Providing a secondary record, mechanism, or contract to safeguard against the potential failure of a primary system. Regular backups, especially for computer files, are a prudent practice.
A back-end load is a fee incurred by an investor when selling shares from a unit trust or investment trust, deterring short-term speculation and rewarding longer-term investment.
Back-to-back credit, also known as countervailing credit, is a method used to conceal the identity of the seller from the buyer in a credit arrangement. This finance technique involves a finance house acting as an intermediary between the foreign seller and the buyer.
A Back-to-Back Letter of Credit (L/C) is a secondary letter of credit issued to a different beneficiary, supported by a primary letter of credit. This financial instrument is used in complex, three-party transactions to provide assurance and liquidity to trading partners.
A back-up copy is a duplicate of information stored on a computer, made to prevent data loss or destruction. Essential for any business, ensuring continuity and data security through proper storage strategies.
Backdating refers to the practice of making documents, agreements, or payments effective from a date in the past. This is often done to reflect an earlier agreed-upon period for financial or employment purposes.
Backdating refers to the practice of marking a document, check, or other financial instruments with a date that precedes the actual date. It is often used in accounting, finance, and legal contexts.
Backflush accounting is a streamlined costing method designed for environments with minimal stock levels. It allocates costs retroactively to simplify accounting operations, especially suitable for Just-In-Time inventory systems.
The process of examining a job applicant's past to assess how well their experience and skills match those required for the position.
Background processing involves investigation by management of an employee's job history and personal references, ensuring that qualified personnel are placed in an organization. This process is also known as a background check.
The term 'Backlit' refers to anything illuminated from behind. It is a key feature in displays, particularly Liquid Crystal Displays (LCDs) used in notebook computers, to enhance visibility.
The value of unfilled orders placed with a manufacturing company. Analyzing whether a firm's backlog is rising or falling provides insights into its future sales and earnings.
Backlog depreciation refers to the additional depreciation charge that occurs when an asset is revalued, causing an increase in accumulated depreciation.
A backslash (\) is a character primarily used in computing to represent directory paths in Windows environments, escape sequences in programming languages, and also in specialized contexts like LaTeX formatting.
A computer security protection method whereby duplicate data files are stored on secondary storage devices to safeguard against data loss during catastrophic events.
Backup withholding is a procedure used to ensure that federal income tax is paid on earnings even though the recipient cannot be identified by a Social Security number. Banks, brokers, and other entities report nonwage earnings paid out on IRS Form 1099. When the form cannot be filed because it lacks the taxpayer's Social Security number, 28% (through December 31, 2012) of the interest, dividends, or fees is withheld by the payer and remitted to the federal government.
Backward Integration is the process whereby a firm purchases or creates production facilities needed to produce its goods, such as an automobile manufacturer that buys a steel mill.
Backward vertical integration is a strategic process where a firm takes ownership or increased control of its supply systems, aiming to streamline operations, better control costs, and eliminate intermediaries, thereby enhancing competitiveness in the marketplace.
A graphical representation illustrating how increases in wages can lead to a decrease in the amount of labor offered in the market, as individuals begin to substitute leisure for work.
BACs is the payment clearing system in the UK used for direct debits and B2B transactions. Known for its efficiency, BACs supports high-volume, reliable money transfers within the financial infrastructure.
A bad check is a check that cannot be processed due to insufficient funds or a closed account, also known as an NSF (Non-Sufficient Funds) check or rubber check.
Bad debt refers to an amount owed by a debtor that is unlikely to be recovered, such as when a company goes into liquidation. The full amount should be written off to the profit and loss account of the relevant period or to a provision for bad debts upon identification, in line with accounting prudence principles.
Bad debts recovered are those debts that were previously classified as bad and written off but later recovered either in part or in full. These recovered debts should be recorded back into the profit and loss account of the period, or relevant provisions.
A bad title is a purported title that is legally insufficient to convey property to the purchaser. While a title that is not marketable isn't necessarily a bad title, a bad title is inherently unmarketable and purchasers are generally not compelled to accept it.
Bad-debt recovery is the receipt of an amount, whether partially or in full, that had previously been written off as uncollectible. This often occurs after the debt has been removed from accounting records.
A Bad-Debt Reserve is an offset to Accounts Receivable, with amounts that can be expected to be uncollectible. Businesses use this reserve to account for receivables that are not likely to be collected.
The term 'badges of trade' refers to various factors considered by tax authorities to determine whether a given set of transactions constitutes a trade or business. This classification impacts how income from these activities is taxed.
A monetary guarantee that ensures an individual released from jail will attend future court appearances. Failure to appear results in forfeiture of the bond.
A bailee is a person who has temporary custody of the personal property of another. The degree of liability for such property can vary depending on the circumstances and the terms of the bailment agreement.
Bailee's Customers Insurance provides coverage for legal liability resulting from damage or destruction of bailor's property while under bailee's temporary care, custody, and control. It includes property on or in transit to and from the bailee's premises.
Bailment refers to the delivery of goods by the owner (known as the bailor) to a recipient (known as the bailee) under the agreement that the goods will be returned to the owner or otherwise disposed of according to the owner's directions. This arrangement can be made for various reasons such as lending, hiring, depositing for safekeeping, or pledging as collateral.
A bailor is the party who temporarily transfers possession of property to another party, known as the bailee, while retaining ownership.
A bailout is an effort by the government to provide sufficient financial assistance to prevent the failure of a specific private or quasi-private entity. The program may consist of loans or grants to satisfy outstanding debts or may involve government purchase of an equity position in the firm.
Bait and Switch Advertising is a method of consumer deception that involves advertising a product in an attractive way to lure customers in, followed by disparagement of the advertised product to cause the customer to switch to a more expensive product.
Bait and Switch Pricing is an illegal practice where retailers lure customers with unusually low prices for items, only to switch them to higher-priced items by claiming the advertised ones are unavailable or inferior.
A baker's dozen refers to the practice of including an extra item as a safeguard against potential penalties for short weight, thus totaling thirteen items instead of the standard twelve.
The amount representing the difference between the debit and credit sides of an account. It is brought down onto the opposite side of the account to ensure equal totals.
The Balance of Payments (BoP) is a comprehensive account setting out a country's economic transactions with the rest of the world, divided into key sub-accounts such as the current account and the capital account.
The balance of trade measures the difference in value over a period of time between a country's imports and exports of merchandise. A favorable balance, or trade surplus, occurs when exports exceed imports, while an unfavorable balance, or trade deficit, occurs when imports outweigh exports.
The practice of totaling the debit and credit sides of an account and inserting a balance to make them equal at the end of a financial accounting period.
The balance sheet, also known as the statement of financial position, is a vital financial statement that outlines a company's total assets and liabilities at a specific point in time, providing a snapshot of its financial health.
The value of an asset as represented on the balance sheet, detailing how various types of assets are recorded considering depreciation, amortization, and valuation methods like fair value accounting.
A Balance Sheet Audit focuses specifically on verifying the existence, ownership, valuation, and presentation of a company's assets and liabilities as stated in the balance sheet.
Also known as the accounting equation, the balance sheet equation is the foundational formula that forms the basis of double-entry bookkeeping: Assets = Liabilities + Equity. This equation ensures that a company's financial statements are balanced, indicating that all resources (assets) owned by the company are financed either by borrowing (liabilities) or by investing funds (owner’s equity).
Methods of presenting a balance sheet as set out in the Companies Act. Details the two formats available, vertical and horizontal, with specific disclosure requirements.
Balance sheet reserves are amounts set aside in pension plans and other insurance contracts, expressed as liabilities on the company's balance sheet, to ensure future benefit payments to policy owners.
Balance-Sheet Total refers to the total net worth of an organization, encompassing both fixed and current assets minus long-term liabilities. It is an important metric in financial reporting and is particularly relevant in the qualification criteria for small and medium-sized company exemptions.
A Balanced Budget is a financial plan where total revenues are equal to or greater than total expenditures, ensuring no deficits incurred during a particular accounting period.
A balanced mutual fund invests in a mixture of common stock, preferred stock, and bonds to achieve the highest possible return while maintaining a low-risk strategy.
An approach to management integrating both financial and non-financial performance measures into a comprehensive framework developed by Professors Kaplan and Norton.
The Balanced Scorecard (BSC) is a strategic planning and management system used by organizations to align business activities with the vision and strategy of the organization. It enhances internal and external communications and monitors organizational performance against strategic goals.
Balancing allowance is the allowance available on disposal of an asset when the proceeds are less than the written-down value for tax purposes. It compensates for the loss in value of the asset beyond its depreciation.
The charge that may be assessed to corporation tax on the disposal of an asset when the proceeds realized on the sale of the asset exceed the written-down value for tax purposes.
A balancing figure is inserted in accounting to ensure that the totals of both sides of the ledger are equal, typically when preparing a trial balance.
A balloon payment is a large, one-time payment made at the end of a loan term that is significantly larger than all previous payments. Often seen in both commercial and residential real estate financing, balloon payments also apply to business and personal loans.
A balloon payment is the final payment on a loan when that payment is significantly greater than the preceding installment payments and pays off the loan in full.
A balloon payment is a large sum repaid as an irregular installment in loan repayment, often seen as the final payment in loan structures where it is significantly larger than previous regular payments.
A balloon popup or balloon prompt is a type of message that appears on the Windows taskbar, typically in the shape of a balloon or cartoon speech bubble, informing the user about specific events or actions required.
The term 'ballot' refers to a system or method of voting, which can occur in various contexts such as elections, union representation decisions, and other instances where a collective decision is required.
In slang terminology, 'ballpark' refers to a general range or an approximate range of results or estimates. For instance, a 'ballpark figure' is a rough estimate.
Bancassurance (also known as Allfinanz) refers to the combination of traditional banking products with insurance products, such as life assurance and pensions. This practice allows banks to offer a comprehensive range of financial products and services to their customers under one roof.
The Band of Investment is a finance and investment principle that refers to the weighted average of debt and equity rates used to estimate the cost of capital for a business or project.
A Band-Aid treatment refers to addressing only the symptoms of a problem rather than focusing on the underlying cause. This approach often provides a temporary fix but not a long-term solution.
A commercial institution that takes deposits and extends loans, concerned mainly with making and receiving payments, accepting deposits, and making short-term loans to private individuals, companies, and other organizations.
A bank aggregator is a service or a platform that consolidates information from multiple bank accounts into a single, unified interface, facilitating ease of access and management of finances.
A bank certificate is a document signed by a bank manager that certifies a company's account balance on a specified date. It is often requested during audits to verify a company's financial status.
A bank charge refers to the amount charged to a customer by a bank for specific transactions, such as depositing a cheque or making a withdrawal from an automated teller machine (ATM). While personal account holders may frequently enjoy periods of commission-free banking, business customers usually incur various tariffs.
A Bank Confirmation is a request made by an auditor to a bank to confirm details related to an audit client's bank accounts, assets held by the bank, and associated financial information.
A bank deposit is a sum of money placed by a customer with a bank, which may attract interest and have specific accessibility terms. Deposits allow banks to extend loans to other customers, existing mainly on paper in the bank's books.
A bank draft, also known as a banker's cheque or banker's draft, is a cheque drawn by a bank on itself or its agent. It is commonly used when a creditor needs assurance that the cheque will not be dishonoured.
Bank float refers to the time interval between when a check is written and when it's actually cleared in the payer's bank, during which the funds are not available to either the payer or the payee.
An international bank that fosters cooperation among central banks and other agencies in pursuit of monetary and financial stability. Originally established to coordinate reparations payments post-WWI, the BIS now plays a key role in facilitating central bank cooperation and setting standards for global banking.
The Bank for International Settlements (BIS) aims to promote global monetary and financial stability through international cooperation among central banks and financial supervisory authorities.
A preprinted paper slip used to pay cash or cheques into a specified bank account. It is commonly found at the back of chequebooks and utility bills.
Bank Giro Credit (BGC) is a method used to transfer funds electronically from one bank account to another, often used for personal payments, utility bills, and other financial transactions.
A bank holding company is an entity that owns or controls two or more banks or other bank holding companies. These companies must register with the Board of Governors of the Federal Reserve System, making them registered bank holding companies.
Bank interest refers to the cost incurred by a borrower for the privilege of using funds from a financial institution. This charge is calculated based on the daily cleared overdraft balance or a committed loan, with the interest rate typically consisting of the base rate plus an additional percentage ranging from 1% to 5%.
A bank line, also known as a line of credit, refers to a bank's moral commitment to lend to a particular borrower up to a specified maximum during a specified period, usually one year. Unlike a legal commitment, it does not involve charging a commitment fee.
A bank loan, also known as a bank advance, is a specified sum of money lent by a bank to a customer for a specific period at a specified rate of interest.
A bank mandate is a formal document issued by a bank customer that authorizes the bank to perform specific transactions on the customer's behalf, including opening an account, honoring cheques, and validating other payment orders.
Bank money refers to the currency created by commercial banks through the process of lending, utilizing the deposits they receive under a fractional reserve banking system.
The central bank of the United Kingdom, responsible for setting monetary policy, providing financial stability, and serving as the government's bank.
A bank overdraft occurs when an account holder withdraws more money than is available in their bank account, creating a negative balance.
The interest rate at which a nation's central bank lends money to domestic banks or the rate at which domestic banks can borrow from the central bank.
A bank reconciliation statement reconciles the bank balance in an organization's books with the bank statement. Differences may arise from cheques drawn by the organization but not yet presented to the bank, bank charges deducted from the account not yet notified to the organization, and payments made to the bank but not yet recorded by the organization. Bank reconciliations are usually performed weekly or monthly and serve as a form of internal control.
A Bank Report is a document generated by a banking institution at the request of an auditor to provide detailed information regarding a business's transactions and interactions with the bank over a specified period.
A bank statement is a document provided periodically by a bank to account holders detailing all the credit and debit transactions made to their account over a specified period. It serves as an important tool for tracking account activity and managing finances.
A bank transfer is a method of transferring funds from one bank account to another, either within the same financial institution or between different institutions, through electronic means.
A specialized division within a bank engaged in settling estates, administering trusts and guardianships, and performing various agency services, known for a conservative investment philosophy.
A Banker's Acceptance (BA) is a time draft drawn on and accepted by a bank, commonly used to effect payment for merchandise sold in import-export transactions, and a significant source of financing used in international trade.
A banker's cheque, also known as a bank draft, is a payment instrument issued by a bank on behalf of a payer, which provides a guarantee of the funds because the bank holds the amount before issuing the cheque.
The banker's discount is the discount calculated by a bank when purchasing a bill of exchange before its maturity.
A banker's draft, also referred to as a bank draft, is a payment on behalf of an individual that is guaranteed by the issuing bank.
A banker's order is an instruction issued by a bank customer, directing their bank to transfer a specified amount from their account to another account at regular intervals until the order is cancelled.
A banker's payment involves a bank draft drawn in favor of another bank to settle business between the two banks.
A banker's reference, also known as a status enquiry, is a report on the creditworthiness of an individual supplied by a bank to a third party. Such reports are often used by financial institutions or customers seeking insight into the financial reliability of individuals or entities.
A standardized time measurement convention used in financial computations, where each month is assumed to have 30 days and the year 360 days.
Directives on various aspects of banking practice issued by the EU Parliament and Council of Ministers.
Bankruptcy is the state of an individual or entity unable to pay off their debts. A court-ordered bankruptcy order leads to the liquidation of the bankrupt's assets to repay creditors.
A specialized court established by Congress, pursuant to Article I of the Constitution, to address matters arising in or under a bankruptcy case.
