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• Account � in the context of bookkeeping, refers to the ledger pages upon which various assets, liabilities, income, or expenses are represented. In the context of investment banking, this refers to the status of any securities sold and owned, or the relationship between parties to an underwriting syndicate. In the context of securities, the relationship between a client and a broker/dealer firm allowing the firm's employee to be the client's buying/selling agent.


• Acceptance � a contractual agreement instigated when the drawee of a time draft accepts the draft by writing the word "accepted" thereon. The drawee assumes responsibility as the acceptor and for payment at maturity.


• Account balance � the credits minus the debits at the end of a company�s reporting period.


• Account debt � Refers to the customer of a factor's client or the company that actually owes the money due on the invoice(s).


• Account statement � in the context of banking, this refers to a summary of all account balances. In the context of securities, it is a summary of all the transactions and positions, both long and short, between a broker/dealer and a client and a client.


• Accounting earnings � the earnings of a company as reported on the income statement.


• Accounting exposure � the change in the value of a firm's foreign currency-denominated accounts due to changes in any exchange rates.


• Accounting insolvency � when the total liabilities exceed the total assets. A company with a negative net worth is considered insolvent.


• Accounting liquidity � the ease and quickness with which any assets can be converted to cash.


• Accounts payable � money that is owed to suppliers.


• Accounts receivable � money that is owed by customers.


• Accounts receivable turnover � ratio of net credit sales to the average accounts receivable. This is a measure of how quickly customers pay bills.


• Accrual basis � in the context of accounting, practice in which expenses and income are accounted for as they are earned or incurred, whether or not they have been received or paid.


• Accrued discount � the interest that accumulates on savings bonds from the date of purchase until the date of redemption or final maturity - whichever comes first.


• Accrued interest � When applied to convertible securities, this is the interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security. At the time of sale, the buyer pays the seller the bond�s price plus any interest accrued through the settlement date of the sale, calculated by multiplying the coupon rate by the fraction of the coupon period that has elapsed since the last payment.


• Acquisition � when one firm purchases another firm.


• Active income � income from an active business as opposed to passive investment income, according to U.S. tax codes.


• Adjustable rate�applies to convertible securities and the interest rate or dividend adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on treasury notes or bonds.


• Accounting liquidity � the ease and quickness with which any assets can be converted to cash.


• Accounts payable � money that is owed to suppliers.


• Accounts receivable � money that is owed by customers.


• After tax profit margin�the ratio of net income to net sales.


• Agency bank � a form of organization commonly used by foreign banks to enter the U.S. market. An agency bank cannot accept deposits or extend loans in its own name; it acts as agent for the parent bank.


• Aging schedule � a table of accounts receivables that are broken down into age categories (such as 0-30 days, 30-60 days, and 60-90 days), which is used to determine if customer payments are on schedule.


• Amortization � loan repayment by installments.


• Annual basis � a technique in statistics of taking a figure covering a period of less than one year and extrapolating it to cover a full one-year period. The process is known as annualized. Annual percentage rate (APR)�the periodic rate times the number of periods in a year. (A 5 percent quarterly return has an APR of 20 percent.)


• Annual percentage yield (APY) � the effective or true annual rate of return. The APY is the rate actually earned or paid in one year, taking into account the affect of compounding. The APY is calculated by taking one plus the periodic rate and raising it to the number of periods in a year. For example, a 1% per month rate has an APY of 12.68% (1.01^12).


• Annual rate of return�One of the ways of calculating the annual rate of return. If the rate of return is calculated on a monthly basis, we sometimes multiply this by 12 to express an annual rate of return. This is often called the annual percentage rate (APR). The annual percentage yield (APY) includes the effect of compounding interest.


• Annual report � the annual record of a publicly held company's financial condition. It includes a description of the firm's operations, its balance sheet and income statement. The SEC rules require that it be distributed to all shareholders. A more detailed version is called a 10-K.


• Anticipation � arrangements whereby customers who pay before the final date may be entitled to deduct a normal rate of interest.


• Antitrust laws � legislation established by the federal government to regulate trade and prevent the formation of monopolies.


• Articles of incorporation � the legal document establishing a corporation and its structure and purpose.


• Asset � a company�s possession or productive resources that has value in an exchange.


• Asset classes � categories of assets, such as stocks, bonds, foreign securities or real estate.


• Assumption � becoming responsible for the liabilities of another party.


• At risk � exposure to the danger of economic loss when used in the context of claiming tax deductions.


• Audit � the examination of a firms books and accounting records usually conducted by an outside professional in order to determine whether the company is maintaining records according to generally accepted accounting principles.


• Auditor's report � section of a company�s annual report including the auditor's opinion about the veracity of any financial statements.


• Automated Clearing House (ACH) � a collection of 32 regional electronic interbank networks used to process transactions electronically with a guaranteed one-day bank collection float. Automatic funds transfer�transfer of funds from one account or an investment vehicle to another using telecommunications or electronic technology.


• Availability float � checks deposited by a company that have not yet been cleared.Average age of accounts receivable�the weighted-average age of all of the firm's outstanding invoices. Average collection period, or days' receivables�the ratio of accounts receivables to sales, or the total amount of credit extended per dollar of daily sales.


• Average rate of return (ARR) � the ratio of the average cash inflow to the amount invested.