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PERFORMANCE BOND |
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A type of insurance, purchased by a business that will ensure accomplishment of the work for a customer in accordance with the contract. The bond usually provides that if the contractor fails to complete the contract, the surety itself can complete the contract. The insurance company providing performance bonds is called a surety company or simply a SURETY.
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ADDENDUM |
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Additional material attached to and made part of a document. Often an addendum is the result of information learned after the original document was prepared.
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ACCOUNT EXECUTIVE |
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A professional person in a firm who is responsible for a customer's ACCOUNT; the person at the firm who is contacted for discussion about the account.
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ACID TEST RATIO |
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See QUICK RATIO.
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PARTNERSHIP RETURN |
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The informational federal government document (FORM 1165) used to show the income (or loss) of a partnership. See PARTNERSHIP.
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PAST DUE |
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Later than agreed; not on time; untimely. Past due usually refers to a payment that has not been made on time.
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ADMINISTRATIVE EXPENSE |
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Costs associated with staff and supporting personnel who are involved in managing the activities of the business; indirect expenses. As opposed to direct or production personnel expenses.
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ACQUISITION |
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To purchase a business or buy another business. Also, the process of obtaining a loan, obtaining other forms of financing or the purchase of property by the business.
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PERSONAL LOAN |
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A LOAN made to a person, as opposed to a commercial loan made to a business. See also COMMERCIAL LOAN.
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AD VALOREM TARIFF |
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In international trade, a duty (tariff) assessed by customs as a percentage of the value of the imported goods.
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ACCOUNT |
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In general, the contractual relationship between buyer and seller under which payment is made at a later time. The term OPEN ACCOUNT is used for commercial transactions whereas CHARGE ACCOUNT is used to describe personal transactions. In accounting and bookkeeping, an historical record of transactions, as shown on a STATEMENT OF ACCOUNT. Each account is an individual subclassification of 1) an asset; 2) a liability; 3) equity; 4) income; or 5) an expense as represented by ledger pages to which debit and credit entries are chronologically posted to record changes in value. Guidance for typical account types can be found in a CHART OF ACCOUNTS. In banking, a relationship established at a bank in the name of a client where deposits and withdrawals are made. Usually deposits are on-hand against which withdrawals can be made. Administrative responsibility is handled by an ACCOUNT OFFICER.
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PAR VALUE |
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See PAR.
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ADVERTISEMENT |
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A paid message, in a public medium, designed to influence the purchasing behavior or thought pattern of an audience.
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ACCOUNTS PAYABLE |
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Money owed by the business to suppliers; amounts owed to others (creditors) on an open account for goods and services purchased by a business. Analysts look at the relationship of accounts payable compared to purchases for indications of sound day-to-day financial management. See TRADE CREDIT.
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ACCRUE |
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To accumulate over a period of time, such as ACCRUED INTEREST, ACCRUED EXPENSE or ACCRUED DEPRECIATION. As an example, accrued expenses have been incurred but are not yet payable. See also ACCRUED.
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PAPER |
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A business term that describes forms of money other than cash, such as mortgage, note, stock, bond or consumer loan. These other forms are often held as security for a collateralized loan. In general, the sheets of material that are used for transmitting printed material.
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ACCOUNTING FIRM |
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A business that provides professional financial and accounting services.
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ACCRUED INTEREST |
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INTEREST that has accumulated over a period of time and is obligated to be paid but has not yet been paid. Accrued interest can either be income, such as interest from investments, or it can be an expense, such as payment of interest on a debt.
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PERSONAL PROPERTY TAX |
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By law, a payment made to a government (usually state or local) and calculated as a percent of the worth of the personal property asset.
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ADJUSTED BASIS |
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The original COST BASIS of property reduced by depreciation and increased by improvements.
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PAYABLES |
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An amount to be paid. Payables are a list of amounts currently due to be paid. See ACCOUNTS PAYABLE.
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PAYROLL |
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The list of employees in a company, i.e., the employees who are paid by the company. When a person is employed by a company, that person may say he or she is on the payroll.
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PASSIVE INVESTOR |
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A person who provides equity (an investor) for a business but does not participate in the active operation of the business; the opposite of an active owner/manager. In taxing, an IRS classification of income such as real estate in which investors often are not participants in the management of the business.
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PAID INVOICE |
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A bill showing goods and services sold by a seller on which is marked "paid," showing evidence by the seller that the buyer has remitted the total amount due at the time of purchase or in advance of purchase.
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PERSONAL INJURY INSURANCE |
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Coverage by an insurance company for a physical harm to an individual person.
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PAST DUE ACCOUNT |
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An account that has a payment that was not received by the scheduled date.
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PERFECT COMPETITION |
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A market condition where no buyer or seller has the economic power to alter the market price of a good or service; characterized by a large number of buyers, a large number of sellers, all selling similar products or services, an equal awareness of prices and volume, an absence of discrimination in buying or selling, total mobility of productive resources and complete freedom of entry into the market. As opposed to MONOPOLY; OLIGOPOLY. Also called PURE COMPETITION.
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