the essence of which is illegal entry into a building for the purposes of committing an offence. Usually that offence will be theft, but most jurisdictions specify others which fall within the ambit of burglary.
Direct Search Markets
Buyers and sellers locate one another on their own
Operating expenses
Buying and selling commissions, administrative expenses and advisory fees for the managers
Avoiding the load:
Can sometimes choose different class of fund shares.
CAMELS system
Capital adequacy, Asset adequacy, Management, Earnings, Liquidity, and Sensitivity
Negligence
Careless neglect, often resulting in injury
negligence
Careless neglect, often resulting in injury
Which one of the following is not a section on the cash flows statements
Cash flows from bank activities
M1
Category of the money supply to which transaction accounts belong.
Income Effect
Change in quantity demanded of one item based on increase or decrease of purchasing power
Substitution Effect
Change in quantity demanded of one item based on relative price change to its substitute
Adjustments
Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period
Adjustments
Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.
negotiability
Characteristic of a document that allows it to be legally/freely assignable, saleable, or transferable. Elements include a signature, it must be written, and must state the amount to be paid.
9th Amendment
Citizens entitled to rights not listed in the Constitution
Conciliation
Conciliation is an alternative dispute resolution (ADR) process whereby the parties to a dispute use a conciliator, who meets with the parties separately in an attempt to resolve their differences. They do this by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bringing about a negotiated settlement. Conciliation differs from arbitration in that the conciliation process, in and of itself, has no legal standing, and the conciliator usually has no authority to seek evidence or call witnesses, usually writes no decision, and makes no award. Conciliation differs from mediation in that the main goal is to conciliate, most of the time by seeking concessions. In mediation, the mediator tries to guide the discussion in a way that optimizes parties' needs, takes feelings into account and reframes representations.
C.I.F
Cost of Goods, Insurance, and Freight
Determinants of Supply
Cost of inputs, technological advances, taxes/subsidies, producer expectations, price of other goods that can be produced, current quantity of product already in the market
Fixed costs
Costs that must be paid regardless of how much of a good or service is produced; also called sunk costs
independent agency
Created by Congress to address concerns that go beyond the scope of ordinary legislation.
Investing
Creating capital goods. Acquiring or producing structures, machinery and equipment or inventories
Defamation
Defamation—also calumny, vilification, and traducement—is the communication of a false statement that harms the reputation of an individual person, business, product, group, government, religion, or nation. Most jurisdictions allow legal action to deter various kinds of defamation and retaliate against groundless criticism. It is usually regarded as irrational unprovoked criticism which has little or no factual basis and can be compared to hate speech, which can also be taken to encompass discrimination against a particular organisation, individual, nation, corporation or other political, social, cultural or commercial entity which has often but not always been entrenched in the practitioner by old prejudices and xenophobia.
Free on Board
Delivered to Carrier
Delivery
Delivery is the process of transporting goods from a source location to a predefined destination. There are different delivery types. Cargo (physical goods) are primarily delivered via roads and railroads on land, shipping lanes on the sea and airline networks in the air. Certain specialized goods may be delivered via other networks, such as pipelines for liquid goods, power grids for electrical power and computer networks such as the Internet or broadcast networks for electronic information.
Proving cash
Determining that the amount of cash agrees with the balance of the cash account in the accounting records
debit card
Directly transfers money from a person's account to the account of a retailer.
Bankers Acceptances
Discount
Commercial Paper
Discount
Treasury bills
Discount
Informational Role of Financial Markets
Do market prices equal the fair value estimate of a security's expected future risky cash flows? Can we rely on markets to allocate capital to the best uses? Other mechanisms to allocate capital? Advantages/disadvantages of other systems?
Flat Organizational Structure
Flat Organizational Structure Many small companies use a flat organizational structure, where very few levels of management separate executives from analysts, secretaries and lower-level employees. Flat organizations work best when a company has less than 20 employees, especially if the company employs one or two employees per department. One advantage of using a flat organizational structure for management is that decisions can be made relatively quickly. The flat organizational lacks the typical bureaucracy of taller organizational structures--those with many levels of management.
Dissaving
If individuals or households spend more than their current income they are said to be dissaving
Appellate Courts
If the judge made a mistake in the law or the trial procedure, the parties can appeal the case to the appellate court. It is important to note that courts of appeal are not set up to re-hear cases in their entirety. Instead, courts of appeal typically address whether a lower court made serious mistakes of law. Additionally, an appellate court can usually take cases from courts of special jurisdiction as well.
Stock Tax
Important to know that when one company owns stock in another, the dividends have a partial tax exemption.
Divisional Structure
In a divisional structure, people with diverse occupational specialties are put together in formal groups by similar products or services, customers or clients, or geographic regions.
consolidations
In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into much larger ones.
Assault
In common law, assault is the act of creating apprehension of an imminent harmful or offensive contact with a person. An assault is carried out by a threat of bodily harm coupled with an apparent, present ability to cause the harm.
Tort
In law, a private or civil wrong
Revocation of Will
Intentional physical destruction of a will by the testator will revoke it, through deliberately burning or tearing the physical document itself, or by striking out the signature. In most jurisdictions, partial revocation is allowed if only part of the text or a particular provision is crossed out. Other jurisdictions will either ignore the attempt or hold that the entire will was actually revoked. A testator may also be able to revoke by the physical act of another (as would be necessary if he is physically incapacitated), if this is done in his presence and in the presence of witnesses. Some jurisdictions may presume that a will has been destroyed if it had been last seen in the possession of the testator but is found mutilated or cannot be found after his or her death. A will may also be revoked by the execution of a new will. Most wills contain stock language that expressly revokes any wills that came before them, however, because normally a court will still attempt to read the wills together to the extent they are consistent.
prime rate
Interest rate charged by banks to their best corporate borrowers.
Bond/Note Denomination
Minimum $100, most have $1,000 denomination
Misrepresentation
Misrepresentation is a concept in the contract law of England and some other Commonwealth countries, referring to a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation.
MZM
Money Zero Maturity Measuring of an economy's liquid money supply. Shows the money that is available within a particular economy that may be used for consumption and spending. Includes all of the money in M2, minus time deposits, and plus money market funds.
Equity capital
Money invested in a business in return for a share in the business's profits
Debt capital
Money loaned to a business with the understanding that the money will be repaid, with interest, in a certain time period
reserve requirement
Money on deposit, minus the _____, can be loaned by banks to customers.
fiat money
Money with no intrinsic value and cannot be redeemed for commodities, but is made legal tender through govn't decree. Ex: US currency
Which of the following market structures have economic profits competed away by new firms entering the industry in the long run?
Monopolistic competition and pure competition
coins
Most common medium of exchange in colonial America.
acceleration clause
Most often found in mortgage/real estate loans, this outlines the reasons that the lender can demand loan repayment. If the borrower does not make payments on time, the entire unpaid principal balance can be declared immediately due and payable.
money market mutual fund
Mutual fund that invests exclusively in short-term assets, such as: treasury bills, negotiable certificates of deposit, and commercial paper.
State Courts
Of cases filed annually in the U.S., about one million cases are filed in federal courts, while more than 30 million are filed in state courts. Most legal cases are handled at the state court level because state courts have power to hear almost all types of cases involving citizens of that state -- including almost all of the following types of cases: Family law cases (including divorce, child custody cases, and adoptions) Personal injury cases (i.e. lawsuits for injury from car accidents and defective products) Estate planning and probate matters Criminal law matters (including all felonies and misdemeanors that arise from state criminal statutes) Traffic violations
Holder
One in possession of commercial paper.
Invasion of privacy
One is the invasion of privacy, a tort based in common law allowing an aggrieved party to bring a lawsuit against an individual who unlawfully intrudes into his or her private affairs, discloses his or her private information, publicizes him or her in a false light, or appropriates his or her name for personal gain.
M2
One measure of the money supply that includes M1, plus savings and small time deposits, overnight repos at commercial banks, and non-institutional money market accounts. Used to forecast inflation.
M3
One measure of the money supply that includes M2, plus large time deposits, repos of maturity greater than one day at commercial banks, and institutional money market accounts.
Limit Order:
Order to buy or sell at a specified price or better - on the exchange the limit order is placed in a limit order book kept by an exchange official or computer ex) stock trading at 50 could place a buy limit at 49.90 or sell limit order at 50.25
Accounting records
Organized summaries of a business's financial activities
Accounting Records
Organized summaries of a business's financial activities.
Cost-based pricing
Price determine by using the wholesale cost of an item as the basis for the price charged
Competition-based pricing
Pricing that is determined by considering what competitors charge for the same goods
Demand-based pricing
Pricing that is determined by how much customer are willing to pay for a product or service
commercial bank
Primary lending function is to help business owners who want to expand.
commercial bank
Privately owned financial institution that accepts demand/time deposits, makes loans, and provides various services. Accounts for about 60% of the US deposit/loan business.
Imports
Products and services that are brought in from another county to be sold
Exports
Products and services that are produced in one country and sent to another to be sold
Collateral
Property that the borrower forfeits if he or she defaults on the loan
Securities Investor Protection Act of 1970
Protects investors from losses if a brokerage firm fails (up to $500,000 per customer).
Breach of Contract Remedies
Punitive & Compensatory & Liquidation
Deregulation
Reducing or eliminating government intervention to control particular market activities, especially of private firms. For example, removing price controls or monopoly privileges
Eliciting deposit insurance has the primary disadvantage of
Reducing the stability of the banking system causing bank runs
Renting
Renting, also known as hiring, is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership.
Factors in constructing or using an index
Representative? Broad or narrow? How is it constructed?
annual report
Required document made available to shareholders of mutual funds on a fiscal year basis. It discloses certain aspects of a fund's operations and financial conditions.
Fair Credit Billing Act
Requires that creditors must investigate a debtor's written complaints about the accuracy of a bill or statement and respond within 30 days.
Child Custody
Residence and contact issues typically arise in proceedings involving divorce (dissolution of marriage), annulment and other legal proceedings where children may be involved. In most jurisdictions the issue of which parent the child will reside with is determined in accordance with the best interests of the child standard.
Matching expenses with revenue
Revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period
Objective evidence
Revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period
Realization of revenue
Revenue is recorded at the time goods or services are sold
Capacity
Sometimes the capacity of either natural or artificial persons to either enforce contracts, or have contracts enforced against them is restricted. For instance, very small children may not be held to bargains they have made, on the assumption that they lack the maturity to understand what they are doing; errant employees or directors may be prevented from contracting for their company, because they have acted ultra vires (beyond their power). Another example might be people who are mentally incapacitated, either by disability or drunkenness.[54] In these cases the contract is either void or voidable.
Block Houses
Specialize in large block trades
Consumption
Spending to acquire consumer goods and services, or using up those goods and services to satisfy wants
Federal Courts
State courts do not have power to hear certain kinds of cases -- including those involving bankruptcy, immigration, patents, copyrights, and violations of federal criminal law. These types of cases are handled exclusively by federal courts.
Unit Trust
Stock exchange listing - no
FTSE 100
The British (London Stock Exchange) equivalent of the Dow Jones 30 Industrial Average.
reduce the risk of inflation
The Federal Reserve might sell Treasury bonds and raise the discount rate in order to:
The Federal Trade Commission
The Federal Trade Commission (FTC) is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act. Its principal mission is the promotion of consumer protection and the elimination and prevention of anticompetitive business practices, such as coercive monopoly. The Federal Trade Commission Act was one of President Woodrow Wilson's major acts against trusts. Trusts and trust-busting were significant political concerns during the Progressive Era. Since its inception, the FTC has enforced the provisions of the Clayton Act, a key antitrust statute, as well as the provisions of the FTC Act, 15 U.S.C. § 41 et seq. Over time, the FTC has been delegated the enforcement of additional business regulation statutes and has promulgated a number of regulations (codified in Title 16 of the Code of Federal Regulations).
Workplace Safety & Health
The Occupational Safety and Health (OSH) Act is administered by the Occupational Safety and Health Administration (OSHA). Safety and health conditions in most private industries are regulated by OSHA or OSHA-approved state programs, which also cover public sector employers. Employers covered by the OSH Act must comply with the regulations and the safety and health standards promulgated by OSHA. Employers also have a general duty under the OSH Act to provide their employees with work and a workplace free from recognized, serious hazards. OSHA enforces the Act through workplace inspections and investigations. Compliance assistance and other cooperative programs are also available.
UCC
The Uniform Commercial Code (UCC or the Code), first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.
Agency Relationships
The _____________ is an area of commercial law dealing with a set of contractual, quasi-contractual and non-contractual fiduciary relationships that involve a person, called the agent, that is authorized to act on behalf of another (called the principal) to create legal relations with a third party.[1] Succinctly, it may be referred to as the equal relationship between a principal and an agent whereby the principal, expressly or implicitly, authorizes the agent to work under his or her control and on his or her behalf. The agent is, thus, required to negotiate on behalf of the principal or bring him or her and third parties into contractual relationship. This branch of law separates and regulates the relationships between: agents and principals (internal relationship), known as the principal-agent relationship; agents and the third parties with whom they deal on their principals' behalf (external relationship); and principals and the third parties when the agents deal.
Capital
The account used to summarize the owner's equity in a business
double-entry procedure
The accounting requirement that each transaction be recorded by an entry that has equal debits and credits
Functions of business
The activities of business--production, marketing, management, and finance--that are dependent on the others in order for the business to be effective
Markup
The amount added to the cost of merchandise to establish the selling price
premium
The amount by which a bond or stock sells above its par value.
maturity value
The amount that will be received at the time a security is redeemed at its maturity. For most securities, maturity value equals par value.
Wants
The apparently limitless desires or wishes people have for particular goods or services
transferee
The beneficiary who receives the benefits of a generation skipping transfer trust
Macroeconomics
The branch of economic theory concerned with the economy as a whole. It deals with large aggregates such as total output, rather than with the behaviour of individual consumers and firms
Environmental Law
The broad category of "environmental law" may be broken down into a number of more specific regulatory subjects. While there is no single agreed-upon taxonomy, the core environmental law regimes address environmental pollution. A related but distinct set of regulatory regimes, now strongly influenced by environmental legal principles, focus on the management of specific natural resources, such as forests, minerals, or fisheries. Other areas, such as environmental impact assessment, may not fit neatly into either category, but are nonetheless important components of environmental law.
Performance
The buyer's main duties are simple: payment of the purchase price and acceptance of delivery. Just as the buyer is often unable to secure specific performance of the seller's duty to deliver, so the seller is not always able to enforce his claim for acceptance of delivery against a buyer who refuses to take delivery. Most countries do not object to such a claim, but in England and the United States the remedy is to refer the seller to the market: as long as he is still the owner of the goods, he should at least attempt to resell them at a reasonable price. Only if this is impossible or impracticable may he sue the buyer.
long position
The buying of a security such as a stock, commodity or currency, with the expectation that the asset will rise in value. Stock market investors are in this position when they hold stocks purchased with case or on margin.
horizontal analysis
The calculation of dollar and/or percentage changes from one year to the next in an item on financial statements.
Assignee
The party to whom the assignment is made.
Simple Structure
The first organizational form is the simple structure. This is the form often found in a firm's very early, entrepreneurial stages, when the organization is apt to reflect the desires and personality of the owner or founder. An organization with a simple structure has authority centralized in a single person, a flat hierarchy, few rules, and low work specialization.
Axes
The fixed lines on a graph which carry the scales against which the coordinates are plotted
form 940
The form that accompanies the payment of taxes to the federal government is a
W-2
The form used by the employer to report his/her annual unemployment tax is a
National income
The general term used to refer to the total value of a country's output of goods and services in some accounting period without specifying the formal accounting concept such as Gross Domestic Product
Law of demand
The inverse relationship between price and quantity of a good or service demanded
banking
The issuing, exchanging, loaning, and custody of money and the extension of credit.
tax liability
The item on a personal/business income tax return that taxpayers should pay the greatest amount of attention to and work hardest to reduce.
Fiscal Period
The length of time for which a business summarizes and reports financial information.
loss on plant assets
The loss that results when a plant asset is sold for less than book value.
Depreciation
The lowering of the value of an asset to reflect its current worth
The optimal level of pollution for society is when
The marginal benefits of pollution equal the marginal costs of pollution
Tax base
The maximum amount of earnings on which a tax is calculated
Applicable Exclussions amount
The maximum value of the property that can be transferred to others without incurring any federal gift or estate tax because of the application of the applicable credit amount (unified credit)
GDP: Gross Domestic Product
The monetary value of all of a nation's goods and services produced within a nation's borders and within a particular period of time, such as a year. It became the official measure of the U.S. economy in 1991. It replaced "gross national product," which covered all goods and services produced by U.S. residents regardless of where they were working.
The disadvantage of the open end form is
The need to keep a cash reserve Vulnerable to panics
par value
The nominal dollar amount assigned to a security by the issuer. Same thing as face value.
Account number
The number assigned to an account
Account Number
The number assigned to an account.
Common-law Marriage
The original concept of a common-law marriage is a marriage that is considered valid by both partners, but has not been formally registered with a state or church registry, or a formal religious service. In effect, the act of the couple representing themselves to others as being married acts as the evidence that they are married. In jurisdictions recognizing common-law marriages, such a marriage is not legally distinct from a traditional ceremonial marriage enacted through a civil or religious ceremony in terms of the couple's rights and obligations to one another.
Interest rate
The percentage rate which must be paid for the use of investable funds
Component percentage
The percentage relationship between one financial statement item and the total that includes that item
Component Percentage
The percentage relationship between one financial statement item and the total that includes that item.
payer
The person who writes a check.
Equilibrium price and quantity
The point at which the supple and demand curves meet
Equal Weighted
considers not only price but also # shares (invest same amount of $ in each stock regardless of market value of stock)
credit check
The process of evaluating an applicant's loan request or a corporation's debt issue in order to determine the likelihood that the borrower will live up to his/her obligations. AKA credit analysis.
increase the total debits of the trial balance
The purchase of a delivery van for cash would __________
Right to die
The right to die is an ethical or institutional entitlement of any individual to commit suicide or to undergo voluntary euthanasia. Possession of this right is often understood to mean that a person with a terminal illness should be allowed to commit suicide or assisted suicide or to decline life-prolonging treatment, where a disease would otherwise prolong their suffering to an identical result. The question of who, if anyone, should be empowered to make these decisions is often central to debate.
Monetary base
The same as "high-powered money": cash in commercial banks, plus cash in circulation and deposits of the commercial bank at the central bank
Warranty of Title
The seller warrants that the title being conveyed is good and that the transfer is lawful.
Price discrimination
The selling of a good or service at different prices to different buyers or classes of buyers in the absence of any differences in the costs of supplying it
Privatization
The selling-off of publicly owned enterprises to private owners
Accounting cycle
The series of accounting activities included in recording financial information for a fiscal period
Accounting Cycle
The serious of accounting activities included in recording financial information for a fiscal period
Culture
The set of customs, beliefs, and social attitudes that characterize a particular group of people
Modular Structure
The seventh organizational form differs from the sixth in that it is oriented around outsourcing certain pieces of a product rather than outsourcing certain processes (such as human resources or warehousing) of an organization. In a modular structure, a firm assembles product chunks, or modules, provided by outside contractors. One article compares this form of organization to "a collection of Lego bricks that can snap together.
Normal balance
The side of the account that is increased
Normal Balance
The side of the account that is increased.
Gross National Expenditure (GNE)
The sum of all spending on consumption and investment plus government spending on goods and services and net exports (total exports minus imports) It is equivalent in value to GDP
Diminishing returns
The tendency for additional units of a productive factor to add less and less to total output when combined with other inputs which are to some degree fixed in quantity Combining more of a variable input, such as labour, with a given amount of some other input, such as capital in the form of a machine, will eventually result in the marginal product for labour declining
Net immigration
The total number of people leaving the country to take up permanent residence abroad minus the number of people entering the country for the purpose of taking up permanent residence
Government spending
The total outlays by government on goods and services during some accounting period, usually a year. Government outlays such as welfare benefits to households, for example, are normally excluded from this amount on the grounds that they are merely transfers of income from taxpayers to the beneficiaries of such programs
Total earnings
The total pay due for a pay period before deductions
Net exports
The total value of goods and services exported during the accounting period minus the total value of goods and services imported
workers' compensation
The type of business insurance that pays for medical care/physical rehab of workers injured on the job.
Fiscal policy
The use by a government of its expenditures on goods and services and/or tax collections to influence the level of national income
Directly Marketed
You find them May avoid front end load - Front end load is an up front cost (fee) to purchase a share of a mutual fund.
Depreciation
The using up or wearing out of capital goods
Gross Domestic Product (GDP)
The value of all the goods and services produced in an economy during some accounting period, usually a year
Sole Proprietorship
The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person, usually the individual who has day-to-day responsibility for running the business. Sole proprietorships own all the assets of the business and the profits generated by it. They also assume complete responsibility for any of its liabilities or debts. In the eyes of the law and the public, you are one in the same with the business. Advantages of a Sole Proprietorship • Easiest and least expensive form of ownership to organize. • Sole proprietors are in complete control, and within the parameters of the law, may make decisions as they see fit. • Profits from the business flow-through directly to the owner's personal tax return. • The business is easy to dissolve, if desired. Disadvantages of a Sole Proprietorship • Sole proprietors have unlimited liability and are legally responsible for all debts against the business. Their business and personal assets are at risk. • May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans. • May have a hard time attracting high-caliber employees, or those that are motivated by the opportunity to own a part of the business. • Some employee benefits such as owner's medical insurance premiums are not directly deductible from business income (only partially as an adjustment to income).
Annulment v. Divorce
There are two ways to legally end a marriage - annulment and divorce. An annulment is a legal procedure which cancels a marriage between a man and a woman. Annulling a marriage is as though it is completely erased - legally, it declares that the marriage never technically existed and was never valid.
deposits
These are considered liabilities for a bank.
finance companies
These companies often charge higher interest rates on loans because people who borrow from them usually have had past credit trouble or don't otherwise qualify for loans from lower interest sources.
Trial Courts
Trial courts are generally where cases start. There are two types of trial courts: criminal and civil, and although the procedures are different, the general structure is the same. Each side in a case has the opportunity to learn or discover as many facts about the case as possible before trial. At the trial, the parties will present their evidence in order to convince a judge or jury that the facts are favorable to their side. The judge and the jury will reach their decision, or verdict, which is the end for most cases.
false
True or false? Purchasers of automobile liability insurance can reduce their premium costs by agreeing to a deductible.
Traditional IRA
Type of IRA where contributions are tax-deductible at the time they are deposited and both the principal and the income earned in the account are taxed as regular income when they are withdrawn as distributions.
Vicarious liability
Vicarious liability is a form of strict, secondary liability that arises under the common law doctrine of agency - respondeat superior - the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the "right, ability or duty to control" the activities of a violator. It can be distinguished from contributory liability, another form of secondary liability, which is rooted in the tort theory of enterprise liability.
Absolute Advantage
When a person can create more of something
2-for-1 stock split
When each stockholder receives an additional share for each share held, but the value of each share is reduced by half: two shares now equal the original value of one share before the split.
escrow
When real estate agents have the bank collect money from buyers and put it into the seller's account, they are using the bank's _____ services.
credit cash
When reconciling the bank statement, an NSF check for $480 is included. The entry to record this reconciling item would include a __________.
census tract
a small geographic area into which a state or country is divided for the purpose of gathering and reporting census data
cash discount
an amount deducted from the selling price for payment within a specified time period
credit
an arrangement for deferred payment for goods and services; credit allows a business or individual to obtain products in exchange for a promise to pay later. An addition to the right side of an account that decreases the balance for all assets and expense accounts and increases the balance for all liability and revenue accounts
form 940
an employer's annual unemployment tax return
C-cooperation
an entity that pays taxes on earnings; its shareholders pay taxes as well
contingency fund
an extra amount of money that is saved and used only when absolutely necessary
controlling account
balance must equal the total of all the account balances in the subsidiary ledger
drawee
bank that maintains the account and holds the funds of the person or business that is writing the check
unemployment taxes
based on a percentage of their employees' gross earnings and are collected to provide funds for workers who are temporarily out of work
Product costs
costs incurred in the acquisition or manufacture of good
Period costs
costs not traceable to specific products and expensed in the period incurred. Selling and administrative costs are period costs
foreclosure
court-ordered sale of the property
Check 21
created a new category of negotiable instrument
Federal Reserve Act
created a system to stabilize the banking system
stop payment order
demand by the depositor that the bank not honor a certain check
outstanding deposits
deposits that have been made and recorded in the checkbook but do not appear on the bank statement
A UIT
does not have a board of directors, corporate officers, or an investment adviser to render advice during the life of the trust.
Delegator
party delegating his duty to a third party
demand deposit
payable on demand whenever the depositor chooses
depositers
people who put money into banks
reserves
percentages of deposits that are set aside to help with liquidity drops
demographics
personal characteristics that describe a population by age, gender, income, ethnic background, education, and occupation, among others
equity
represents net assets, or total assets, minus total liabilities
Construction in progress
represents the partially completed stores or other buildings that a company such as The Home Depot plans to occupy when completed.
duty of obedience
requires employee to follow the reasonable orders and rules of the employer; requires agent to carefully obey the instructions of the principal
duty of reasonable performance
requires employee to perform assigned duties at the prescribed time and in the prescribed manner
matching principle
requires that expenses incurred in producing revenues be deducted from the revenues they generated during the accounting period
canceled check
returned checks that are stamped and marked with the word paid and the date of the payment
conditions
the ___ at the time of the loan request, including potential for growth, amount of competition, location, form of ownership, and insurance
Federal Reserve System Open Market Account
the account the fed maintains international reserves in is the...
Capital
the account used to summarize the owner's equity in a business
Risk-Return Trade-Off
-Assets with higher expected returns have higher risk -Stock portfolio loses money 1 of 4 years on average
Corporate Governance and Corporate Ethics
-Businesses and markets require trust to operate efficiently -Governance and ethics failures cost the economy billions, if not trillions -Accounting scandals -Misleading research reports -Auditors: Watchdogs or consultants?
Asset Allocation
-Primary determinant of a portfolio's return -Percentage of fund in asset classes
Sarbanes-Oxley Act:
-Requires more independent directors on company boards -Requires CFO to personally verify the financial statements -Created new oversight board for the accounting/audit industry -Charged board with maintaining a culture of high ethical standards
Factors influencing "quoted" yields
Par value vs. investment value 360 vs. 365 days assumed in a year (366 leap year) Simple vs. Compound Interest
Accounting scandals
Enron, WorldCom, Rite-Aid, HealthSouth, Global Crossing, Qwest
Volcker Rule:
Limited banks' ability to trade for own account
Repurchase Agreements (RPs or repos) and Reverse RPs
Short term sales of securities arranged with an agreement to repurchase the securities a set higher price.
Government Issues
US treasury Bonds and Notes
1970s: Fannie Mae and Freddie Mac:
bundle mortgage loans into tradable pools (securitization)
Municipal Bond tax
not taxed must use taxable equivalent yield
Systemic Risk
-Risk of breakdown in financial system — spillover effects from one market into others -Banks highly leveraged; assets less liquid -Formal exchange trading replaced by over-the-counter markets — no margin for insolvency protection
Businesses and markets require trust to operate efficiently
-Without trust additional laws and regulations are required -Laws and regulations are costly
Opening an Account
Writing an account title and number on the heading of an account.
endorsement
authorized signature that is written or stamped on the back of a check
Marriage Age
18 or 16 with parental consent but the other partner must be 18 or older. Younger with judicial consent (with no strict minimum age). With parental consent, serious reasons are required for a minor to marry; without parental consent, the unwillingness of the parents has to constitute an abuse.
Margin Call
: notification from broker you must put up additional funds or have your position liquidated. While the position is open the investor's equity = Market Value - Amount borrowed
Limited liability company
A Limited Liability Company (LLC) is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation. It is often more flexible than a corporation, and it is well-suited for companies with a single owner.
credit card
A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. They have higher interest rates (around 19% per year) and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating. One of the most popular and widely accepted forms of payment for consumer goods and services in the U.S.
fractional reserve banking
A certain percentage of any deposit that is placed in the vault while the remainder is lent out/invested by the bank.
Stare Decisis
A common law doctrine under which judges are obligated to follow the precedents established in prior decisions
stock company
A company or corporation whose capital is divided into shares.
defined benefit plan
A company retirement plan, such as a pension plan, in which a retired employee receives a specific amount based on salary history and years of service, and in which the employer bears the investment risk. Contributions may be made by the employee, the employer, or both.
contract of sale
A contract of sale is a legal contract an exchange of goods, services or property to be exchanged from seller (or vendor) to buyer (or purchaser) for an agreed upon value in money (or money equivalent) paid or the promise to pay same. It is a specific type of legal contract.
Executed Contract
A contract that has been completely performed by both parties.
Dissolution
A husband and wife may obtain a divorce through the simplified dissolution procedure only if all of the following statements are true about both spouses at the time that they jointly file a petition for simplified dissolution of marriage.
Judge
A judge presides over court proceedings, either alone or as a part of a panel of judges. The powers, functions, method of appointment, discipline, and training of judges vary widely across different jurisdictions. The judge is supposed to conduct the trial impartially and in an open court. The judge hears all the witnesses and any other evidence presented by the parties of the case, assesses the credibility and arguments of the parties, and then issues a ruling on the matter at hand based on his or her interpretation of the law and his or her own personal judgment. In some jurisdictions, the judge's powers may be shared with a jury. In inquisitorial systems of criminal investigation, a judge might also be an examining magistrate.
Partnership by Estoppel
A judicially created partnership that may, at the court's discretion, be imposed for purposes of fairness. The court can prevent those who present themselves as partners (but who are not) from escaping liability if a third person relies on an alleged partnership in good faith and is harmed as a result.
balloon payment
A large, final payment on the loan. These clauses usually call for the final payment to be made in 5, 10, 15 years, etc., from the original sale date.
Natural monopoly
A market situation in which economies of scale are such that a single firm of efficient size is able to supply the entire market demand
treasury bonds
A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Makes interest payments semi-annually and the income that holders receive is only taxed at the federal level. Issued with a minimum denomination of $1,000.
Temporary accounts
Accounts used to accumulate information until it is transferred to the owner's capital account
Temporary Accounts
Accounts used to accumulate information until it is transferred to the owner's capital account.
NASDAQ Consolidation
Acquired Instinet/Island in 2005 Acquired Boston Stock Exchange in 2007 Jointly acquired Swedish exchange OMX
Active versus Passive Management
Active management (inefficient markets) Passive management (efficient markets)
Capital Resources
Actual hard equipment like factories and tractors
CLOSING STATEMENT
An affidavit signed by the personal representative at the end of an informal probate proceeding to close the estate and to be discharged.
Central bank
An agency empowered by a government to manage a country's monetary and financial institutions, issue and maintain the domestic currency, and handle the official reserves of foreign exchange Primarily a "bank for banks."
Central bank
An agency empowered by a government to manage a country's monetary and financial institutions, issue and maintain the domestic currency, and handle the official reserves of foreign exchange Primarily a "bank for banks."
call option
An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period. Used by securities investors to gain control of a stock at a price below the market price.
guaranteed insurability
An insurance policy in which the insurer is required to renew the policy for a specified amount of time regardless of changes to the health of the insured. Most important to individuals wishing to purchase health insurance.
Goodwill
An intangible value attached to a business, evidenced by the ability to earn larger net income per dollar of investment than that earned by competitors in the same industry
debenture
An unsecured corporate bond.
Requirements for Will
Any person over the age of majority and of sound mind (having appropriate mental capacity) can draft his or her own will with or without the aid of a lawyer. (Estimates of the percent of Americans who write wills before they die range from 30 percent to 50 percent.[2]) Additional requirements may vary, depending on the jurisdiction, but generally include the following requirements: The testator must clearly identify himself as the maker of the will, and that a will is being made; this is commonly called "publication" of the will, and is typically satisfied by the words "last will and testament" on the face of the document. The testator should declare that he revokes all previous wills and codicils. Otherwise, a subsequent will revokes earlier wills and codicils only to the extent to which they are inconsistent. However, if a subsequent will is completely inconsistent with an earlier one, the earlier will is considered completely revoked by implication. The testator may demonstrate that he has the capacity to dispose of his property ("sound mind"), and does so freely and willingly. The testator must sign and date the will, usually in the presence of at least two disinterested witnesses (persons who are not beneficiaries). There may be extra witnesses, these are called "supernumerary" witnesses, if there is a question as to an interested-party conflict. Some jurisdictions, notably Pennsylvania, have long abolished any requirement for witnesses. In the United States, Louisiana requires both attestation by two witnesses as well as notarization by a notary public. "Holographic" or handwritten wills generally require no witnesses to be valid. If witnesses are designated to receive property under the will they are witnesses to, this has the effect, in many jurisdictions, of either (i) disallowing them to receive under the will, or (ii) invalidating their status as a witness. In a growing number of states in the United States, however, an interested party is only an improper witness as to the clauses that benefit him or her (for instance, in Illinois). The testator's signature must be placed at the end of the will. If this is not observed, any text following the signature will be ignored, or the entire will may be invalidated if what comes after the signature is so material that ignoring it would defeat the testator's intentions. One or more beneficiaries (devisees, legatees) must generally be clearly stated in the text, but some jurisdictions allow a valid will that merely revokes a previous will, revokes a disposition in a previous will, or names an executor.
Bailment
Bailment describes a legal relationship in common law where physical possession of personal property, or a chattel, is transferred from one person (the 'bailor') to another person (the 'bailee') who subsequently has possession of the property. It arises when a person gives property to someone else for safekeeping, and is a cause of action independent of contract or tort.
secondary reserve
Bank assets invested in high grade short-term marketable securities (such as treasury bills) which serve as a source of liquidity supplemental to primary reserves. Ex: securities purchased from Federal govn't.
lockbox service
Bank collection service that allows accounts receivable payments to be sent directly to the bank.
depository intermediary
Bank, building society, credit union, or other financial institution that solicits and accepts savings of the general public as demand deposits or time deposits, and pays a fixed or variable rate of interest.
Investment banking arrangements (Best Efforts)
Bankers helps sell but makes no firm commitment
Chapter 11
Bankruptcy provides a way for both individuals and businesses to get a fresh financial start when debts become unmanageable. There are several types of bankruptcy, differing in solutions to debt problems, and each "chapter" or type is generally suited to a certain type of debtor. Chapter 11 bankruptcy reorganizes and restructures the filer's debts, and is mainly used by corporations. However, Chapter 11 can also be used by individuals. Find out if Chapter 11 is right for you.
chartered
Banks may be ____ by either federal or state govn't.
national banks
Banks that receive their charters from the US Dept. of the Treasury.
Derivative Securities (Futures)
Basic Positions - Long (buy/sell) -Short (buy/sell) Terms -Delivery Date -Deliverable Item
Battery
Battery is a criminal offense involving unlawful physical contact, distinct from assault which is the act of creating apprehension of such contact.
A UIT does not actively trade its investment portfolio.That is, a UIT buys a relatively fixed portfolio of securities [for example, five, ten, or twenty specific stocks or bonds], and holds them with little or no change for the life of the UIT.
Because the investment portfolio of a UIT generally is fixed, investors know more or less what they are investing in for the duration of their investment. Investors will find the portfolio securities held by the UIT listed in its prospectus.
Choice
Because wants are unlimited and resources are limited, all economies must choose which goods and services should be produced and in what quantities
Mechanics of Short Sales
Borrow stock from a broker/dealer, must post margin Broker sells stock and deposits proceeds and margin in a margin account (you are not allowed to withdraw the sale proceeds until you 'cover') Covering or closing out the position: Buy the stock and broker returns the stock title to the party from which it was borrowed
Complimentary Good
Bought with another good, increase in price leads to decrease in demand of its complimentary good and vice versa
Bribery
Bribery is an act of giving money or gift giving that alters the behavior of the recipient, where the gift is of a dishonest nature.
Auction Markets
Brokers and dealers trade in one location, trading is more or less continuous
Potential Conflicts of Interest: Revenue Sharing
Brokers put investors in funds that may that ___may not be the most appropriate _________________________ Mutual funds could direct trading _________to higher cost brokers____________ Revenue sharing is ___not illegal______ but it must be ____disclosed____ to the investor
Expansionary fiscal policy will likely cause a
Budget deficit
Partnership
Buisness led by multiple people
Shares Outstanding Close v open differences
Closed-end: no change unless new stock is offered Open-end: changes when new shares are sold or old shares are redeemed
Which term is used when one person agrees to be responsible for a loan if the primary person fails to make payments
Co signer
C.O.D
Collect on Delivery
Business Law
Commercial law, also known as business law, is the body of law that applies to the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales.[1] It is often considered to be a branch of civil law and deals with issues of both private law and public law.
check safekeeping
Common practice whereby the bank does not return canceled checks but allows customers to request photocopies if proof of payment is required.
Consumption Timing
Consumption smoothes over time When current basic needs are met, shift consumption through time by investing surplus
Contract Fraud
Contract fraud occurs when one party in a contract presents information to another that is incorrect, deceitful, or meant to confuse the other party. For example, contract fraud may be found when an individual claims that a contract is for the sale of a car, when in fact the terms of the contract specify that it is for the sale of boat.
Derivative securities
Contract, value derived from underlying market condition
Conversion
Conversion is a common law tort. A conversion is a voluntary act by one person inconsistent with the ownership rights of another.[1] It is a tort of strict liability in the United Kingdom.[2] Its criminal counterpart is not typically theft but rather criminal conversion, which differs from theft in the lack of intent to deprive the owner of possession of the property. Examples are seen in cases where trees are cut down and the lumber hauled from the land by someone not having clear ownership; or removing furniture belonging to another from a cohabited dwelling, placing it in storage and not telling the owner of the whereabouts. In medieval times, a conversion would occur when bolts of cloth were bailed for safe keeping, and the bailee or a third party took them and made clothes for their own use or for sale.
Private Issues
Corporate Bonds (investment Grade v. Speculative Grade)
Investment Trust
Corporation tax
Unit Trust OEIC
Corporation tax at 20%
Limited Liability Company
Corporation whose members are not personally liable for company debts and whose earnings are taxed only once, when they are paid out as dividends. It has fewer rules and restrictions than does an S-corporation.
Examples of deposits type institutions
Credit unions Savings and loans associations Commercial banks
online/electronic account access
Creditors are encouraging this for the following reasons: Bad debt collection costs are decreased; postage expenses are reduced; and material costs associated w/ producing paper statements are reduced.
White-Collar Crime
Crime committed by people of high social position in the course of their occupations; no violence
5th Amendment
Criminal Proceedings; Due Process; Eminent Domain; Double Jeopardy; Protection from Self incrimination
6th Amendment
Criminal Proceedings; Must inform defendant of charge/s; Right to Attorney; Right to fair impartial jury
Criminal law
Criminal law is the body of law that relates to crime. It regulates social conduct and proscribes whatever is threatening, harmful, or otherwise endangering to the property, health, safety, and moral welfare of people. It includes the punishment of people who violate these laws.
Domestic Indexes
Dow Jones Industrial (30 stocks) Standard and Poors 500 Composite NASDAQ composite (>3000 Firms) NYSE Composite Wilshire 5000 (>6000 stocks)
Unit Trust
Dual pricing which reflects the underlying value of the scheme assets
Which one of the following is typically not an example of a fixed expense in a budget?
Electricity payment
Electronic Trading on the NYSE
Electronic order placement is growing, large orders still require human intervention.
SuperDot
Electronic order routing system allows brokers to electronically send orders directly to specialist. Useful for program trading
payment history
Element of the FICO credit-scoring system that carries the most weight.
Floor Broker:
Employee of a member firm, processes orders for the firm, earns a commission.
Jan 31 of the next year
Employers are required to furnish each employee an annual statement of earnings and withholdings before
employment at will
Employment principle that if there is no specific employment contract saying otherwise, the employer or employee may end an employment relationship at any time, regardless of cause.
Securities Acts of 1934
Established the SEC and require periodic disclosure of relevant financial information for firms with publicly traded securities Gives authority to regulate exchanges and OTC trading/traders to the SEC CFTC retains authority over commodity futures and Federal Reserve sets margin requirements
Estate Planning
Estate planning is the process of anticipating and arranging for the disposal of an estate during a person's life. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses. However, the ultimate goal of estate plan is determined by the specific goals of the client and may be as simple or complex as the client's needs dictate.[1] Guardians are often designated for minor children and beneficiaries in incapacity.
Franchise
Franchising is the practice of leasing for a prescribed period of time the right to use a firm's successful business model and brand. The word "franchise" is of Anglo-French derivation—from franc, meaning free—and is used both as a noun and as a (transitive) verb.[1] For the franchiser, the franchise is an alternative to building "chain stores" to distribute goods that avoids the investments and liability of a chain. The franchisor's success depends on the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.
4th Amendment
Freedom from unreasonable searches and seizures
1st Amendment
Freedom of Religion, Speech, Press, Assembly, and Petition
Fee Structure
Front-end load Back-end load (contingent), (redemption fee)
DirectPlus
Fully automated trade execution system Execution time < ½ second
Functional Organizational Structure
Functional Organizational Structure A functional organizational structure is centered on job functions, such as marketing, research and development and finance. Small companies should use a functional organization when they want to arrange their organizational structure by department. For example, a small company may have a director, two managers and two analysts in the marketing department. The director would likely report to the Chief Executive Officer, or CEO, and both managers would report to the director. In addition, each manager may have an analyst reporting to them. A functional organizational structure works well when small companies are heavily project-focused. Directors can assign certain projects to managers, who can then divvy up tasks with their analysts. The department can then more effectively meet their project deadlines.
Federal Reserve
Functions include: conducting bank examinations, handling the the govn't central banking function, determining whether banks can borrow money from the govn't.
secured transaction
Generally, a secured transaction is a loan or a credit transaction in which the lender acquires a security interest in collateral owned by the borrower and is entitled to foreclose on or repossess the collateral in the event of the borrower's default. The terms of the relationship are governed by a contract, or security agreement. A common example would be a consumer who purchases a car on credit. If the consumer fails to make the payments on time, the lender will take the car and resell it, applying the proceeds of the sale toward the loan. Mortgages and deeds of trust are another example. In the United States, secured transactions in personal property (that is, anything other than real property) are governed by Article 9 of the Uniform Commercial Code (U.C.C.).
Merchandise
Goods that a merchandising business purchases to sell
real property
In English common law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it have been made by human efforts: buildings, machinery, wells, dams, ponds, mines, canals, roads, etc. Real property and personal property are the two main subunits of property in English Common Law.
Trusts
In common law legal systems, a trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a settlor, who transfers some or all of his or her property to a trustee. The trustee holds that property for the trust's beneficiaries. Trusts have existed since Roman times and have become one of the most important innovations in property law.[1]
Conspiracy
In criminal law, a conspiracy is an agreement between two or more persons to commit a crime at some time in the future.
Partnership
In a Partnership, two or more people share ownership of a single business. Like proprietorships, the law does not distinguish between the business and its owners. The Partners should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be resolved, how future partners will be admitted to the partnership, how partners can be bought out, or what steps will be taken to dissolve the partnership when needed; Yes, its hard to think about a "break-up" when the business is just getting started, but many partnerships split up at crisis times and unless there is a defined process, there will be even greater problems. They also must decide up front how much time and capital each will contribute, etc. Advantages of a Partnership • Partnerships are relatively easy to establish; however time should be invested in developing the partnership agreement. • With more than one owner, the ability to raise funds may be increased. • The profits from the business flow directly through to the partners' personal tax return. • Prospective employees may be attracted to the business if given the incentive to become a partner. • The business usually will benefit from partners who have complementary skills. Disadvantages of a Partnership • Partners are jointly and individually liable for the actions of the other partners. • Profits must be shared with others. • Since decisions are shared, disagreements can occur. • Some employee benefits are not deductible from business income on tax returns. • The partnership may have a limited life; it may end upon the withdrawal or death of a partner. Types of Partnerships that should be considered: 1. General Partnership Partners divide responsibility for management and liability, as well as the shares of profit or loss according to their internal agreement. Equal shares are assumed unless there is a written agreement that states differently. 2. Limited Partnership and Partnership with limited liability "Limited" means that most of the partners have limited liability (to the extent of their investment) as well as limited input regarding management decision, which generally encourages investors for short term projects, or for investing in capital assets. This form of ownership is not often used for operating retail or service businesses. Forming a limited partnership is more complex and formal than that of a general partnership. 3. Joint Venture Acts like a general partnership, but is clearly for a limited period of time or a single project. If the partners in a joint venture repeat the activity, they will be recognized as an ongoing partnership and will have to file as such, and distribute accumulated partnership assets upon dissolution of the entity.
Functional Structure
In a functional structure, people with similar occupational specialties are put together in formal groups. This is a quite commonplace structure, seen in all kinds of organizations, for-profit and nonprofit.
Matrix Structure
In a matrix structure, an organization combines functional and divisional chains of command in a grid so that there are two command structures—vertical and horizontal. The functional structure usually doesn't change—it is the organization's normal departments or divisions, such as Finance, Marketing, Production, and Research & Development. The divisional structure may vary—as by product, brand, customer, or geographic region.
prepayment clause
In a mortgage loan agreement, this would enable the borrower to pay off the principal balance of the loan without paying a penalty.
Team-Based Structure
In a team-based structure, teams or workgroups, either temporary or permanent, are used to improve horizontal relations and solve problems throughout the organization.56 When managers from different functional divisions are brought together in teams—known as cross-functional teams—to solve particular problems, the barriers between the divisions break down. The focus on narrow divisional interests yields to a common interest in solving the problems that brought them together. Yet team members still have their full-time functional work responsibilities and still formally report to their own managers above them in the functional-division hierarchy.
Implied warranty
In common law jurisdictions, an implied warranty is a contract law term for certain assurances that are presumed to be made in the sale of products or real property, due to the circumstances of the sale. These assurances are characterized as warranties irrespective of whether the seller has expressly promised them orally or in writing. They include an implied warranty of fitness for a particular purpose, an implied warranty of merchantability for products, implied warranty of workmanlike quality for services, and an implied warranty of habitability for a home.
Contract
In common law legal systems, a contract (or informally known as an agreement in some jurisdictions) is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them. The elements of a contract are "offer" and "acceptance" by "competent persons" having legal capacity who exchange "consideration" to create "mutuality of obligation."[1]
Integrity
In ethics, integrity is regarded by many people as the honesty and truthfulness or accuracy of one's actions. Integrity can stand in opposition to hypocrisy,[2] in that judging with the standards of integrity involves regarding internal consistency as a virtue, and suggests that parties holding within themselves apparently conflicting values should account for the discrepancy or alter their beliefs.
Child support
In family law and public policy, child support (or child maintenance) is an ongoing, periodic payment made by a parent for the financial benefit of a child following the end of a marriage or other relationship. Child maintenance is paid directly or indirectly by an obligor to an obligee for the care and support of children of a relationship that has been terminated, or in some cases never existed. Often the obligor is a non-custodial parent. The obligee is typically a custodial parent, a caregiver, a guardian, or the state. Depending on the jurisdiction, a custodial parent may pay child support to a non-custodial parent. Typically one has the same duty to pay child support irrespective of sex, so a mother is required to pay support to a father just as a father must pay a mother. Where there is joint custody, the child is considered to have two custodial parents and no non-custodial parents, and a custodial parent with a higher income (obligor) may be required to pay the other custodial parent (obligee).
Liabilities
In general, debts owed by individuals or firms. In the case of commercial banks, their liabilities are largely in the form of what they owe their customers, that is, the total amount of deposits held
Undue Influence
In jurisprudence, undue influence is an equitable doctrine that involves one person taking advantage of a position of power over another person. influence by which a person is induced to act otherwise than by their own free will or without adequate attention to the consequences.
Strict liability
In law, strict liability is a standard for liability which may exist in either a criminal or civil context. A rule specifying strict liability makes a person legally responsible for the damage and loss caused by her or his acts and omissions regardless of culpability (including fault in criminal law terms, typically the presence of mens rea). Strict liability is prominent in tort law (especially product liability), corporations law, and criminal law. For analysis of the pros and cons of strict liability as applied to product liability, the most important strict liability regime, see product liability.
Offer & Acceptance
In order for a contract to be formed, the parties must reach mutual assent (also called a meeting of the minds). This is typically reached through offer and an acceptance which does not vary the offer's terms, which is known as the "mirror image rule". If a purported acceptance does vary the terms of an offer, it is not an acceptance but a counteroffer and, therefore, simultaneously a rejection of the original offer. The Uniform Commercial Code disposes of the mirror image rule in §2-207, although the UCC only governs transactions in goods in the USA. As a court cannot read minds, the intent of the parties is interpreted objectively from the perspective of a reasonable person,[9] as determined in the early English case of Smith v Hughes [1871]. It is important to note that where an offer specifies a particular mode of acceptance, only an acceptance communicated via that method will be valid.[10]
Crime
In ordinary language, the term crime denotes an unlawful act punishable by a state
title search
In real estate business and law, a title search or property title search is the process of retrieving documents evidencing events in the history of a piece of real property, to determine relevant interests in and regulations concerning that property.
Entry
Information for each transaction recorded in a journal
IPO
Initial Public Offering. First time a firm sells stock to the public.
OEIC
Initial charge Annual management charge
Market failure
Instances of a free market being unable to achieve an optimum allocation of resources
personal injury protection
Insurance coverage that covers medical expenses, although it depends based on plan/provider, usually it covers most medical costs, hospital costs, Income continuation, lost wages and funeral costs.
coinsurance clause
Insurance policy stipulation that a building must be insured for at least a certain percentage (usually 80 percent) of its insurable value (appraised or market value of the property less value of land) in order to collect the full amount of a partial-loss claim on it.
discount rate
Interest rate that the Federal Reserve charges for short-term loans to member banks.
federal funds rate
Interest rate that the Federal Reserve suggests that member banks charge each other on short-term borrowing.
Which of the following I voted in the 1990
Interstate banking was allowed
IAR
Investment Advisory Representative. Responsibility is to provide investment related advice to clients for a fee.
Private equity
Investments in companies not traded on stock exchange
income
Investments, loan payments, and fees for services are all considered sources of _____ for banks.
Bond/Note Tax
Investors are federally taxed on capital gains and interest income, but interest income is exempt from state and local taxes.
Risk Allocation
Investors can choose desired risk level
4th Market
Investors trading directly with other investors, originally developed for institutional trading. Trading now on ECNs, technological developments leading to individual investors trading directly
IB Arrangements (Competitive Bid)
Issuer structures the offering and secures bids
IB Arrangements (Negotiated)
Issuing firm negotiates terms with investment banker
Law
Law is, generally, a system of rules which are enforced through social institutions to govern behaviour.[2] Laws can be made by legislatures through legislation (resulting in statutes), the executive through decrees and regulations, or judges through binding precedents (normally in common law jurisdictions).
blank endorsement
Least secure type of endorsement b/c it carries only the signature of the endorser and does not specify in whose favor it is made. Thus, it can be claimed by any party.
Proximate Cause
Legal cause; exists when the connection between an act and an injury is strong enough to justify imposing liability.
lien
Legal claim a lender has on property to secure a debt.
Copyright
Legal right to exclusive publication, production, sale, or distribution of a literacy or artistic work
OEIC
Legal structure - Limited company
Investment Trust
Legal structure - Plc
whole life insurance
Life insurance policy that remains in force for the insured's whole life. Advantage = cash values can build up that policy holders can borrow against later.
open-end loans
Line of credit that allows you to borrow money when you need it and leaves you with available funds when you don't. With these, the longer you use the money, the more you pay.
Mutual Fund
Managed Investment Companies: Managed, usually changing composition portfolio. -The fund's board of directors typically hires an investment advisor to select and manage the fund assets according to some specific goal(s) set by the board and any regulatory requirements.
OEIC
Management of assets - Authorised Corporate Director (ACD) who must be authorised by the FCA
Unit Trust
Management of assets - Fund Manager who must be authorised by the FCA
Margin Trading
Margin Call How far can the stock price fall before a margin call? (MMR = 40%)
Firms maximize profit when
Marginal revenue=marginal cost
Check
Negotiable Instrument commonly written by an entity to pay for large goods.
Deceptive Service Estimates
Overcharging for services rendered
Common stock (equity)
Ownership stake in entity, residual cash flow
Commingled funds
Partnerships of investors that pool their funds. Designed for trusts or larger retirement accounts to get professional management for a fee. Operates similar to a mutual fund.
Wage
Pay by the hour
sponsor
People wanting to sell stocks and bonds must have a _____ before they can take licensing exams.
Entrepreneurs
People who own, operate, an take the risk of a business venture
Freelances
People who provide services to businesses on an hourly basis or by the job
Real accounts
Permanent accounts
donor
Person who creates a trust.
Personal property
Personal property is generally considered property that is movable
Officers
Persons appointed by Board of Directors to manage day-to-day operations of corporation
Placing an order
Place a market order to buy 1 round lot of AMD with your broker. Broker electronically submits the order to the floor of the NYSE. Commission broker takes/sends order to specialist post. May trade with another broker or with specialist.
integrated pension plan
Plan that is tied to a person's payments into Social Security. This amount will be used in calculating the total benefit that the individual will receive upon retirement.
Accounting
Planning, recording, analyzing and interpreting financial information
Accounting
Planning, recording, analyzing, and interpreting financial information.
Tax Treatment
Preferred & common dividends are not tax deductible to the issuing firm Corporate tax exclusion on 70% dividends earned
non-cumulative preferred stock
Preferred stock for which unpaid dividends do not accrue.
cumulative preferred stock
Preferred stock on which dividends accrue in the event that the issuer does not make timely dividend payments. Most preferred stock is this kind.
convertible preferred stock
Preferred stock that can be converted into a specified amount of common stock at the holder's option.
Product Organizational Structure
Product Organizational Structure A product organizational structure has managers reporting to the president or head of the company by product type. Product organizational structures are primarily used by retail companies that have stores in various cities. However, stores in each city may still need a local human resources or marketing department to carry out functions locally. For example, a small department store company may have a vice president of sporting goods, housewares and general merchandise at the corporate office. One manager may report to each vice president. However, each manager may oversee the work of one or more field marketing employees who travel and handle local marketing stores in several states. These field marketing employees may work for the sporting goods manager one week in League City, Texas, then do merchandising for the housewares manager another week in the Sugarland, Texas, market.
Gross profit
Profit before operating expenses are deducted
Members of the exchange
Purchase a seat on the exchange, gives the right to trade and a say in the governance of the exchange.
uninsured/underinsured motorist coverage
Purpose of this type of insurance is to compensate another driver when the insured did not purchase enough liability insurance to cover medical expense or losses to another's property.
Reliance Interest
Puts the injured party in the position he would have been in had the parties never entered into a contract. focuses on the time and money that the injured spent performing his part of agreement. If there is no valid contract court may reward reliance damages under promissory damages.
Quality Assurance
Quality Assurance (QA) is a way of preventing mistakes or defects in manufactured products and avoiding problems when delivering solutions or services to customers. QA is applied to physical products in pre-production to verify what will be made meets specifications and requirements, and during manufacturing production runs by validating lot samples meet specified quality controls. QA is also applied to software to verify that features and functionality meet business objectives, and that code is relatively bug free prior to shipping or releasing new software products and versions.
Equilibrium
Quantity supplied meets quantity demanded. Disequilibrium- Not in a state of equilibrium
price-to-earnings ratio
Ratios that relate a stock's price to the firm's profits, thus allowing investors to evaluate stock prices.
false
T/F? The National Banking Act of 1864 spelled the end of state banking systems in the US.
currency risk
Risk posed by variations in exchange rates between countries.
systemic risk
Risk to the entire financial system rather than to individual firms or investors.
Channels of distribution
Routes that product and services take from the time they are produced to the time they are consumed
Commission-based salary
Salary that varies from month to month, depending on how much of a product was sold
Series EE Bond
Savings Bond issued at a discount from par par with a fixed rate of interest, set at the time of purchase. All interest on the bonds is calculated semi-annually, but paid at maturity and exempt from state and local taxes. Accrues interest monthly, compound interest semiannually.
SIMPLE IRA
Savings Incentive Match Plan for Employees A retirement plan sponsored by companies with fewer than 100 employees; though it may be structured as a 401(K), it avoids some of the administrative fees and paperwork of those plans.
time deposit
Savings account or CD held in a financial institution, usually a bank, for a fixed term or with the understanding that the customer can withdraw only by giving advanced notice. Ex: savings account, money market account, certificate of deposit.
Series E Bond
Savings bonds issued by the United States government between 1941 and 1979. Any interest that is accrued on these bonds is exempt from state and federal taxes. Accrues interest monthly, compound interest semiannually.
OEIC
Scope of powers of investment - As defined in prospectus
Short position
Sell first and then buy later Bearish
OEIC
Shares with no beneficial interest in the underlying assets
Investment Trust
Shares. Different classes of shares issued by split capital investment trusts
Production Possibilities Curve
Shows the maximum level of efficiency based on what resources are allocated where
REITs
Similar to closed end fund. Invest in real estate and real estate loans. Equity trusts purchase real estate. Mortgage trusts invest in mortgage and construction loans.
OEIC
Single pricing which reflects the underlying value of the scheme assets
collateral
Something of value given by a borrower to a lender to back up the borrower's promise to repay the loan.
Endorsement in full
Special endorsement
Statutory law
Statutory law or statute law is written law (as opposed to oral or customary law) set down by a legislature (as opposed to regulatory law promulgated by the executive or common law of the judiciary) or by a legislator (in the case of an absolute monarchy).
OEIC
Stock exchange listing - optional
Investment Trust
Stock exchange listing - required
Inventories
Stocks of goods in the hands of producers These stocks are included in the definition of capital and an increase in inventories is considered to be investment
Potential Reforms
Strict ___4pm cutoff__________ with late orders executed the following trading day _____fair value pricing___________ with net asset values being adjusted for trading in open markets Imposition of _________redemption fees on holdings <1 week_________________________
Monopoly
Strictly defined as a market situation in which there is a single supplier of a good or service, but often used to suggest any situation in which a firm has considerable power over market price
OEIC
Structural framework provided by Treasury regulations (ICVC) OEIC authorised by the FCA ACD and depositary authorised by the FCA
Unit Trust
Supervision - Trustee
Exhibit
Supporting schedule
Supplementary report
Supporting schedule
Portability
Surviving spouse's right to carry over the unused portion of a predeceased spouse's estate or gift tax exemption and combine it with his or her own exemptions at death.
true
T/F? A balloon payment is a single large payment due at the end of a loan.
false
T/F? A bank may not use excess reserves to give depositors their money back if they demand it.
false
T/F? A borrower cannot use mortgaged property until the debt is paid in full.
false
T/F? A capital investment is more liquid than stocks or bonds.
false
T/F? A check is an example bank currency.
false
T/F? A check is an example of bank currency.
false
T/F? A check must be written on paper in order to be legal.
true
T/F? A creditor may not use receipt of public assistance as a factor in determining creditworthiness.
false
T/F? A dollar bill represents an obligation of the govn't to provide a commodity of value to you.
true
T/F? A larger down payment on a home lowers the cost of the monthly payment.
false
T/F? A loan company is not a financial intermediary b/c it does not receive deposits.
true
T/F? A mortgage is the longest/largest debt most people will ever incur.
false
T/F? A shared application mortgage is another form of consumer loan tied to the appreciated value of a property.
true
T/F? A transaction account allows transactions to occur at any time and in any number.
true
T/F? A trust is an arrangement by which one party holds property on behalf of another property for certain defined purposes.
true
T/F? Almost no business can exist without financing debt.
true
T/F? An increase in money supply and incomes often causes prices to go up as well.
true
T/F? Banks are free to change governing doc., but they must give customers written notice of changes.
false
T/F? Banks are nonprofit organizations.
true
T/F? Banks can loan customers the money it has on deposit, minus the reserve requirement.
false
T/F? Basic checking accounts pay interest on the balance deposited in the account.
true
T/F? Check use in the US is beginning to decline.
true
T/F? Consumers are advised not to leave spaces on checks.
false
T/F? Consumers should always have their SSN printed on checks to aid identification.
false
T/F? Generally speaking, banks offer customers fewer services today than they did 20 years ago.
false
T/F? If a credit applicant has opened many new accounts recently, that is a sign that the applicant is very creditworthy.
true
T/F? Interest on home-equity loans is tax-deductible for consumers.
false
T/F? Interest rates are usually lower for fixed rate mortgages than for other types.
true
T/F? It is more difficult for lenders to evaluate business loan applications than it is consumer loan applications.
false
T/F? MZM is sometimes referred to as the "base" money supply.
true
T/F? Money doesn't just mean currency, but also checks, ledger transfers, and even credit.
true
T/F? Money is a medium of exchange for people to use to trade things of value.
true
T/F? Probate is a court proceeding that settles an estate's final debts and formally passes legal title to property from the decedent to his or her heirs.
true
T/F? Qualifying veterans may get govn't-backed mortgage loans with low down payments through the Dept. of Veteran's Affairs.
true
T/F? Subprime rates are higher-than-normal interest rates offered to a less-than-perfect credit applicant.
true
T/F? The Gramm-Leach-Bliley Act requires that financial institutions protect the privacy of consumers.
Migrant & Seasonal Agricultural Workers
The Migrant and Seasonal Agricultural Worker Protection Act (MSPA) regulates the hiring and employment activities of agricultural employers, farm labor contractors, and associations using migrant and seasonal agricultural workers. The Act prescribes wage protections, housing and transportation safety standards, farm labor contractor registration requirements, and disclosure requirements. The Wage and Hour Division administers this law. The Fair Labor Standards Act (FLSA) exempts agricultural workers from overtime premium pay, but requires the payment of the minimum wage to workers employed on larger farms (farms employing more than approximately seven full-time workers. The Act has special child-labor regulations that apply to agricultural employment; children under 16 are forbidden to work during school hours and in certain jobs deemed too dangerous. Children employed on their families' farms are exempt from these regulations. The Wage and Hour Division administers this law. OSHA also has special safety and health standards that may apply to agricultural operations. The Immigration and Nationality Act (INA) requires employers who want to use foreign temporary workers on H-2A visas to get a labor certificate from the Employment and Training Administration certifying that there are not sufficient, able, willing and qualified U.S. workers available to do the work. The labor standards protections of the H-2A program are enforced by The Wage and Hour Division.
Consumer Protection Agencies
The U.S. Consumer Products Safety Commission is an independent federal agency whose main purpose is to reduce injuries to consumers. The Commission issues consumer product safety alerts, and may have helpful information relative to your claim. The Occupational Safety and Health Administration (OSHA) publishes numerous regulations and pamphlets on workplace safety and health standards, the use of industrial substances, and safety in industrial and construction operations. See OSHA FAQs to learn more. The Environmental Protection Agency, which has the authority for air, water and pesticide standards, issues many publications on such topics. See Key Federal Environmental Laws to learn more. The U.S. Food and Drug Administration establishes the standards for food, drugs, medical devices and cosmetics, and also has information on drug ingredients and food and drug manufacturing methods. See Food Recalls and Why Drugs Get Pulled from the Market to learn more. The National Highway Traffic Safety Administration develops and issues safety standards for all new cars, conducts research on accident prevention, investigates motor vehicle defects and enforces notification of defects to owners of record. Numerous publications are produced by the Administration for consumers and their lawyers. See Car Safety Recalls to learn more. The Federal Highway Administration is concerned with improving highway safety and conducts highway safety research relating to trucks and buses. The Transportation Research Board will conduct a computerized search and furnish abstracts of all engineering articles pertaining to highway topics. State police or highway patrols might also be able to provide information on regulations concerning the use and equipment of motor vehicles. Most state fire marshals issue fire safety standards and basic building design and construction standards. The United States Coast Guard sets standards, makes factory inspections and conducts investigations of consumer complaints of defective boats. The Coast Guard notifies boat owners when defects are found.
Fiscal period
The length of time for which a business summarizes and reports financial information
M1
The narrowest definition of the money supply. Includes currency, travelers' checks, and balances in checking accounts.
Amortization
The spreading of the cost of an intangible asset over its useful life.
The statute of frauds
The statute of frauds refers to the requirement that certain kinds of contracts be memorialized in a writing, signed by the party to be charged, with sufficient content to evidence the contract. Traditionally, the statute of frauds requires a signed writing in the following circumstances: Contracts in consideration of marriage. This provision covers prenuptial agreements. Contracts that cannot be performed within one year. However, contracts of indefinite duration do not fall under the statute of frauds regardless of how long the performance actually takes. Contracts for the transfer of an interest in land. This applies not only to a contract to sell land but also to any other contract in which land or an interest in it is disposed, such as the grant of a mortgage or an easement. Contracts by the executor of a will to pay a debt of the estate with his own money. Contracts for the sale of goods totaling $500 or more. Contracts in which one party becomes a surety (acts as guarantor) for another party's debt or other obligation. This can be remembered by using the mnemonic "MY LEGS": Marriage, contracts for more than one Year, Land, Executor (or Estate), Goods ($500 or more), Surety.
Human capital
The stock of knowledge and acquired skills embodied in individuals
Courts of Special Jurisdiction
These courts are set up just to hear specific types of cases. The federal system has bankruptcy and tax courts, most state systems have probate, which handles wills; family court, which oversees divorce, custody, and other related proceedings, and several others. Many of these courts have simplified rules of evidence or procedure designed to speed the process, and many of the judges, lawyers, and administrative staff have training and experience in that particular area of law.
National Currency Act of 1863
This act established standards for currency, taxed state bank notes, and made the printing of state bank notes unprofitable.
Health Insurance Portability and Accountability Act
This act permits employees to take their health insurance eligibility with them when they change jobs.
Emergency Banking Act of 1933
This act separated commercial banking from investment banking to protect assets.
Securities and Exchange Commission
This board is composed of 9 commissioners, selected by the Federal Reserve Bank chairman, and approved by the US House of Representatives.
sum-of-digits method
This finance charge method takes the total finance charge, divides it by the # of months in the loan term, and assigns a higher ratio of interest to the early payments.
Civil War
This in America brought monetary issues to a crisis point b/c rampant inflation threatened the entire economic system.
major medical
This insurance is intended to cover the costs of surgery, hospitalization, and other large expenses arising from injuries and lengthy illnesses.
decreasing term
This type of life insurance policy is unique b/c the death benefits decrease on a scheduled basis. Most commonly used to cover a mortgage or other type of loan.
Absolute liability
To be convicted of an ordinary crime, in certain jurisdictions, a person must not only have committed a criminal action, but also have had a deliberate intention or guilty mind (mens rea). In a crime of strict liability (criminal) or absolute liability, a person could be guilty even if there was no intention to commit a crime. The difference between strict and absolute liability is whether the defence of a mistake of fact is available: in a crime of absolute liability, a mistake of fact is not a defence. Strict or Absolute Liability- also can arise from inherently dangerous activities or defective products that are likely to result in a harm to another, regardless of protection taken. Negligence is not required to be proven. Example: Owning a pet rattle snake.
Net investment
Total investment during some accounting period minus the amount of depreciation during the same period
Trade Barriers
Trade barriers are usually protectionist; that is, they are erected to protect domestic producers who would not be able to compete successfully with foreign producers in a free market or in free trade.
Roth IRA
Type of IRA where taxes are paid on contributions, but withdrawals are not taxed at all. Does not require you to start making withdrawals at a certain age, and allows an individual to make a qualified withdrawal up to $10,000 for a first time home purchase.
construction loan
Type of short-term business loan meant to cover the cost of land development and building construction. Often packaged w/ a real estate loan.
The type of savings account that claims a food rate of return low minimum deposit and the fact that it is free from local state taxes ad benefits is a
U.s. Savings bond
Charitable deduction
Under tax law, a contribution to a qualified charity or other tax exempt institution for which a taxpayer may claim an income tax deduction. Also applicable to trusts.
Capital goods
Unlike goods intended to be consumed, capital goods are used to produce other goods Machinery in a factory would be an example of capital goods
independent contractor agents
Used by some insurance companies to sell their products. These agents are usually compensated through commissions rather than salary.
fidelity bonds
Used to protect the firm against dishonesty of employees/agents. Covers various forms of losses, including fraudulent trading, theft and forgery.
Capital
Usually used in the "real" sense in economics to refer to machinery and equipment, structures and inventories, that is, produced goods for use in further production Distinguished from "financial capital", meaning funds which are available to finance the production or acquisition of real capital
Usury
Usury is the practice of making unethical or immoral monetary loans intended to unfairly enrich the lender. A loan may be considered usurious because of excessive or abusive interest rates or other factors, but according to some dictionaries, simply charging any interest at all can be considered usury.[3][4][5] Someone who practices usury can be called a usurer, but the more common term in English is loan shark.
True Indexes
VW and EW are often considered this because they measure value today with value at a prior point in time.
Fair Debt Collection Practices Act
Which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you. It covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. Does not cover debts you incurred to run a business.
White Collar Crime
White-collar crime refers to financially motivated nonviolent crime committed by business and government professionals.[1] Within criminology, it was first defined by sociologist Edwin Sutherland in 1939 as "a crime committed by a person of respectability and high social status in the course of his occupation." Typical white-collar crimes include fraud, bribery, Ponzi schemes, insider trading, embezzlement, cybercrime, copyright infringement, money laundering, identity theft, and forgery.
discount loan
With this type of loan, borrowers receive less than the full amount of the loan and repay the full amount at maturity.
fixed rate mortgage
With this type of mortgage, payments on the loan, the interest rate, and terms all remain constant for the entirety of the loan.
Internet
Worldwide computer network that allows people to communicate with each other electronically
no
Would a business probably finance increasing their inventory using a term loan?
Opening an acocunt
Writing an account title and number on the heading of an account
Trade improvement from trading with another broker:
You place a buy market order when limit inside quotes are Bid $20.00, Ask $20.10 Your buy market order will be executed at ___20.10___ against the book. A sell market order would execute at _20______ against the book. In an auction market, if two brokers arrive at the same time both may get price improvement by negotiating a trade at __20.05_____.
capacity
a borrower's ability to repay a debt as judged by lenders or the legal ability to enter into a binding agreement
character
a borrower's reputation for fair and ethical practices, including business experience, dealings with other businesses, and reputations in the community
payroll card
a card where banks can facilitate salary payments between employers and employees
customer profile
a complete picture of a venture's prospective customers, including geographic, demographic, and psychographic data
ROCA score
a composite score of performance in risk management, operational controls, compliance, and asset quality
barriers to entry
a condition or circumstance that makes it difficult or costly for outside firms to enter a market to compete with established firm or firms
charge cards
a consumer purchases but must pay the account in full at the end of the month
captive borrower
a consumer with a weak credit history that can easily get a loan
Accumulated amortization
a contra asset account to intangible assets. This account shows the total amortization taken on the intangible assets.
Express Contract
a contract in which all elements are specifically stated (offer, acceptance, consideration), and the terms are stated, as compared to an "implied" contract in which the existence of the contract is assumed by the circumstances.
creditworthy
a customer that has a good credit rating, sufficient collateral for loans, and an ongoing income source sufficient to make timely loan payments.
diversification growth strategy
a growth strategy that involves investing in products or businesses that are different from a company's own products, using synergistic, horizontal, or conglomerate diversification
Injunction
a judicial remedy issued in order to prohibit a party from doing or continuing to do a certain activity
lien
a legal claim to the property to secure the debt
copyright
a legal device that protects original works of authors, including books, movies, musical compositions, and computer software, for the life of the author plus 70 years
bill of exchange
a negotiable and unconditional written order, such as a check, draft, or trade agreement, addressed by one party to another
silent partner
a partner (who usually provides capital) whose association with the enterprise is not public knowledge
bribe
a payment made to secure special services for a business or special consideration for it's products; illegal in the US
employee stock option plan (ESOP)
a source of financing in which a company gives its employees the opportunity to buy a portion of the business; to raise money with and ESOP, a business must have at least 25 employees and revenues of $5 million
confidentiality notice
a statement sent along with an electronic message that says that the message is only for the eyes of the intended recipient
bulletin board service (BBS)
a web-based service that allows users to leave and access messages and access other electronic files
check
a written order from a depositor telling the bank to pay a stated amount of cash to the person or business named on the check
negotiable instrument
a written order or promise to pay a sum of money, either to a specified party or to the person who holds it
promissory note
a written promise to pay at a fixed or determinable future time a sum of money to a specified individual
holder in due course
a written, signed unconditional promise or order to pay a fixed amount on demand or at a defined time to ""
Characteristics of well-functioning markets
a) Low cost transfer of funds (competition among market makers and brokers). b) Adequate trading activity to ensure purchases and sales occur in timely fashion without affecting price. (Trading volume) C) Prices speedily reflect public information
balance sheet with assets on the left and owners equity and liabilities on the right is what form
account
conservatism
accounting for a business is fair and reasonable
currency
all media of exchange circulating in a country
Market timing:
allowing investors to buy or sell on stale net asset values International: fund NAV may be based on prices in foreign markets which close at different times.
entrepreneur
an individual who undertakes the creation, organization, and ownership of a business
direct insurance writer
an insurance agent who works for one particular insurance company, such as life and automobile companies
double opt-in list
an online opt-in mailing list with a two-step confirmation process subscribers must confirm their registration by responding to an email message
note
an unconditional written promise to pay another party the amount owed either when demanded or at a certain specified date, usually with interest at a specified rate
Taxable distribution
any distribution of income or principal from a trust to a skip person that is not a taxable termination or direct skip.
benefits
any extra compensation that workers receive on a job, such as paid vacation and sick days, flextime, and child care
Leasehold improvements
any physical alterations made by the lessee to the leased property when these benefits are expected to last beyond the current accounting period
Taxable termination
any termination of an interest in property held in trust
source document
any written/printed evidence of a business transaction that describes essential facts of that transaction
asset
anything of value that a business owns, such as cash, equipment, or a building
adjustable rate mortgages (ARMs)
are those with rates that change over the course of a loan
Interest receivable
arises when a company has earned but not collected interest by the balance sheet date. Usually, the amount is not due until later
OEIC
assets are held by an independent depositary;
Long-term assets
assets that a business has on hand or uses for a relatively long time. Examples include property, plant, and equipment; long-term investments; and intangible assets
Property, plant, and equipment
assets with useful lives of more than one year; a company acquires them for use in the business rather than for resale.
Accrued assets
assets, such as interest receivable or accounts receivable, that have not been recorded by the end of an accounting period
Single proprietorship
business led by 1 person
wholesaler
business that sells to the retailer
Law of Demand
buyers purchase more at lower prices than higher prices
merchandising business
buys goods such as books, clothing or furniture and then sells those goods for profit
number on the balance sheet
capital is equal to what after closing entries
District reserve bank
carry out banking functions for government offices in their area, examine member banks in their district, decide whether to loan bank funds, recommend interest rates, and implement policy decisions of the board of governors
financing activities
cash effects of transactions and other events involving creditors and owners
current asset
cash or any other item that can be converted to cash quickly and used by a business within a year
Certificates of deposit
certificates issued by banks that guarantee the payment of a fixed interest rate until the maturity date
Statement of retrained earnings
change in retained earnings between the beginning and end of a period
Legal Value
change in the legal position of a party as a result of a contract
identification numbers
check number, bank number, and account number
outstanding checks
checks that have been written but not deposited
Equity
claim to, or interest in, an asset
account
classify and summarize the similarities, differences, and balances in assets, liability, stockholders equity, dividend, revenue, and expenses
electronic badge readers
computer technology where each employee's time card has a magnetic strip on which is encoded certain employee information
adverse selection
concept that the borrowers who are most willing to accept a high interest rate are the same borrowers who are most likely to default on their loans
Deferred items
consist of adjusting entries involving data previously recorded in accounts
signature card
contains the signatures of the pesrons authorized to write checks on the bank account
Equally weighted returns
each company's returns are weighted equally.
quarterly
each employer must file a federal tax return showing the federal income tax and social security and medicare taxes due to the government
assets
economic resources owned by a company that are expected to benefit future business periods.
cost effective
economically worthwhile in terms of what is achieved for the amount of money spent
B2B exchanges
electronic forums where businesses trade goods and services
the month following each calendar quarter
employers must pay unemployment taxes
electronic funds transfer system
enables banks to transfer funds from the account of one depositor to the account of another quickly and accurately without the immediate exchange of checks
Federal Deposit Insurance Corporation (FDIC)
guarantees deposits against bank failures up to $100,000 per depositor, per bank and sometimes even more for special kinds of accounts or ownership categories.
Cash equivalent
highly liquid, short-term investments acquired with temporarily idle cash and easily convertible into a known cash amount
addition error
if trial balance doesn't equal by 1
income statement
inancial statement that reflects company's profitability for a stated period of time
liquidity
is a measure of how quickly things can be converted to something of value like cash
money supply
is defined as the liquid assets held by banks and individuals
subsidiary ledger
ledger, or book, that is summarized in a controlling account in the general ledger
charter
legal approval to operate a business as a bank
Accrued liability
liabilities not yet recorded at the end of an accounting period. They represent obligations to make payments not legally due at the balance sheet date, such as employee salaries.
A UIT typically issues redeemable securities (or units)
like a mutual fund which means that the UIT will buy back an investor's units, at the invest's request, at their approximate net asset value (or NAV).
Federal open Market Committee (FOMC)
makes discount rate decisions
blank endorsement
signature of the holder
Equal Credit Opportunity Act
prohibit the use of race, color, religion, national origin, marital status, age, receipt or public assistance, or exercise of any consumer right against a lender as a factor in determining creditworthiness
Public Domain
property rights that belong to the community at large, are unprotected by copyright or patent, and are subject to use by anyone
whistleblower laws
protect people who report illegal conduct by a co-worker, employer, or other person or company.
Fair Debt Collection Practices Act
protects customers from unfair collection techniques
prime rate
rate that the banks charge their best and most reliable customers
payee
receiver of the funds
cash basis of accounting
recognizes revenues when cash is received and recognizes expenses when cash is paid out
accrual basis of accounting
recognizes revenues when sales are made or services are performed, regardless of when cash is received
balance of payments
record of all of the exchanges of goods and services that occur between two countries
time card
record of the time an employee arrives at work each time, the time the employee leaves, and the total number of hours worked each day
T-account
recording the increases and decreases in an account. (it looks like a T) the name of the account is at the top of the T. increases appear on one side of the T, decreases on the other.
endorsing
signing your name on the back of the check
realization of revenue
revenue earned
interest expense credit
reversing entry for accrued interest expense
income from interest gets debited and interest recieveable gets credited
reversing entry for accrued interest income
market risk
risk that investment will decrease in price as market conditions can change
Private placement
sale to a limited number of sophisticated investors not requiring the protection of registration - allowed under SEC RULE 144A - Dominated by institutions - Very active market for debt securities - Not active for stock offerings
DeFacto
segregation that exists by practice and custom
DeJure
segregation that is mandated by law and imposed by the government
accounts receivable subsidiary ledger
separate ledger that contains accounts for all charge customers
overtime rate
set by the Fair Labor Standards Act, is 1 and 1/2 times the employee's regular rate
credit terms
set out the time allowed for payment (total amount of sale/amount of time)
debit memo
shows the price deduction taken by a customer for a return and allowance
enterprise zones
specially designated areas of a community that provide tax benefits to new businesses locating there; communities may also provide grants for new product development
margin
stocks bought for a fraction of their price, then resold for profit without the full purchase price of the stock ever being paid
form w-2
summarizes an employee's earnings and tax deductions for the previous calendar year
form w-3
summarizes the information contained on the employee's form w-2
amount available during the fiscal period
supplies in debit column of trial balance
A UIT will have a termination date ( a date when the UIT will terminate and dissolve)
that is established when the UIT is created (although some may terminate more than fifty years after they are created). In the case of a UIT investing in bonds, for example, the termination date may be determined by the maturity date of the bond investments.
domain name extension
the letters contained in each URL that tells the user what type of organization uses the address, such as commercial (.com), education (.edu), or governmental (.gov)
direct channel
the means of delivering a service or product directly to the customer, such as via a Web site
brand
the name, symbol, or design used to identify a product
business organization
the ownership structure of a company or firm
advertising
the paid nonpersonal presentation of ideas, goods, or services directed at a mass audience by an identified sponsor by means of print and broadcast
break-even point
the point at which the gain from an economic activity equals the costs involved in pursuing it
federal funds rate
the rate at which banks borrow from each other
Return on assets (ROA)
the ratio of net income to total assets
B2C e-commerce
ventures where businesses sell directly to consumers
withholdings
wage payroll period marital status and allowances
info for employee's FICA `
wage year to date earnings fica rates `
reserve liquidity
ways to convert the reserves readily to cash
consideration
what is exchanged for the promise to do something or refrain from doing something and causes a contract to be binding
debit
what is the normal balance for the dividends account
balance is written in the item column
when opening a new page in the accounts receivable ledger
inflation
when rising prices decrease the value of money
income statement and balance sheet section of the worksheet
where do you get info for closing entries?
fractional-reserve system
where one keeps back or reserves only a fraction of the total gold that had been deposited
employee's earnings record
where the individual payroll record for each employee is recorded
maturity
which is a specified date in the future
balance sheet
which statement show financial strength
even if a general account has a balance of zero, it is
written on a trial balance
notes payable
written promises to pay a specific amount of money
Residual Claim
Lowest priority in case of bankruptcy. First Debtholders, then preferred, then common.
Percentage of fund in asset classes
Stocks 60% Bonds 30% Alternative assets 6% Money market securities 4%
Money Market Instrument Yields
Yields on money market instruments are not always directly comparable
