Call loanLoans which are repayable on demand.
CapA means to limit capital use in assets.
Capital GainRepresents the gain generated through the disposal of an asset.
Capital marketIs the generalised term used to describe the market of debt and equity securities.
Capital rationingAssesses a mixture of projects that can provide the highest overall net present value (NPV) when a company has a limit on capital spending.
Capital reductionInvolves the reduction of a company’s declared or stated capital base.
Capital ReserveIs a fund that has been set aside for a specific purpose. It cannot be used for anything else.
Capital structureThe financing components of a company, including ordinary and preference shares, debentures and loan stock.
Capitalised interestRefers to the interest cost incurred whilst an asset is being prepared for its intended use.
Capitalised leaseIs a type of lease which is recorded as an asset acquisition which is then accompanied by a corresponding liability by the lessee.
Carrying valueIs the amount that an asset or a liability is recorded on a balance sheet.
Cash basisA type of bookkeeping that notes down when revenues and expenditures are received and paid.
Cash cowSegment of the business that generates a large quantity of money.
Certificate of deposit (CD)A type of formal instrument that is issued by banks when a deposited fund is not withdrawn for a length of time. Early withdrawals can result in a cash penalty.
Certified financial plannerA trained individual who can successfully implement financial plans for clients using knowledge based around income/estate tax, investments and risk management analysis.
Chart of accountsRefers to the list of accounts appearing in the nominal ledger. The list is usually arranged in the order accounts appear in the financial statements.
Clearing accountIs a temporary holding account that contains costs/amounts that at a specified date are to be transferred to another account i.e. income summary account that contains revenue and expense amounts that are to be transferred to retained earnings at the end of a fiscal period.
Clearing HouseInstitution whereby interbank indebtedness is computed, and net amounts owing can be calculated.
Coding of accountsInvolves the assignment of an identification number to every account in the financial statements.
Collection periodRepresents the number of days needed to collect accounts receivable. The length of this period is determined by the rate of turnover a company has.
Commercial bankA financial institution that provides a commercial banking service, including accepting bank deposits and offering business loans, to individuals and companies.
Compensating balancesA deposit that banks can use to offset an unpaid loan.
Compound interestProcess of adding back interest earned on an investment to the original investment, thereby increasing the principle on which further interest is calculated.
Consistency ConceptRepresents the uniformity of accounting concepts and procedures used by an entity in the preparation of financial statements.
ContraEntry made to offset or nullify a previous entry.
Control accountAccount which gives summary to the balance of all accounts on another ledger.
Convertible BondA bond that can be converted into shares of the issuing company.
Corporate cultureValues and beliefs held by people within an organisation
Corporation taxTax payable by a company on its profits.
Cost accountingFocuses on the cost accumulation used for inventory valuations that are needed for external reporting and internal profit measurement.
CouponAnnual rate of interest paid by the issuer of a bond until maturity.
CovenantA formal agreement that some act will or will not be carried out, e.g. a promise to pay interest.
CPI (Consumer Price Index)Index that tracks the prices of a variety of goods purchased by an average consumer.
Credit controlMethods used to ensure customers settle their accounts within the agreed time period.
Credit crunchSituation occurring when the supply of money cannot keep pace with demand.
Credit default swapSpecific kind of counterparty agreement allowing the transfer of third party credit risk from one party to the other.
Credit derivativeFinancial instrument used to mitigate or to assume specific forms of credit risk, often to separate the credit risk of a borrower from overall market risk.
Credit ratingRating used by financial institutions making loans which they use to judge an individual or company’s credit worthiness.
Credit Ratings AgencyAn agency that rates the creditworthiness of companies based on detailed financial information.
Credit riskThe risk that an issuer might default on a payment or go into liquidation.
CreditorIndividuals/organisations owed money.
Creditor daysRatio measuring the average period it takes an individual/company to pay its creditors. It is calculated by dividing trade creditors by its cost of sales and then multiplying by the number of days in the financial period in question.
Cumulative preference sharesWhen a company fails to pay a dividend, holders of cumulative preference shares are entitled to receive this missed payment when a dividend is next declared.
Currency hedgingA technique used to guard against foreign exchange fluctuations.
Currency riskThe potential for losses arising from adverse movements in a currency.
Currency swapArrangement in which two parties exchange a series of cash flows in one currency for another, at agreed intervals over an agreed period.
Current assetsAssets that are regularly turned over and can be readily converted into cash, including debtors and stocks.
Current liabilitiesLiabilities owed by a company that are due for settlement within 12 months, including trade creditors and bank overdrafts.
Current ratioIs a measurement of liquidity where current assets are divided by current liabilities. This is commonly used to measure short-term solvency.
Current yieldThe annual interest rate paid by a bond, expressed as a percentage of its current market price.
Cut-off rateA set maximum/minimum rate that is susceptible to – in this circumstance – rates which cannot be exceeded on either end.