Agency refers to the relationship between two parties where one, the agent, represents or acts on behalf of the other, the principal, in various contexts such as finance, government, investment, and personnel.
An agency agreement is a contract establishing a relationship where one party, the agent, is authorized to act on behalf of another party, the principal, for specific tasks or purposes, often involving business transactions.
Agency by Necessity is a legal concept where an agency relationship is recognized by courts, allowing one party to act on behalf of another in emergency situations related to essential needs.
A written explanation, to be signed by a prospective buyer or seller of real estate, explaining the role of the broker in the transaction, helping the client understand to which party the broker owes loyalty.
An annual fee paid to an agent for the work and responsibility involved in managing a loan after it has been signed.
An in-depth look into the dynamics and implications of the agency relationship within an accounting framework, focusing on costs, monitoring, and potential conflicts of interest between principals and agents.
An agency shop is an organizational arrangement in which employees who are not union members must pay a fee to the union to cover the costs of collective bargaining and other union services from which they benefit. This structure is subject to collective bargaining agreements and state laws.
An agent is a person appointed by another person, known as the principal, to act on his or her behalf. Agents have the authority to perform tasks or make decisions as specified by the principal.
Agglomeration refers to the accumulation into a single entity, such as a holding company, of several diverse and unrelated activities. Conglomerate companies often embody this concept.
A comprehensive term that refers to the sum total of individual elements. Commonly used in various fields such as economics, statistics, and business to describe the collective or total amount.
Aggregate demand is the total quantity of goods and services demanded across all levels of an economy at a particular time and price level. It reflects the aggregate expenditure for 'everything that will be bought' in an economy.
A line on a graph that represents the total quantity of a good or service consumed at each price level within a range of prices. For most normal goods, the quantity demanded decreases as the price increases, producing a downwardly sloping line on the graph.
Aggregate depreciation refers to the total amount of depreciation expense that has been accumulated over time for a fixed asset or group of assets since the beginning of their use.
Aggregate income represents the sum total of all incomes within an economy before adjusting for inflation, taxes, or types of double-counting. It is a fundamental economic measure essential for assessing the economic health and output of a nation.
Aggregate supply, also known as total output, represents the total amount of goods and services that firms in a national economy are willing to sell during a specific time period at different price levels.
The Aggregate Supply (AS) Curve represents the total quantity of goods and services that firms in an economy are willing and able to produce at each price level within a given range of prices. Illustrated on a graph, the curve typically slopes upward, indicating that higher price levels generally encourage firms to increase production.
An aggregator is a firm that collates and presents information about an individual's bank accounts, investments, insurance policies, and other financial data, enabling the person to manage their financial affairs through a single platform.
Aggressive Growth Funds are investment funds that focus on increasing capital by investing in rapidly growing companies. These funds aim for high return potential and are inherently more volatile and risky.
A critical tool for analyzing the quality of a company's receivables, the aging schedule classifies trade accounts receivables by their date of sale and reveals patterns of delinquency.
An agreed bid is a takeover bid that is supported by a majority of the shareholders of the target company, whereas a hostile bid is not welcomed by the majority of the shareholders of the target company.
An agreement is a mutual understanding between two or more competent parties that creates a commitment or an obligation, often forming the basis for a contract.
A written agreement between a seller and a purchaser where the purchaser commits to buying particular real estate and the seller commits to selling it under agreed-upon terms; also commonly known as a contract of sale.
Agribusiness refers to the large-scale production, processing, and marketing of food and nonfood farm commodities and products. It is a major commercial industry sector.
An inheritance tax relief available on the transfer of agricultural property under specified conditions, with relief rates at 50% or 100% depending on possession status and leasing history.
A comprehensive understanding of agriculture is paramount for recognizing the broader economic, environmental, and social impacts of this primary sector. This knowledge extends to managing biological assets and farming practices.
In accounting, AIA can refer to either the Association of International Accountants or the Annual Investment Allowance, each holding distinct significance in the field.
The American Institute of Certified Public Accountants (AICPA) is the national professional organization of Certified Public Accountants (CPAs) in the United States, offering resources, training, and advocacy to its members.
The Accountancy Investigation and Discipline Board (AIDB) was an independent regulatory body responsible for overseeing the accountancy profession, investigating allegations of accounting malpractice, and ensuring adherence to high professional standards.
The Association of Independent Financial Advisers (AIFA) was a prominent professional association representing the interests of independent financial advisories across the UK. Its mission was to ensure that consumers receive independent and high-quality financial advice.
Air freight refers to the use of air transportation for sending cargo. It offers the advantages of speed and reliability, making it ideal for shipping urgent, high-value, or perishable goods.
Air rights refer to the right to use, control, or occupy the vertical space above a designated piece of property. These rights can often be leased, sold, or donated to another party, making them a valuable asset in urban development and real estate transactions.
Documents that accompany a package sent through an express mail service, detailing necessary information for shipping, billing, and tracking.
AKA, an abbreviation for 'Also Known As,' is used to indicate an alias or alternative name by which a person, entity, or item is identified.
ALGOL (Algorithmic Language) is the name of two computer programming languages that have had a significant impact on the design of modern programming languages.
An algorithm is a precise sequence of instructions designed to solve a specific problem. It must be explicitly defined and consist of a finite number of steps. Algorithms are the foundation of computer programs, which are algorithms written in a language that computers can execute.
An alias, often abbreviated as AKA (also known as), is a secondary name or pseudonym by which a person is also recognized. The term 'alias' indicates that a person is known by more than one name.
An alien is an individual who is not a citizen of the country in which they reside. The term can be further classified into categories such as illegal alien and resident alien.
A company incorporated under the laws of a foreign country regardless of where it operates. 'Alien corporation' can be synonymous with 'foreign corporation,' but the latter can also refer to a corporation formed in a different U.S. state than where it conducts business.
In real property law, alienation refers to the voluntary transfer of title and possession of real property to another person. This concept is an essential aspect of fee-simple ownership, ensuring the owner's right to dispose of their property, while generally prohibiting unreasonable restraints on alienation.
The sale by a borrower of some or all of the assets that form the actual or implied security for a loan, often subject to provisions restricting such disposal.
Alimony refers to financial support provided by one spouse to another following a divorce or separation.
In the USA, alimony payments in a divorce settlement are treated as deductions from the adjusted gross income by the payer, but the recipient treats them as income for tax purposes.
All Risk or All Peril insurance covers each and every loss except for those specifically excluded, providing the broadest type of property protection available.
A pricing strategy where companies charge the maximum amount customers are willing to pay.
A term used to describe the state of a business that has failed, where all of its assets and properties are liquidated because there is no more work or business activities to conduct.
A calculation of net present value made under the assumption that the firm, project, or investment is funded entirely by equity. This method uses the equity discount rate.
The All-Inclusive Income Concept is a principle used in accounting to include all items of profit and loss in a statement to arrive at a figure of earnings. It is commonly used in the UK and the USA for a comprehensive view of an enterprise's financial performance.
All-purpose financial statements, also referred to as general purpose financial statements, are prepared with the objective of providing financial information that is useful to a wide range of users in making economic decisions.
An allegation refers to an assertion of fact made in a pleading, typically within the context of legal proceedings. It is a formal statement of an issue that the party raising it expects to prove.
Allfinanz, also known as bancassurance, is the partnership or collaboration between a bank and an insurance company, allowing the insurance company to sell its products to the bank's client base.
Allocation involves distributing resources for specific uses or spreading costs over multiple products, customers, people, or time periods.
Allocated benefits refer to the payments in a defined-benefit pension plan, where benefits are distributed to participants as premiums are received by the insurance company. This ensures that employees are guaranteed a pension at retirement, even if the firm ceases operations.
Allocation in accounting refers to the process of distributing resources, costs, or investments among various accounting entities or activities.
In management accounting, an allocation base is used to distribute costs to cost objects. A crucial component of both traditional costing systems and Activity-Based Costing (ABC), the allocation base plays a significant role in accurate cost allocation.
Allocation of Resources refers to the central subject of economics involving how scarce factors of production are distributed among producers and how scarce goods are distributed among consumers.
Allocative efficiency is an economic concept that occurs when resources are distributed in a way that maximizes the net benefit to society. It reflects a situation where goods and services are produced according to consumer preferences, and marginal cost equals marginal benefit.
Allodial refers to a system of land ownership where the property is owned freely and absolutely, without any obligation to a superior authority, nor subject to restrictions on alienation that existed under feudal law.
The allodial system is a legal framework granting full property ownership rights to individuals, forming the foundation for property rights in the United States.
A method of distributing previously unissued shares in a limited company in exchange for a contribution of capital.
Allotted shares are distributed to new shareholders through the process of allotment, forming part of the allotted share capital. They are essential for companies as they raise capital by issuing these shares to investors.
An allowable capital loss refers to the loss that an investor or taxpayer sustains from the sale or exchange of a capital asset, which the IRS permits to be deducted against capital gains when computing taxes.
An amount deducted from an invoice, given to an employee for expenses, or a deduction for tax purposes. Different types of allowances serve various functions in accounting and taxation.
The allowance for bad debts is an estimate of the accounts receivable that a company does not expect to collect. This estimation is used to anticipate potential losses and adhere to the accounting principle of conservatism.
Allowance for depreciation refers to the reduction in the book value of a fixed asset due to wear and tear, age, or obsolescence. It is an accounting term that allows businesses to allocate the cost of an asset over its useful life.
Allowance for Doubtful Accounts is a contra-asset account that estimates the portion of receivables that may not be collectible.
The total time in which a job should be completed at standard performance, inclusive of allowances for fatigue, rest, personal needs, and contingencies, commonly referred to as Standard Time.
Alpha measures the excess returns on an investment relative to the market returns. It represents the amount of return expected from fundamental causes like the growth rate in earnings per share. It contrasts with Beta, which measures volatility.
A measure of the expected return on a particular share compared to the expected return on shares with a similar beta coefficient, identifying the specific risk associated with a share as opposed to the systematic risk associated with securities of the same class.
Understanding the sampling risks in auditing, namely alpha risk and beta risk, which affect the accuracy of audit conclusions. Alpha risk involves rejecting a true population, while beta risk involves accepting a false population.
An alphanumeric character is any character that is either a letter (A-Z) or a numeral (0-9). These characters are commonly used in passwords, user IDs, and other digital identifiers.
Alt-A mortgages are residential property-backed loans made to borrowers who have better credit scores than subprime borrowers but provide less documentation than normally required for a loan application.
The term 'Alter Ego' refers to a legal doctrine that allows courts to disregard the distinct legal identity of a corporation and hold its shareholders or directors personally liable for corporate actions.
An increase, reduction, or any other change in the share capital of a company. Alteration of share capital includes processes like consolidation, subdivision, and cancellation of unissued shares.
The Alternate Valuation Date is a date six months after the date of a person's death. For estate tax purposes, the executor may choose to place a value on the estate either as of the date of death or on the alternate valuation date. To use the alternative valuation date, the estate value and tax must be less than on the date of death.
Alternative accounting rules under the Companies Act modify the historical-cost convention, allowing for the valuation of certain assets at current or market value.
Alternative budgets, also known as financial or quantitative budgets, are additional budgets created for consideration by management alongside their primary budget. These budgets reflect different policies that the organization might pursue in the future.
Alternative costs are the costs that would apply if an alternative set of assumptions were adopted, and they represent the benefits foregone when a second-ranked alternative is compared to the chosen alternative.
Alternative Dispute Resolution (ADR) encompasses various methods of resolving legal disputes without resorting to civil litigation. This includes processes like arbitration, conciliation, and mediation, which are often favored for their efficiency, cost-effectiveness, and less adversarial nature.
Alternative finance arrangements refer to specific lending structures compliant with Islamic law, as defined under UK Finance Acts, ensuring tax levies and reliefs align with traditional interest-based frameworks.
In statistical testing, an alternative hypothesis is accepted if a sample contains sufficient evidence to reject the null hypothesis. It is usually denoted by H₁. In most cases, the alternative hypothesis is the expected conclusion, which is why the test was conducted in the first place.
The Alternative Investment Fund Managers Directive (AIFMD) is a regulatory framework implemented by the European Union to oversee and regulate the management of alternative investment funds, enhancing investor protection and market stability.
A framework established by the European Union to regulate hedge funds and private equity firms, ensuring that they operate under supervision to mitigate systemic risk and protect investors.
The Alternative Investment Market (AIM) is a sub-market of the London Stock Exchange that gives smaller companies the opportunity to raise capital and gain visibility among investors.
The Alternative Investment Market (AIM) is a sub-market of the London Stock Exchange (LSE). Launched in June 1995 to replace the Unlisted Securities Market, AIM provides a platform for smaller, growing companies to raise capital and have their shares publicly traded without the significant costs and regulatory complexities associated with a full market listing.
Alternative investments refer to financial assets that fall outside the traditional categories of stocks, bonds, and cash. These can include tangible assets like art and real estate, as well as financial instruments like hedge funds and private equity.
A federal tax designed to ensure that wealthy individuals, estates, trusts, and corporations pay a minimum amount of tax regardless of deductions, credits, or exemptions.
An Alternative Mortgage Instrument (AMI) is any mortgage other than a fixed-interest-rate, level-payment amortizing loan. These instruments are often used to accommodate varying financial circumstances and offer different terms compared to traditional loans.
An overview of Alternative Trading Systems (ATS), platforms that allow trading securities outside of traditional exchanges, under regulatory oversight.
An Alternative Trading System (ATS) is a non-exchange trading venue that matches buyers and sellers to trade securities, usually through electronic means. It operates independently of the traditional stock exchanges and is often used to facilitate large block trades with minimally impacting the market.
Altman's Z-Score is a financial formula developed by Edward I. Altman in the 1960s that is used to predict the likelihood of a company entering bankruptcy within the next two years. Utilizing multiple corporate income and balance sheet values, this score provides an insight into the financial stability of a business.
Amalgamation is the combination of two or more companies into a single entity, either by acquisition, merging, or dissolution and reconstitution as a new company.
To accumulate an item such as money, property, or goods. A company may stock up on a commodity now for future sale when it believes that a sharp increase in the price of the commodity will take place at a later date.
The first prominent online retail (e-tail) merchant, Amazon.com, started as a bookstore in Seattle, Washington, and has since expanded to sell or facilitate the sale of a wide variety of products globally.
To change or modify a legal document, statute, contract, or pleading without completely abolishing its original form.
An amended tax return is a form filed as a correction, supplement, or replacement for an original tax return. For instance, individuals use Form 1040X, and corporations use Form 1120X, to claim refunds or rectify errors in prior year tax returns.
An amendment is an addition to or a modification of a legal document. When properly executed, it has the full legal effect of the original document.
In the field of real estate appraisal, amenities refer to the nonmonetary benefits that a property offers to its owner. These benefits can enhance the property's appeal and value without having a direct financial impact. Examples include pride in home ownership, scenic views, and accessibility to cultural or recreational activities.
America Online (AOL) is a pioneering commercial online service that has served as an entry point to the Internet for millions of home and business customers.
America Online, commonly known as AOL, played a pivotal role in the adoption of Internet services in the 1990s, offering dial-up service, online messaging, and various digital media services.
The American Accounting Association (AAA) is an influential organization consisting primarily of academic accountants. Founded in 1916, the AAA has significantly contributed to the development of accounting theory through publications, reports, and journals.
