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NET WORTH |
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The amount owned by the owners; the amount by which assets exceed liabilities. The book value of the investments plus retained earnings. Also called EQUITY; OWNER'S EQUITY. For a corporation, net worth is known as STOCKHOLDERS' EQUITY. For a partnership, the value of the total of all the shares of all the partners. For a proprietorship, net worth is known as OWNER'S EQUITY. For an individual, net worth is also called PERSONAL NET WORTH, the total value of all possessions (assets), such as cash, checking account balance, stocks, bonds, house, car and personal property minus all debts such as a mortgage, loans and revolving credit accounts.
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ADVANCE PAYMENT |
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In international trade, payment for goods by a foreign customer prior to receiving the goods. This method of payment is beneficial to the supplier but is very risky for the foreign customer because the goods may not get shipped as planned, the goods may get lost or the goods could be damaged during shipment.
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ALLOWANCE FOR BAD DEBTS |
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An account established to record a subtraction from ACCOUNTS RECEIVABLE, to allow for those accounts that will not be paid.
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LOAN CORRESPONDENT |
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One who negotiates loans for lenders. The correspondent often services the loan and acts as the collection agent for the lender.
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ACCOUNTING PRACTICES |
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Basic concepts, assumptions, policies, methods and practices used by a company for maintaining the BOOKS OF ACCOUNT and summarization into FINANCIAL STATEMENTS. The principles should be consistent with GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. In larger companies, accounting policy, practices and principles may each have more precise definitions.
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COST-PLUS CONTRACT |
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A contract agreement wherein the purchaser agrees to pay the cost of all labor and materials plus an amount for contractor overhead and profit (usually as a percentage of the labor and material cost).
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