A contract is a legally binding agreement that arises from an offer and acceptance, meeting certain legal criteria and compliance for enforceability.
A contract carrier is a transportation service that accepts people or goods from one or more shippers under an agreement for compensation, typically providing specialized services and equipment tailored to meet the unique needs of its customers.
Contract cost refers to the total cost incurred in fulfilling a long-term contract, typically calculated using contract costing techniques.
Contract costing is a costing technique used for long-term contracts like civil engineering projects, where costs are allocated on a contract-by-contract basis. It addresses the complications in determining annual profits for incomplete contracts through the valuation of work in progress.
A financial derivative that allows traders to speculate on the price movement of underlying assets without owning them.
A derivative contract in which one party agrees to pay another the difference between the current value of an underlying asset and the value at the time the contract was made.
A contract undertaken by a self-employed individual, distinguishing it from a contract of employment. Understanding the distinction is crucial for tax purposes.
The contract interest rate, also known as the face interest rate or nominal interest rate, is the stated annual interest rate on a loan or bond, before any adjustments for compounding or inflation.
A Contract of Employment defines the relationship between an employer and an employee, outlining duties, control measures, and compensation.
A contract of indemnity in property and liability insurance aims to restore the insured to their original financial condition after suffering a loss, without allowing for profit from the loss.
The contract price in an installment sale, for tax purposes, is generally defined as the selling price less the existing mortgages assumed by the buyer. This definition is crucial for correctly determining the taxable portion of payments received from the sale.
The contract rate, also known as the face interest rate, refers to the interest rate stated on a financial instrument, such as a bond or loan, which dictates the amount of interest the issuer will pay periodically to the holder.
Contract Rent refers to the amount of rent that has been explicitly stipulated in a lease agreement between a tenant and a landlord.
In the context of finance and economics, contraction can refer to various scenarios including the distribution of assets and economic downturns. It is important to distinguish these different contexts to understand the implications fully.
A contractor is an individual or company who contracts to do work for another party. Independent contractors take on specific tasks while maintaining control over the means and methods of executing the job.
Contrarian investing is a strategy that involves going against prevailing market trends by buying assets that are performing poorly and selling those that are performing well. Contrarian investors believe that markets often overreact to news and developments, leading to opportunities for buying low and selling high.
Contributed capital, also known as paid-in capital, refers to the total value of cash and other assets that shareholders have directly invested in a company in exchange for stock. This equity portion represents funds that are raised and used for the growth and operational needs of the business.
A financial statement that presents income using the marginal costing layout, emphasizing the distinction between variable and fixed costs, and aids in understanding the profitability of products based on contribution margins.
The contribution margin is a key metric in marginal-costing systems, helping organizations determine the additional profit earned when production surpasses the breakeven point.
The contribution margin ratio, also known as the contribution-to-sales ratio, production-volume ratio, or profit-volume ratio, is a financial metric that shows the relationship between a product’s contribution margin and its sales value. This ratio is essential for ranking products based on their relative profitability.
In cost accounting, Contribution Profit Margin is the excess of sales price over variable costs. It provides an amount to offset fixed costs, thus contributing to gross profit.
Contribution to capital refers to the funds or assets provided by shareholders or owners to a company, which increases the company's equity but does not constitute income for tax purposes.
Contributions in the context of finance and taxation refer to payments made by individuals or businesses, either for charitable purposes or as required unemployment taxes. Understanding the implications of these contributions is crucial for effective financial planning.
A principle of law recognizing that injured persons may have contributed to their own injury. This concept can significantly impact the ability to recover damages in personal injury cases.
A contributory pension is a type of pension scheme where both the employee and the employer contribute to the employee's pension fund.
A contributory pension plan is a retirement savings plan in which both the employee and employer contribute funds. These plans are designed to provide financial security to employees after retirement by pooling resources from both parties.
A control account is a general ledger account that summarizes the total balances of subsidiary ledgers, ensuring accuracy and efficiency in financial reporting.
Control accounts are ledger accounts structured to equal the aggregate balances of a large number of subsidiary accounts, serving functions such as consolidating data and providing cross-verification of subsidiary record accuracy.
Control refers to the ability of one entity to direct the financial and operating policies of another entity or to obtain the economic benefits from an asset. This term is central to the consolidation of financial statements and the conceptual framework for financial reporting.
A control key on a computer keyboard functions primarily in combination with other keys to execute specific commands. On PC keyboards, these include the Ctrl and Alt keys in addition to the Shift key. The Apple equivalents are the Command and Option keys.
A control period is the span of time for which budgeted figures are compared with actual results. Splitting up the financial year into control periods makes control of the financial figures more manageable.
An amount paid above the average market value of shares to gain enough ownership to set policies, direct operations, and make decisions for a business. Contrast with Minority Discount.
Control risk, also known as internal control risk, refers to the possibility that misstatements in a company's financial statements will not be prevented or detected on a timely basis by the internal control system. It is an essential component of audit risk and requires an in-depth assessment during the auditing process.
The principle that managers should only be held responsible for the costs and investments they have the ability to influence directly. Understanding and applying the controllability concept is crucial for effective managerial accountability and performance evaluation.
Controllable Contribution refers to the sales revenue of a division, less those costs that are controllable by the division's manager. It is a key metric for assessing the performance of divisional managers.
Controllable costs are expenses that can be directly influenced and managed by a particular level of management. Responsibility is assigned to specific personnel who can influence these costs within an organization.
A measure of the capital employed that is under the direct influence of a divisional manager, used to accurately assess performance.
In standard costing or budgetary control, a controllable variance is a variance regarded as controllable by the manager responsible for that area of an organization. The variance occurs as a result of the difference between the budget cost allowance and the actual cost incurred for the period.
A controlled corporation is a company whose policies and major decisions are determined by another firm, which owns more than 50% of its voting shares.
A controlled economy is a type of economic system where the government exerts significant control over production, distribution, and consumption of goods and services, rather than relying on market forces. This model is often associated with socialist and communist economies.
A Controlled Foreign Company (CFC) is a foreign-based corporation that is controlled by residents of the home country, allowing individuals or companies to potentially shift profits and reduce their tax liabilities.
A Controlled Group is defined as two or more corporations whose stock is substantially held by five or fewer persons. Included in this category are brother-sister groups, parent-subsidiary groups, combined groups, and certain insurance companies. These corporations are subject to special rules for computing income tax, the alternative minimum tax (AMT) exemption, the accumulated earnings credit, and the environmental tax exemption.
In the USA, the chief accounting executive of an organization responsible for financial reporting, taxation, and auditing but typically leaving the planning and control of finances to the treasurer.
An interest in a company that gives a person or another company control of it, usually through ownership of more than half the voting shares. Controlling interest can also be achieved with fewer shares if they are widely dispersed.
CONUS stands for the Continental United States, referring specifically to the 48 contiguous states and the District of Columbia. This designation is often used in federal regulations to differentiate from OCONUS, which includes Alaska, Hawaii, and other U.S. territories.
Convenience food refers to processed food products and prepared meals designed for fast and easy consumption, appealing to individuals who lack the desire or time to cook.
Frequently purchased consumer items that provide convenience in terms of time savings and utilitarianism. Examples include hair spray, shaving cream, and tissues.
Convenience sampling is a non-probability sampling method where the sample is taken from a group that is easy to access or contact.
A convenience store primarily trades on the convenience it offers to customers. The products stocked may be influenced by local tastes or ethnic groups, and the stores often have extended hours and are conveniently situated in residential areas. They are often part of a chain.
In accounting, a convention refers to a general agreement, customary practice, or accepted norm that is followed by accountants in the preparation and presentation of financial statements. Accounting conventions aim to provide consistency and comparability across financial statements.
A conventional mortgage is a residential mortgage loan that is not insured by the Federal Housing Administration (FHA) or guaranteed by the Veterans Administration (VA). It often refers to a mortgage with a fixed term and a fixed rate.
Conversion is the tort equivalent to the crime of theft. It involves the unauthorized taking or use of someone else's property and can result in damages being awarded to the rightful owner.
The costs incurred in a production process as a result of which raw material is converted into finished goods. The conversion costs usually include direct labor and manufacturing overheads but exclude the costs of direct material itself.
Conversion parity is a concept in finance that refers to the equivalence between the value of a convertible security, such as a convertible bond, and the value of the common stock into which it can be converted.
The dollar value at which convertible bonds, debentures, or preferred stock can be converted into common stock; announced when the convertible security is initially issued.
The conversion ratio is a relationship that determines how many shares of common stock will be received in exchange for each convertible bond or preferred share when the conversion takes place.
A conversion right is a provision under the terms of a debenture trust deed that provides the investor with an option to convert their debt into equity.
A converter is an active real estate entrepreneur who changes the ownership and/or physical configuration of property.
A currency for which there are no barriers or restrictions in the foreign exchange market, allowing it to be freely exchanged for other currencies.
Convertible securities can be crucial financial instruments for both investors and companies, offering the potential for conversion into common stock under specific conditions.
Convertible Term Life Insurance is a type of life insurance coverage that can be converted into permanent insurance regardless of the insured's physical condition, and without a medical examination.
Convertibles are corporate securities, typically preferred shares or bonds, that are exchangeable for a set number of another form, commonly common shares, at a preset price.
In real property law, 'convey' refers to the transfer of property from one party to another through a written instrument and other necessary formalities.
Conveyance refers to the act of transferring the title of real estate property from one party to another. This term can also denote the medium or method used to effect such transfer.
Conveyancing is the legal process of transferring property ownership from one person to another. It involves a series of administrative and legal checks to ensure the transaction is legitimate and secure.
To falsify financial records or statements with the intention of misleading others about the financial performance or financial position of an accounting entity.
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A cooling-off period is an interval designated by regulation or agreement, during which specific actions, such as the launching of securities to the public or striking by a union, are prohibited to provide time for due consideration and resolution.
A cooperative, commonly known as a co-op, is a type of corporate ownership of real property where stockholders of the corporation are entitled to use a certain dwelling unit or other units of space. It can also be an organization for the production or marketing of goods owned collectively by members who share the benefits.
A cooperative, or co-op, is a real estate arrangement where tenants or members own shares in a corporation that owns the building, and often entails collaboration between agents in real estate transactions.
Cooperative advertising, often referred to as co-op advertising, is a cost-sharing arrangement where manufacturers and retailers or distributors collaborate to promote a product or brand. This mutually beneficial strategy leverages the strengths and resources of both parties to optimize marketing efforts and expand market reach.
Cooperative Advertising, also known as co-op advertising, is a strategic partnership between manufacturers and retailers where the manufacturer provides financial support to the retailer for advertising expenditures. This collaboration aims to boost the brand and sales of both parties by combining resources and efforts in advertising campaigns.
Computer software that cannot be fully copied by the software tools normally used for such purposes, designed to prevent unauthorized duplication.
Copyright is the protection granted by statute or by the common law, giving artists and authors exclusive rights to publish their works or to determine who may do so.
The term 'core' has multiple definitions across various fields including technology, economics, and hardware, among others. This article provides a detailed definition, examples, frequently asked questions, related terms, and suggested resources for further study.
Core competence refers to a distinctive employee, product, or service capability that leads to a long-term organizational advantage.
Core inflation is the measure of inflation which excludes certain volatile items, usually food and energy, to provide a clearer picture of the long-term inflation trend.
Core values are the fundamental beliefs or guiding principles of an organization or individual. These values dictate behavior and help in decision-making, setting a foundation for organizational culture and personal conduct.
A statistical geographic entity comprised of at least one core area with a population of at least 10,000 people, along with adjacent counties that have high social and economic integration with the core.
A corner lot is a parcel of land that is bounded on at least two sides by the intersection of two roads. Corner lots are often considered more valuable because they offer greater visibility and ease of access.
An illegal practice of purchasing a security or commodity in such volume that control over its price is achieved.
A corporate acquisition involves one company purchasing most or all of another company's shares to gain control of that company, which can lead to significant structural and operational changes.
A Corporate Bond is a debt instrument issued by a private corporation, as distinct from one issued by a government agency or a municipality. Corporate bonds typically have three distinguishing features: they are taxable, have a par value of $1,000, and have a fixed maturity.
A corporate campaign is a program of coordinated advertisements aimed at improving a business's corporate image rather than specifically promoting the company's products or services.
A corporate charter is a legal document that establishes a corporation's existence and outlines its basic operational structure, rights, and responsibilities. Also known as articles of incorporation, it is filed with the state government and includes key details about the corporation.
Corporate culture refers to the general organizational operating environment, including ethical and value structures, impacting employees, management, and customer relations, as well as the types of products and services the organization produces, and the approaches to production, marketing, advertising, and service quality.
The use of various techniques to assess whether a company is likely to go into liquidation, utilizing models such as Altman's Z score and Argenti's failure model based on financial statements.
Corporate governance refers to the system by which companies are directed and controlled, focusing on the structure and relationships that determine corporate performance and accountability.
A code of best practice in corporate governance that outlines expected standards for UK's listed companies, originally issued with the Hampel Report of 1998.
An individual within a corporation who has access to privileged, non-public information about the company’s activities, often due to their significant shareholding or role within the company.
Corporate modelling involves the use of simulation models to assist the management of an organization in planning and decision-making. A budget is a quintessential example of a corporate model.
Corporate Performance Management (CPM) encompasses the methodologies, metrics, processes, and systems used to monitor and manage the business performance of an enterprise. CPM is a form of business intelligence used to gauge and manage organizational performance to achieve strategic goals and corporate initiatives.
Corporate reorganization involves significant changes in the structure of a corporation through mergers, acquisitions, divisive acquisitions, or other forms of restructuring.
Corporate reports are comprehensive packages of information that describe the economic activities of an organization. For limited companies, these typically take the form of annual reports and accounts, aimed at providing stakeholders with a detailed view of the company's financial health.
Corporate social reporting involves the disclosure of an organization's performance in social, environmental, and ethical dimensions. It reflects a company's commitment to social responsibility and transparency to stakeholders.
The notion that a company has responsibilities to society that go beyond its legal obligations and its duties to shareholders. CSR includes a company's impact on the environment, ethical issues, and internal policies regarding transparency and fair treatment of employees.
Corporate Social Responsibility (CSR) is a business model in which companies integrate social and environmental concerns in their operations and interactions with stakeholders.
Corporate strategic planning is a management process involving the determination of the basic long-term objectives of an organization and the adoption of specific action plans to attain these objectives. It encompasses the analysis of the environment, establishing objectives, performing situational analyses, selecting alternative strategies, and implementing and monitoring the strategic plans.
Setup of an organization in terms of departments and agencies; distribution and delegation of functional responsibilities throughout an organization. Reacting to a complex environment of business, the modern organization has become very complex, usually having many departments with a wide array of responsibilities.
The corporate veil is a legal concept that separates the actions and liabilities of a corporation from its shareholders or officers, offering them protection against personal liability. Courts may pierce the corporate veil to hold individuals accountable for a corporation's actions.
