C
| Term | Meaning |
|---|---|
| Cafeteria plan | A benefit plan where employees can select desired benefits, subject to certain minimum choices and non-discriminatory rules. |
| Call loan | A loan repayable on demand, also known as a demand loan. |
| Call price | A specified price, usually above face value, at which a corporation may buy back and retire bonds before maturity. |
| Callable | Redeemable by the issuer before scheduled maturity. |
| Callable instrument | A bond that allows the issuer to redeem it before maturity. |
| Capital asset pricing model (CAPM) | A model describing the relationship between expected risk and return. |
| Capital expenditure | Outlay of money for acquiring or improving capital assets like buildings and machinery. |
| Capital gain | Portion of total gain on the sale of a non-inventory asset not taxed as ordinary income. |
| Capital projects funds | Funds for a not-for-profit organization’s land improvement, building addition, or renovation. |
| Capital stock | Ownership shares authorized by a corporation’s Articles of Incorporation, with a money value assigned. |
| Capitalize | Convert a schedule of income into a principal amount (capitalized value) by dividing by an interest rate. |
| Capitalized cost | Expenditure for acquired goods or services measured by cash paid or market value of property, capital stock, or services surrendered; written off during two or more accounting periods. |
| Capitalized interest | Interest cost during the time necessary to bring an asset to its intended use, included in historical cost. |
| Capitalized lease | Lease recorded as an asset acquisition with a corresponding liability by the lessee. |
| CAPM | Abbreviation for Capital Asset Pricing Model. |
| Carrying value | Net amount an asset or liability shows on a company’s balance sheet; also known as book value. |
| Carryovers | Provision in tax law allowing current losses or tax credits to be utilized in future periods. |
| Cash | Asset account on a balance sheet representing currency, coins, money orders, checks, bank balances, and short-term government securities. |
| Cash account | Brokerage firm account settling transactions on a cash basis. |
| Cash basis | Method of bookkeeping recording revenues and expenditures when received and paid. |
| Cash dividend | Distribution of a corporation’s earnings to stockholders in cash. |
| Cash equivalents | Short-term, highly liquid investments convertible to known amounts of cash. |
| Cash Flow to Assets | Measure of the ability of assets to generate operating cash flows. |
| Cash Flow to Sales | Measure of the ability of sales to generate operating cash flows. |
| Calendar variance | Variance occurring when a company uses calendar months for financial accounts but uses actual working days to calculate overhead expenses in cost accounts. |
| Call | Demand for repayment of a loan by a lender. |
| Capital | Money, property, and assets used in a business. |
| Capital account | An account stating the value of funds and assets invested in a business by the owners or shareholders. |
| Capital adequacy ratio | The amount of money a bank must have in the form of shareholders’ capital as a percentage of its assets. |
| Capital allowances | Allowances based on the value of fixed assets deducted from a company’s profits to reduce its tax liability. |
| Capital budgeting | The process of deciding on specific investment projects, expenditure amount, and financing for a business. |
| Capital consumption | In a given period, the total depreciation of a national economy’s fixed assets based on replacement costs. |
| Capital costs | Expenses on the purchase of fixed assets. |
| Capital deepening | Increased investment of capital in a business without changing other factors of production; also called capital widening. |
| Capital expenditure | Money spent on fixed assets such as property, machines, and furniture. |
| Capital flight | Rapid movement of capital out of a country due to lack of confidence in its economic future. |
| Capital gain | Money made by selling a fixed asset or certain other types of property, taxed at a lower rate than ordinary income. |
| Capital goods | Machinery, buildings, and raw materials used to make other goods. |
| Capital inflow | Movement of capital into a country through buying shares, whole companies, or other forms of investment. |
| Capital rationing | Restrictions on capital investment, either internally imposed or externally limited by factors like a budget ceiling or unavailable additional borrowing. |
| Capital reconstruction | Putting a company into voluntary liquidation and selling its assets to another company with the same name and shareholders but with a larger capital base. |
| Capital redemption reserve | An account preventing a reduction in capital when a company purchases or redeems its own shares out of distributable profits. |
| Capital reserves | Money from profits forming part of a company’s capital and usable for distribution to shareholders only during winding up. |
| Captive market | A market where one supplier has a monopoly, and buyers have no choice over the product they must purchase. |
| Carriage | Transporting goods from one place to another. |
| Carriage forward | A deal where the customer pays for transporting goods. |
| Carriage free | A deal where the customer does not pay for shipping. |
| Carriage inwards | Delivery expenses incurred through the purchase of goods. |
| Carriage outwards | Delivery expenses incurred through the sale of goods. |
| Carriage paid | A deal where the seller has paid for shipping. |
| Contingent policy | An insurance policy paying out only if a specific event occurs, such as the death of a person named in the policy. |
| Contingent reserve | A fund set aside to meet unexpected costs, e.g., an increase in interest rates. |
| Contra | An accounting term used when debits are matched with related credits in an account or set of accounts. |
| Controllable variance | A difference between actual and budgeted amounts considered within the control of the budget center manager. |
| Convertible loan stock | A debenture or loan stock exchangeable for ordinary shares at a later date. |
| Cooling-off period | Money lent to a company convertible into shares at a later date. |
| Correlation | A period when negotiations occur, and no action can be taken by either side. |
| Cost-volume-profit analysis | The degree of relationship between two sets of data. |
| Counterbid | A higher bid in reply to a previous bid. |
| Counterfoil | A slip of paper kept after writing a cheque, invoice, or receipt, as a record of the transaction. |
| Cheap money | Money that can be borrowed at a low rate of interest. |
| Claw back | To take back money that has been allocated. |
| Clean float | Floating a currency freely on international markets without government interference. |
| Closed economy | An economy where trade and financial dealings are tightly controlled by the government. |
| Closed-end credit | A loan, plus interest and finance charges, to be repaid in full by a specified future date, often with property or vehicles as collateral. |
| Coefficient of variation | A measure of the spread of statistical data, equal to the standard deviation multiplied by 100. |
| Cold start | The act of beginning a new business or opening a new shop with no previous turnover to base it on. |
| Collateral | A security (e.g., negotiable instruments, shares, or goods) used to guarantee a loan. |
| Competitive devaluation | A devaluation of a currency to make a country’s goods more competitive on international markets. |
| Competitive pricing | The practice of setting low prices on goods to compete with other products. |
| Conglomerate | A group of subsidiary companies linked together, forming a group, each making very different types of products. |
| Contested takeover | A takeover bid where the target company’s board does not recommend it to shareholders and tries to fight it; also called a hostile bid. |
| Contingency fund | Money set aside for urgent needs. |
| Contingent expenses | Expenses incurred only if a specific event occurs. |
| Contingent gain | A possible gain conditional on the occurrence of a certain event in the future. |
| Contingent liability | A liability that may or may not occur but is accounted for in a company’s books, distinct from provisions where money is set aside for an anticipated expenditure. |
| Contingent loss | A possible loss conditional on the occurrence of a certain event in the future. |
| Consolidated financial statements | Combined financial statements of a parent company and its subsidiaries as one economic unit. |
| Consolidation | Business combination of two or more entities transferring all their net assets to a new entity. |
| Constructive receipt | Taxpayer is considered to have received income even if not in hand but made available; e.g., interest on a bank account. |
| Consumer goods | Goods bought for personal or household use, distinguished from capital or producer’s goods used in production. |
| Contingency | An event that might happen but is not likely or planned. |
| Contingent liability | Potential liability arising from a past transaction or subsequent event. |
| Continuing operations | Portion of a business entity expected to remain active. |
| Continuing professional education (CPE) | Educational programs for certified public accountants (CPAs) to stay informed on changes in the profession. |
| Contra account | An account offsetting another account, usually established to reduce the other account to amounts that can be realized or collected. |
| Contra-liability account | A deduction from a liability, such as discounts on notes payable, reducing the balance of notes payable. |
| Contract | An agreement where rights or acts are exchanged for lawful consideration. |
| Contributed capital | The stockholders’ investment in a corporation. |
| Contribution margin | The excess of revenues over all variable costs related to a particular sales volume. |
| Control deficiency | When the design or operation of a control does not allow timely prevention or detection of misstatements. |
| Control risk | A measure of risk that errors exceeding a tolerable amount won’t be prevented or detected by internal controls. |
| Controls tests | Tests directed toward the design or operation of internal controls to assess effectiveness in preventing or detecting material misstatements. |
| Conversion | Exchange of a convertible security (e.g., a bond) into another security (e.g., shares of common stock). |
| Convertible stock | Stock that may be exchanged for other securities of the issuer. |
| Copyright | An exclusive right granted by the government to publish and sell literary, musical, or other artistic materials for a period, including computer programs. |
| Corporate bond | Debt instrument issued by a private corporation, distinct from government or municipal bonds. |
| Corporate income tax | The tax incorporated businesses must pay to the federal government and often to state and city governments. |
| Corporation | A form of doing business with a charter granted by a state or federal government, characterized by freely transferable capital stock, perpetual life, centralized management, and limited liability for owners. |
| COSO | An alliance of professional organizations dedicated to disseminating appropriate internal control standards. |
| Cost accounting | Procedures used for classifying, recording, and allocating current or predicted costs related to a certain product or production process. |
| Cost basis | The original price of an asset used in determining capital gain. |
| Cost of Capital | The rate of return a business could earn with equivalent risk on another investment. |
| Cost of Goods Sold | The cost of buying raw materials and producing finished goods. |
| Cost recovery method | Method of recognizing profits after costs are completely recovered; often used when total collections are highly uncertain or in tax accounting to depreciate assets. |
| Coupon | Interest rate on a debt security promised to the holder until maturity, expressed as an annual percentage of face value. |
| Coupon bond | A bond with interest coupons stating the amount of interest due and the payment date, usually not registered with the issuing corporation. |
| Coverdell education savings account | A tax-exempt trust for paying qualified higher education costs of the designated beneficiary. Also known as an education IRA. |
| CPA | Certified Public Accountant – An accountant who has satisfied education, experience, and examination requirements. |
| CPE | Continuing Professional Education – Educational programs for CPAs to stay informed on changes in the profession. |
| Credit | An entry on the right side of a double-entry bookkeeping system representing the reduction of an asset or expense or addition to a liability or revenue. |
| Credit agreement | An arrangement where one party borrows or takes possession in the present by promising to pay in the future. |
| Credit balance | Balance remaining after a series of bookkeeping entries, representing a liability or income to the entity. |
| Creditor | A party that loans money or other assets to another party. |
| Current asset | An asset expected to convert into cash, sell, or consume in operations within a single operating cycle or within a year if multiple cycles are completed. |
| Current liability | An obligation expected to require the use of existing resources classified as current assets or the creation of other current liabilities for liquidation. |
| Current ratio | An indicator of a company’s liquidity, found by dividing current assets by current liabilities. |
| Current value | The value of an asset at the present time compared to its historical cost or determined by discounting the future revenue stream. |
| Current yield | Annual interest on a bond divided by the market price. |