-NeeBo Glossary-

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• Passive activity � An activity in which an individual does not materially participate such as real estate rentals and limited partnerships.


• Passive loss � Loss from a passive activity, which limits the amount of passive loss an individual can deduct to the total of other income from passive activities.


• Payables � A term for creditors.
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• Payment cap � A limit on the size of the monthly payment of an adjustable-rate mortgage or other variable rate loan.


• Payee � The person to whom a payment is made.


• Payer � The person who makes a payment to a payee.


• Payroll taxes � the tax based on wages, tips and salaries paid. A portion of this tax is deducted from the employee's paycheck while the rest is paid by the employer.


• Partnership � A business in which two or more individuals carry on a continuing business for profit as co-owners; or an agreement between businesses to pursue some objective jointly called a joint venture.


• Penalty � A fine charged by the IRS for paying or filing your taxes late. You may be charged interest in addition to penalties. Tax penalties are not deductible.


• Pension fund � Set up by a company, union, government entity, or other organization to invest the pension contributions of members and employees, then to pay out pensions to them.


• Periodic rate � The interest rate described in relation to a specific amount of time. The monthly periodic rate, for example, is the cost of credit per month; the daily periodic rate is the cost of credit per day.


• Per item charge � A fee charged to an account holder who has exceeded the number of free transactions allotted to the described account and/or the balance in the account did not meet the average monthly balance required to waive the fee.


• Performing loan � When the borrower is still keeping up with the loan�s interest payments.


• Personal Guarantee - A guarantee that the primary owner will assume personal responsibility for repayment of the loan, should the company not repay the loan.


• Petty cash � Cash held by a company on its premises to cover small expenses with a record usually kept in a petty cash book.


• Ponzi scheme � A fraudulent investment scheme promising high returns achieved only by using the inflow of new money rather than investment decisions. Named after Charles Ponzi, an Italian immigrant to the US who promised to double investors money in 90 days.


• Prime Rate - The rate a lender charges its best customers. The rate is calculated differently by each lender.


• Purchase Order Financing � The assignment of purchase orders to a third party, such as a factoring company, who assumes the obligation of billing and collecting. This form of financing is tied to a specific transaction where the company requires cash to be able to acquire the raw materials to manufacture the goods for which it has received the purchase order.