C.A.
Sometimes used to identify the Chief Accountant.

Call
Can be  a) process of redeeming a bond or preferred stock issue before its normal maturity. A security with a call provision typically is issued at an interest rate higher than one without a call provision. Investors look at yield-to-call rather than yield-to-maturity; b) right to buy 100 shares of stock at a specified price within a specified period;  c) option to buy (call) an asset at a specified price within a specified period; or, d)  in financing, a demand for payment of a loan. A lender can make a call if the borrower has failed to make timely payments or has breached a contractual agreement regarding the loan.

Call Option
An option to purchase shares of a stock at a specific price in a certain time period. Brokers exercise a call option if the price of the stock rises above the option price during the option period.

Callable Bond
A bond the issuer has the right to pay off at issuer's discretion prior to the maturity date.

Call Premium 
A premium in price above the par value of a bond or share of preferred stock that must be paid to holders to redeem the bond or share of preferred stock before its scheduled maturity date.

Call Provision
Is  a) a provision of a bond or preferred stock issue, listed in its indenture (the formal agreement between the bond issuer and the holder) that allows the issuer to redeem the bond before the maturity date either at par or at a premium to par; or, b)  a clause in a mortgage giving the lender the right to demand and receive payment of the balance of the unpaid principal in full under certain conditions. A call provision is similar to an acceleration clause.

Calls & Puts
Options to sell or buy stock shares at a certain price within a certain time. The holder of a put can require a buyer to buy an option, within the agreed-upon time period, at the specified price. The holder of a call can demand that a seller sell an option, within the agreed-upon time period, at the agreed-upon price. Investors buy put and call options as a hedge against large declines or rises in stock prices.

Canceled Check (or cleared check)
A check that has been endorsed by a payee and paid by the bank from which it was drawn.

Candy Deal  
A slang term that refers to an illegal business practice to inflate revenue/sales numbers by selling product to distributors with a pledge to buy them back later, in addition to providing a percentage kickback to the distributor for assisting in falsifying the sale.

Capital
In economics, capital can mean: factories, machines, and other man-made inputs into a production process. In finance, capital is money and all other property of value in a corporation or other enterprise used in transacting the business. These items of value include cash, inventory, and property.

Capital Account
In finance, is an account of the net value of a business at a specified date; in economics, it is that part of the balance of payments recording a nation's outflow and inflow of financial securities.

Capital Asset
Is a long-term asset that is not purchased or sold in the normal course of business. Generally, it includes fixed assets, e.g., land, buildings, furniture, equipment, fixtures and furniture.

Capital Contribution
Cash or property acquired by a corporation from a shareholder without the receipt of additional stock. Further, it is a contribution of funds or property to the capital of a business by a partner, owner, or shareholder. Under Internal Revenue Code, a capital contribution is generally excluded from a company's gross income, unless it is a loan from a shareholder that the company is released from repaying.

Capital Expenditure (CAPEX)
The amount used during a particular period to acquire or improve long-term assets such as property, plant or equipment.

Capital Funds
The total of capital debentures, if any, capital stock, if any, surplus, undivided profits, unallocated reserves, guaranty fund, and guaranty fund surplus.

Capital Gain (or loss)
The difference between the purchase price of a capital asset and the resale price. If the resale price is higher than the purchase price, a capital gain results. If the resale price is lower than the purchase price, that represents a capital loss. Capital gains of individuals are subject to favorable tax treatment.

Capital Improvement
In real estate, is any permanent structure or other asset added to a property that adds to its value. In general, it is any value added activity or cost to a long-term or permanent asset that increases its value.

Capital Infusion
Often refers to the cross-subsidization of divisions within a firm. When one division is not doing well, it might benefit from an infusion of new funds from the more successful divisions. In the context of venture capital, it can also refer to funds received from a venture capitalist to either get the firm started or to save it from failing due to lack of cash.

Capitalization
The statement of capital within the firm - either in the form of money, common stock, long-term debt, or in some combination of all three. It is possible to have too much capital (in which case the firm is overcapitalized) or too little capital (in which case the firm is undercapitalized). Further, it is the total par value or the stated value of no-par issues of authorized stock. Also, it is the total capital liabilities of a business including both equity capital and debt capital.

Capitalization Rate
Also known as CAP RATE, is the rate of return a property will produce on the owner's investment. It is stated as a rate of interest or discount rate used to convert a series of future payments into a single 'present value'. In real estate, the rate includes annual capital recovery in addition to interest.

Capitalize
In general business, it is to supply with capital, as of a business by using a combination of capital used by investors and debt capital provided by lenders; or, to consider expenditures as capital assets rather than expenses. Specifically, it is to: a) convert a schedule of income into a principal amount, called capitalized value, by dividing by a rate of interest; b) record capital outlays as additions to asset accounts, not as expenses; c) convert a lease obligation to an asset/liability form of expression called a capital lease, i.e., to record a leased asset as an owned asset and the lease obligation as borrowed funds;  d) turn something to one’s advantage economically, e.g., sell umbrellas on a rainy day; or, e) to treat as a capital expenditure rather than an ordinary and necessary expense.

Capitalized Costs
Are business expenses that are written off or deducted over a period of time through depreciation or amortization schedules.

Capital Lease
Is a lease obligation that has to be capitalized on the balance sheet. It is characterized by: it is non-cancelable; the life of lease is less than the life of the asset(s) being leased; and, the lessor does not pay for the upkeep, maintenance, or servicing costs of the asset(s) during the lease period. For accounting purposes, a lease that is treated as an owned asset. Equipment is often leased to companies on a capital basis. The company leasing the asset enjoys the tax benefits of ownership, including deductions for maintenance expenses. When the lease expires, the company leasing the asset is usually allowed to purchase it.

Capital Loss
Is the excess of purchase price over selling price when the assets have been held for more than a certain period of time and which is given a special treatment for tax purposes.

Capital Market
Is a market where equity or debt securities are traded. It is a general term referring to stock markets and bond markets where governments and corporations can sell securities, stocks, and bonds in order to raise capital.

Capital Reduction
Means reducing a company's stated capital base.

Capital Reserve
A fund set aside for specific purposes, thereby cannot be distributed for other uses. See also Revenue Reserve.

Capital Stock 
The ownership shares of a corporation authorized by its articles of incorporation, including preferred and common stock.

Carry Forward (CF)
Data items that will always carry forward into subsequent transactions. If the item is allowed per the required/conditional matrix and no entry is made, the new transaction will reflect the data from the most current record. For example, if the new transaction to be added is current (in sequence), the CF data item will carry forward the data from the prior active record. If the new transaction to be added is out-of-sequence and no entry is made, the CF data item will reflect the data from the current status record. If the item is not allowed, the new transaction will reflect the data from the prior active record.

Carrying Value
Also known as "book value", it is a company's total assets minus intangible assets and liabilities, such as debt.

Cash
Money, in the form of notes and coins, which constitutes payment for goods at the time of purchase, that can be used for financial transactions, including funds held in checking accounts.

Cash Basis of Accounting
The accounting basis in which revenue and expenses are recorded in the period they are actually received or expended in cash. Use of the cash basis generally is not considered to be in conformity with generally accepted accounting principles (GAAP) and is therefore used only in selected situations, such as for very small businesses and (when permitted) for income tax reporting. Cash basis accounting is generally easier to do - and often produces tax benefits. See also Accrual Basis.

Cash Book
A book (ledger) that records all payments and receipts of business transactions – whether by cash, check or credit card.

Cash Clearing Account
Represents a clearing account for voided and reissued imprest cash checks. It is also used for miscellaneous corrections of imprest cash checks.

Cash Cows
Products that produce a large amount of revenue or margin because they have a large share of an existing market which is only expanding slowly.

Cash Discount
A refund of some fraction of the amount paid because the purchase price is paid by the buyer in cash, as opposed to making the purchase on credit or, sometimes, credit card or check.

Cash Dividend
The payment of earnings to shareholders in the form of stock dividends paid in cash, not in shares of stock.

Cash Draw see Proprietors Draw.

Cash Earnings 
Cash revenues minus cash expenses. This differs from earnings in that it does not include non-cash expenses such as depreciation.

Cash Flow 
Earnings before depreciation and amortization. Cash flow is calculated as the difference between cash inflows and outflows. Cash flow can be derived from Operating Profit by adjusting for items which do not affect payments (e.g. depreciation) and items (e.g. changes in working capital) which affect payments but are not recorded in Operating Profit.

Cash In Advance 
When full payment is due before the merchandise is shipped. Least risk to seller, most risk to buyer.

Cash On Hand
Literally means coin, currency, and cash items on hand. It is not possible to have negative cash on hand.

Cash Profit 
Profit after tax plus depreciation.

Cash Receipts Journal 
The journal for recording all cash receipts.

Cash Reserve Ratio (CRR)
A ratio which banks have to maintain with itself in the form of cash reserves or by way of current account with the Reserve Bank, computed as a certain percentage of its demand and time liabilities. The objective is to ensure the safety and liquidity of the deposits with the banks.

Cash Short/Over Account
In retail sales, is where any differences between the cash register tape totals and the actual cash receipts is charged against the cash short and over account. If the ending balance of the account is a debit it is shown on the Income Statement as a miscellaneous expense. If the ending balance of the account is a credit it is shown on the Income Statement as Other Revenue.

Caveat
Generally, is a warning against certain acts; in law, is a formal notice filed with a court or officer to suspend a proceeding until filer is given a hearing.

CEO
Is an acronym for Chief Executive Officer. The CEO is the principle individual responsible for the activities of a company.

Certificate of Deposit (CD)
Is a document written by a bank or other financial institution that is evidence of a deposit, with the issuer’s promise to return the deposit plus earnings at a specified interest rate within a specified time period. The CD bank deposit pays a fixed rate of interest over a stated period of time. Most CDs cannot be redeemed without substantial penalty until a maturity date is reached.

Certificate of Origin
A document that states where the goods were made. This document is legally required for many countries for the importation of merchandise.

Certified Financial Planner (CFP) 
A financial planner who has received a license from the Institute of Certified Financial Planners, indicating that he/she was trained in investments, budgeting, taxes, banking, estate planning and insurance. Some CFPs work on commission for the products they sell, and some work for a flat hourly fee.

Certified Financial Statements 
Financial statements that have undergone a formal audit by a certified public accountant and usually contain statements of certification by the CPA.

Certified Payroll Report 
The record that a contractor or subcontractor engaged on a public work is required to submit to an awarding government body with a statement of compliance as required pursuant to regulations for each month in which the contractor or subcontractor employs one or more workmen in connection with the public work.

Certified Public Accountant (CPA)
An accountant licensed to practice public accounting.

Chargeback
In the credit industry, occurs when a credit card processor “charges back” to the merchant the cost of returned items or incorrect orders that the customer claims were made to his or her credit card.

Chapter S or Sub-Chapter S (or S-Corporation)
A legal corporate entity organized under the United States Federal Tax Code that allows Subchapter S Corporations to distribute all income / loss proportionately to its shareholders, who then claim that income / loss on their personal income taxes; thereby avoiding the payment of corporate taxes.

Charitable Contribution
A contribution to a charity that can be deducted for income tax purposes.

Charitable Gift Annuity
An annuity purchased from a charitable organization for more than the annuity’s market value. The amount paid over and above the market value is considered a charitable donation.

Charter
Is the document of corporation organization.

Chartered Accountant (CA)
Is a British accountant who is a member of the Institute of Chartered Accountants. They work in many areas of business and the public sector, in roles ranging from sole practitioner to chief executive of a multinational company. In public practice firms, they provide professional services to a wide range of fee paying clients from private individuals to large commercial and public sector organizations, including banks. These services include audit/assurance, accountancy, tax, business advisory, management consultancy, systems and IT, corporate finance, corporate recovery and forensic accounting. In commerce/industry and the public sector, they work in a variety of roles including fund management, venture capital and equity analysis, as well as financial management and financial reporting roles.

Chartered Financial Consultant (ChFC) 
A financial planning designation for the insurance industry. ChFCs must meet experience requirements and pass exams covering finance and investing. They must have at least three years of experience in the financial industry, and have studied and passed an examination on the fundamentals of financial planning, including income tax, insurance, investment and estate planning.

Chart of Accounts
The list of ledger account names and associated numbers arranged in the order in which they normally appear in the financial statements. The Chart of Accounts are customarily arranged in the following order: Assets, Liabilities, Owners' Equity (Stockholders' Equity for a corporation), Revenue, and Expenses.

Chattel Mortgage Contract
A credit contract used for the purchase of equipment where the purchaser receives title of the equipment upon delivery but the creditor holds a mortgage claim against it.

Check
A draft drawn against a bank, payable upon demand to the person/entity named upon the draft. Another definition is a written order instructing a bank to pay a sum to a third party.

Check Kiting
An illegal scheme for fraudulently inflating the account balance of checking accounts. For example, a man with two checking accounts, one in Bank A and one in Bank B, writes a check on account A for $5,000 to his Bank B account. He deposits the check in Bank B. Until the check clears, he has $5,000 in both Bank B and Bank A. Next, he writes a check on account B for $5,000 to his Bank A account. He deposits this check, too. Until the checks clear, he has $10,000 in his Bank A account and $5,000 in his Bank B account. On paper he has $15,000; actually; he has only $5,000.

Check Register
The journal for recording payments by check.

Chief Accounting Officer see CFO.

Churn Rate
Is the percentage of customers (e.g., cellular telephone subscribers) that cancels their service per month.

CIA
In accounting, is an acronym for Certified Internal Auditor; or, Cash in Advance.

Claim
In health care, is an itemized statement of healthcare services and their costs provided by a hospital, physician's office, or other provider facility. Claims are submitted to the insurer or managed care plan by either the plan member or the provider for payment of the costs incurred. In general law, a claim is: 1) to make a demand for money, for property, or for enforcement of a right provided by law. 2) the making of a demand (asserting a claim) for money due, for property, from damages or for enforcement of a right. If such a demand is not honored, it may result in a lawsuit. In order to enforce a right against a government agency (ranging for damages from a negligent bus driver to a shortage in payroll) a claim must be filed first. If rejected or ignored by the government, a lawsuit may be filed.

Clearance Letter
A documented certification from a recognized authority that the cleared entity has satisfied certain requirements, payments, actions, etc.

Cleared Items
Accounts payable documents which have been paid.

Clearing Account
In banking, is a bank account used by a mortgage servicing company for the temporary, short-term deposit of mortgage payments that have been collected and are either awaiting transmittal to investors who bought the mortgages or awaiting deposit in escrow accounts. See Cash Clearing Account.

Clifford trust
A trust established for ten or more years whereby assets are transferred from one individual to another and then back again when the ten or more year period is over. Before laws governing Clifford trusts were changed in 1986, they were often used to transfer assets, such as college funds, to children, who are taxed at a lower tax rate than adults. After the ten-or-more-year period, the adult could reclaim the trust.

Closely Held
A description of a corporation whose voting stock is owned by a very small number of shareholders.

Closing Account
The determining the balance of an account and posting an entry to offset such balance.

Closing Entry
A journal entry at the end of a period to transfer the net effect of revenue and expense items from the income statement to owners' equity.

Closing Price
The final price of a stock or commodity at the time the exchange closes for the day.

Cloud on Title
A title that cannot be transferred to someone else because liens, court judgments, or other impediments prevent the owner from selling it.

C.M.A.
Means Certified Management Accountant.

Coding
In accounting, is the assignation of the proper account code to invoices.

COGM
Is Cost Of Goods Manufactured. See Cost of Goods Sold.

Cognovit Note 
A note in which the maker acknowledges the debt and authorizes the entry of judgment against him or her without notice or a hearing: a note containing a confession of judgment. This type of note is not valid in many states.

COGAS
Cost Of Goods Available for Sale. See Cost of Goods Sold.

COGS see Cost of Goods Sold.

COGS (Cost of Goods) Ratio = COGS / Total Sales.

Cohort Survival Method
In academia, utilizes historic enrollment data and birth records to estimate future enrollments.

Co-Insurance
A percentage amount for which an insurance policyholder must be covered. For example, if a fire insurance policy has a 70 percent co-insurance clause, the insured must be covered for at least 70 percent of the value of his or her home.

Collar
A device that protects the lender and the borrower from fluctuations in interest rates. The collar consists of the floor, which is the lowest the interest rate on the loan can go, and the cap, which is the highest interest rate that the bank can charge the borrower.

Collateral
Assets used as security for the extension of a loan. Further, as part of a loan agreement, the property or securities that the borrower pledges to the lender in case the borrower cannot pay back the loan.

collateral loan
A loan given on the strength of the borrower’s collateral, as opposed to the borrower’s good standing in the community or good character.

Collateralized Mortgage Obligation (CMO)
Since 1986, a Real Estate Mortgage Investment Conduit (REMIC). CMOs and REMICs (terms which are often used interchangeably) are similar types of securities which allow cash flows to be directed so that different classes of securities with different maturities and coupons can be created. They may be collateralized by mortgage loans as well as securitized pools of loans.

Collective Investment Scheme
Globally, is any arrangement for pooling several investors' funds so that the pooled fund can obtain economies of scale and a spread of investments beyond the reach of individual investors. It is usually called an investment company in the U.S.A.

Combined Financial Statement
A financial statement that merges the assets, liabilities, net worth, and operating figures of two or more affiliated companies. A combined statement is distinguished from a consolidated financial statement of a company and subsidiaries, which must reconcile investment and capital accounts.

Commercial Bank
A financial institution that provides commercial banking services. A commercial bank accepts deposits, gives business loans and provides other services to businesses. It is a
full-service bank owned by stockholders that makes loans, accepts deposits, and offers other commercial financial services.

Commercial Attaché
A business and trade expert on the staff of a consulate or embassy. They are responsible for promoting exports of their country's goods and are an excellent source of help.

Commercial Loan
A short-term business loan usually issued for a term of up to six months.

Commercial Paper
Short-term obligations with maturities ranging from 2 to 270 days issued by corporations, banks, or other borrowers to investors who have temporarily idle cash on hand. Commercial paper is usually unsecured and discounted and include promissory notes, such as checks, drafts, and IOUs, that constitute a debt of some kind. Commercial paper is negotiable and can be traded.

Commitment
The act of standing behind a policy whose value ends when the policy is concluded. For example: "We made a commitment to do this".

Commitment Based Accounting
Where spending controls are enacted to ensure that no budget executor can exceed his annual appropriation.

Committed Costs
Are costs, usually fixed costs, which the management of an organization has a long-term responsibility to pay. Examples include rent on a long-term lease and depreciation on an asset with an extended life.

Commodity Exchange
A marketplace where dealers and traders can meet to buy and sell goods.

Common Law
The body of law developed in England, based on precedents and custom, that forms the basis for the legal system in all states except Louisiana, where Napoleonic law is practiced.

Common Stock
Is the most frequently issued class of stock; usually it provides a voting right but is secondary to preferred stock in dividend and liquidation rights. They are securities that represent ownership in a corporation. By law, holders of common stock can receive dividends only after claims by preferred stockholders, creditors, and bondholders have been satisfied. Common stockholders are the last to be paid if a corporation becomes bankrupt.

Company
An organized group of people to perform an activity, business or industrial enterprise.

Company Limited By Guarantee
Where the liabilities of the members will be restricted to the amount each agrees to contribute to the assets of the company in the event of dissolution or liquidation.

Company Limited By Shares 
Where the members personal liabilities are limited to the par value of their shares. A company limited by guarantee.

Compensating Balance
A minimum balance that borrowers who wish to secure a loan from a bank must keep on deposit with the bank.

Compilation
The presentation of financial statement information by the entity without the accountant’s assurance as to conformity with Generally Accepted Accounting Principles (GAAP). In performing this accounting service, the accountant must conform to the AICPA Statements on Standards for Accounting and Review Services (SSARS).

Composite Depreciation
The grouping of similar assets or dissimilar assets within the same class together for the purpose of computing a single depreciation rate to be applied to all assets within the group.

Composite Financial Statement
An average or index of financial statements of multiple accounting periods or companies, e.g., industry averages.

Compound Annual Growth Rate (CAGR)
The year over year growth rate applied to an investment or other part of a company's activities over a multiple-year period. The formula for calculating CAGR is (Current Value/Base Value) ^ (1/# of years) - 1.

Compound Interest
Interest calculated from the total of original principal plus accrued interest.

Compound Journal Entry
A journal entry that involves more than one debit or more than one credit or both.

Comptroller
Is the misspelling of the word CONTROLLER caused by confusion in the root of the word in French and Latin. Comptroller is sometimes used within titles in the government, e.g. Comptroller of the Currency.

Compulsory Liquidation
The winding-up of a company by a court. A petition must be presented both at the court and the registered office of the company. Those by whom it may be presented include: the company, the directors, a creditor, an official receiver, and the Secretary of State for Trade and Industry. The grounds on which a company may be wound up by the court include: a special resolution of the company that it be wound up by the court; that the company is unable to pay its debts; that the number of members is reduced below two; or that the court is of the opinion that it would be just and equitable for the company to be wound up. The court may appoint a provisional liquidator after the winding-up petition has been presented; it may also appoint a special manager to manage the company's property. On the grant of the order for winding-up, the official receiver becomes the liquidator and continues in office until some other person is appointed, either by the creditors or the members.

Conducive
Intending to bring about or being partly responsible for, e.g. current working conditions that may not be conducive to productivity.

Conduit
A primary means by which something is transmitted,

Conduit Debt
Issued by a state agency or public corporation on behalf of borrowers which include businesses, health care institutions, private higher education institutions, local governments, and qualified individuals (loans for higher education and housing purposes). No State credit support is provided.

Conservatism Principle
Provides that accounting for a business should be fair and reasonable. Accountants are required in their work to make evaluations and estimates, to deliver opinions, and to select procedures. They should do so in a way that neither overstates nor understates the affairs of the business or the results of operation.

Conservator
A person appointed by a court to manage the affairs of an estate or the affairs of a person deemed incompetent.

Consignment
When goods are offered for sale on behalf of another without the seller actually purchasing or taking title to the goods. Only when there is a subsequent sale does the owner receive any payment.

Consolidated Financial Statements
The end financial statement that accounts for all assets, liabilities and operating accounts of a parent and all subsidiaries.

Consolidation
Is similar to refinancing, but there is no loan fee. It simplifies loan repayment by combining several types of federal education loans into one new loan. (In the case of Direct Loan consolidation, the interest rate may be lower than one or more of the underlying loans).

Consortium
An association of companies for some definite purpose.

Construction in Progress
Capital assets under construction or development that have not yet been placed into service, such as a building or parking lot. Capital assets are not subject to depreciation while in a construction in progress status.

Construction Loan
A loan covering construction costs, paid out at intervals as the construction project is completed. Also called a construction mortgage.

Constructive Notice
A notice published in a newspaper announcing some action, such as a lien or the confiscation of property by the state. By law, some actions must be “given constructive notice” so that anyone objecting can take action.

Consular Declaration
A formal statement to the consul of a foreign country declaring the merchandise to be shipped.

Consumer Price Index (CPI)
Is the measure of change in consumer prices as determined by a monthly survey by the U.S. Bureau of Labor Statistics. Among the CPI components are the costs of food, housing, transportation, and electricity (i.e., the average cost of a "basket" of goods and services). Also known as the cost-of-living index.

Contingent Liability
Is: (a) A possible obligation from past events that will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise; or (b) A present obligation from past events but is not recognized because (i) it is not probable that an outflow of resources will be required to settle the obligation; or (ii) the obligation cannot be measured reliably. Some examples: in corporate reports are pending lawsuits, judgments under appeal, disputed claims, and the like, representing potential financial liability.

Contra Account
1. is the reduction to the gross cost of an asset to arrive at the net cost; also known as a valuation allowance; e.g., accumulated depreciation is a contra account to the original cost of a fixed asset to arrive at the book value; or, 2. reduction of a liability to arrive at its carrying value; e.g., bond discount, which is a reduction of bonds payable.

Contract
A legally binding agreement between two or more parties, where the responsibilities of each are clearly outlined.

Contract Law
That body of law which regulates the enforcement of contracts. Contract law has its origins thousands of years ago as the early civilizations began to trade with each other, a legal system was created to support and to facilitate that trade. The English and French developed similar contract law systems, both referring extensively to old Roman contract law principles such as consensus ad idem or caveat emptor. There are some minor differences on points of detail such as the English law requirement that every contract contain consideration. More and more states are changing their laws to eliminate consideration as a prerequisite to a valid contract thus contributing to the uniformity of law. Contract law is the basis of all commercial dealings from buying a bus ticket to trading on the stock market.

Contractor
The person or entity who will provide the goods or services under the provisions of the contract.

Contributed Assets
Those assets, including real property assets, that are owned, leased or licensed by the contributing entity. Such contributions are normally associated with the contributing entity receiving equity interest (in a commercial exchange) or tax relief (in a charitable donation) in recognition of the value for those contributed assets.

Contributed Capital (see Paid-in-Capital).

Control Account  
A summary account in the General Ledger that is supported by detailed individual accounts in a subsidiary ledger.

Controller
Usually an experienced accountant who directs internal accounting processes and procedures, including cost accounting.

Conventional Mortgage
A mortgage not backed by the Federal Housing Administration (FHA).

Convertible Bond
A bond that can be converted to other securities under certain conditions.

Convertible Currency
Is any national currency that can be easily exchanged for that of another country. Countries whose currency is not convertible set restrictions on how their currency can be traded.

Convertible Preferred Stock
Is preferred stock which can be converted into common stock at the option of the holder of the preferred stock.

COO
Is an acronym for Chief Operating Officer. The COO is responsible for the day-to-day management of a company. The COO usually reports to the CEO.

Cookie Jar Reserves
An overly aggressive accrual of operating expenses and the creation of liability accounts done in an effort to reduce future year operating expenses.

Cooking the Books
Occurs when a company fraudulently misrepresents the financial condition of a company by providing false or misleading information.

Cooperative Advertising
A joint advertising strategy under which costs are shared; e.g. by a manufacturer and another firm that distributes its products.

Co-Payment
In a health insurance plan, a percentage of a medical bill that you pay (the insurer covers the rest). Typically, you co-pay bills until you reach a certain dollar limit. After that point, the insurer pays 100 percent of your medical bills.

Corporate Governance 
The system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance.

Corporation
A type of business organization chartered by a state and given many of the legal rights as a separate entity.

Corpus
Latin for body. The corpus is the principal of a fund or estate, as distinguished from the interest or other income it generates. Corpus is often confused and misunderstood. The literal meaning of the term corpus is the main part/organ of a body. The term corpus also denotes the sum and substance of an issue/entity.

Correcting Entry
A type of ADJUSTING ENTRY, is required at the end of an accounting period if a mistake was made in the accounting records during the period. See Reversing Entry.

Co-Signer
A joint signer of a promissory note. Co-signers are jointly responsible for paying back loans.

Cost
The amount of money that must be paid to take ownership of something; expense or purchase price.

Cost Accounting
A managerial accounting activity designed to help managers identify, measure, and control operating costs.

Cost Basis
In securities, it is the purchase price after commissions or other expenses. It is used to calculate capital gains or losses when the security is eventually sold.

Cost Center
A non-revenue-producing element of an organization, where costs are separately figured and allocated, and for which someone has formal organizational responsibility.

Cost of Debt
Is interest rate times 1 minus the marginal tax rate (because interest is a tax deduction). An increase in the tax rate decreases the cost of debt.

Cost of Equity (COE)
Is the minimum rate of return a firm must offer owners to compensate for waiting for their returns, and for bearing risk. It is calculated: COE = Dividends per Share (for next year) / Current Market Value of Stock + Growth Rate of Dividends.

Cost of Goods Sold (COGS)
A figure representing the cost of buying raw material and producing finished goods. Included are precise factors, i.e. material and factory labor; as well as others that are variable, such as factory overhead.

Cost of Revenue
See Cost of Goods Sold (COGS).

Cost of Sales
See Cost of Goods Sold (COGS).

Cost Per Thousand (CPM)
Advertising terminology used in buying media. CPM refers to the cost it takes to reach a thousand people within your target market.

Cost-Plus
Determining payment based on the actual cost of production or service provisioning plus an agreed-upon fee or rate of profit; for example, a cost-plus government contract.

Countersign
A signature that asserts the authenticity of a document already signed by another. In most companies, large checks require a countersign. Also called countersignature.

Country Risk
The risk that an economic or political upheaval in a country will deplete its foreign reserves and prevent the country from paying back international loans.

Coupon
A certificate attached to a bond stating how much interest is due. When the coupon is presented, the interest payment is made.

Coupon Bond
Pays the holder of the bond a fixed interest payment (a coupon payment) every year until the bond reaches maturity. It is named a coupon payment, because a bondholder had to obtain their interest payment by clipping a coupon off of a bond and send it to the bond issuer, the bond issuer then sent the bondholder the payment. This process is no longer necessary for most coupon bonds. Examples of coupon bonds: Treasury bonds, Treasury notes and corporate bonds.

Coupon Rate
The annual interest rate of a bond.

Covenant
A written agreement between parties that has been sealed from public disclosure. It is also a clause in a contract that requires one party to do, or refrain from doing, certain things. It is usually a restriction on a borrower imposed by a lender.

Coverage of Fixed Charges
Computed by taking your net income, before taxes and fixed charges (debt repayment, long-term leases, preferred stock dividends etc.), and dividing by the amount of fixed charges. The resulting number shows your ability to meet your fixed obligations of all types - the higher the number, the better.

Creative Accounting
Slang for the concept of maintaining accounts giving possibly illegal or dubious benefits to the entity for which the accounts are maintained.

Credit
In accounting, is an accounting entry system that either decreases assets or increases liabilities. It is the portion of a bookkeeping entry that appears on the right side of a ledger; In general, it is an arrangement for deferred payment for goods and services. It is also money a bank or other lending institution places at your disposal when you agree to pay it back at a later date.

Credit Agency
An agency that obtains data about the credit history of individuals and companies and offers the data to creditors and others.

Credit Control
Policies and procedures aimed at controlling the granting of credit.

Credit Insurance
Insurance purchased by banks as a defense against large credit losses.

Credit Limit
The most that a consumer or company can borrow at one time from a bank or other creditor.

Credit Line
A prearranged agreement whereby a lender will extend to an individual or company. You typically pay an annual fee for a credit line even if you don’t use the credit line.

Credit Memo
A document used to issue a vendor credit.

Credit Rating
A lender’s appraisal of a borrower’s ability to pay back loans. Credit ratings are based primarily on the borrower’s past history of paying back loans.

Credit Risk
The risk that a borrower may not be able to pay back a loan.

Creditor
A bank or other agency that extends credit to borrowers. The opposite of a creditor is a debtor.

Creditors
The entities to which a debt is owed by an individual or another entity.

Cross-Collateral
Collateral that backs up several loans, not just one, as arranged by agreement with the lender.

Cross-Footing
The addition of columns of figures in different ways to check the accuracy of the totals, e.g. vertically and horizontally deriving the same total in a spreadsheet.

Crown Corporation
A corporation that has been established by a nation’s government.

Cumulative Earnings
Is the sum of all earnings over the time periods in question.

Cumulative Preferred Stock
Preferred stock which gives holder a right to dividends if they have not been paid in a given year.

Currency
Paper money in circulation. Also refers to the paper money issued by a nation. The dollar is the currency of the United States.

Currency Basket
Currency unit composed of currency from different nations. International transactions are sometimes made in basket currency to protect against one currency being devalued. For example, a payment made in U.S. dollars as well as Japanese yen retains more of its value if the yen or dollar happens to fall in value.

Currency Swap
An agreement between companies to exchange equivalent amounts of one type of currency for another. Companies engage in currency swaps, for example, to diversify their portfolios. At the end of the agreement, the currencies are swapped back.

Currency Translation
Changing balance sheet entries and totals from one currency to another. Multinational corporations perform currency translations on their balance sheets as a way of measuring financial performance. Some countries require corporations to do currency translations when reporting their income.

Current Assets
Those assets of a company that are reasonably expected to be realized in cash, or sold, or consumed during the normal operating cycle of the business (usually one year). Such assets include cash, accounts receivable and money due usually within one year, short-term investments, US government bonds, inventories, and prepaid expenses. They are assets that either are equivalent to cash or can easily and readily be converted into cash, including cash, money market funds, accounts receivable, inventory, and short-term investments.

Current Cost
The cost which would be incurred for replacement of an asset.

Current Cost Accounting
A system of accounting which adjusts for changing pricing.

Current Liabilities
Liabilities which are to be paid within one year of the balance sheet date.

Current Maturities-L/T/D
Is that portion of long term obligations which is due within the next fiscal year.

Current Portion of Long Term Debt
Only that portion of long-term obligations (payable in more than one year) which are owed and payable in the current year; e.g. the portion of a five-year loan or lease that is due in the current calendar/fiscal year.

Current Yield
The annual interest rate paid by a bond or other security, expressed as a percentage of the principal.

Cushion
The time between the date a bond is issued and its first call date; that is, the day it can be redeemed either in whole or in part.

Custodian
An entity, institution or broker entrusted with guarding and keeping property or records, and/or an institution or a broker that oversees the management of a group of assets.

Custodian Bank
The bank that acts a custodian to a mutual fund. Does not manage anything, just holds the cash and securities and does the clerical.

Custody Account
A bank account held in trust by a parent or guardian on behalf of a minor.

Customs
The authorities charged with collecting duty and controlling the entry of merchandise into a country.

Customs Broker
An individual or firm licensed to process entry and clear goods into the country for another.

Cut-Off Rate
The predetermined maximum rate and/or minimum rate at which the subject is still acceptable, but where a rate above the proscribed higher or below the proscribed lower rate is no longer acceptable.

Cut-Off Yield
In securities, is the yield at which or below which the bids are accepted.

Cycle Billing
Billing one set of customers from a customer list on specific days of the month. For example, customers whose last names begin with A would be billed on the first of the month, B on the second day, and so on. The idea is to spread out the paperwork over a month and keep bill payments coming in regularly.

Cycle Count
A partial count of a single inventory location as opposed to a Complete Count, i.e., a complete count of a single inventory location. An organization should not wait to do a complete count; usually once a year. The best way to ensure that a minimum of 97% accuracy is maintained in inventory on an ongoing basis is to continually count your products. That is, count part of your inventory every day, and count each item several times per year. This process is called "cycle counting".