A type of short-term financing extended by a seller who does not require immediate payment after delivery of merchandise.
What is trade credit?
100
This occurs when a corporation sells common stock to the general public for the first time.
What is an initial public offering (IPO)?
100
A promissory note that requires a borrower to repay a loan in monthly, quarterly, semiannual or annual installments.
What is a term-loan agreement?
100
A sum of money to which deposits are made each year for the purpose of redeeming a bond issue.
What is a sinking fund?
100
The movement of money into and out of an organization
What is cash flow?
200
A condition of a short-term bank loan that requires the firm to keep a certain amount of funds on deposit at the bank, typically 10-20% of the borrowed funds.
What is a compensating balance?
200
The market in which an investor purchases financial securities (via an investment bank) directly from the issuer of the securities.
What is the primary market?
200
The use of borrowed funds to increase the return on owners' equity.
What is financial leverage?
200
A bond that is secured by various assets of the issuing firm, such as real estate, machinery and equipment.
What is a mortgage bond?
200
A financial statement that estimates cash receipts and cash expenditures over a specified period
What is a budget?
300
A short-term promissory note secured only by the reputation of the issuing firm.
What is commercial paper?
300
A network of dealers who buy and sell the stocks of corporations that are not listed on a securities exchange.
What is the over-the-counter (OTC) market?
300
A corporation's written pledge that it will repay a specified amount of money with interest by a specified date.
What is a corporate bond?
300
A legal document that details all the conditions relating to a bond issue.
What is a bond indenture?
300
The lowest interest rate charged by a bank for a short-term loan
What is the prime interest rate?
400
A firm that specializes in buying other firms' accounts receivable.
What is a factor?
400
The most basic form of corporate ownership.
What is common stock?
400
An individual or independent firm (usually a commercial bank or other large financial institution) that acts as the bond owner's representative.
What is a trustee?
400
Bonds of a single issue that mature on different dates.
What are serial bonds?
400
A budgeting approach in which every expense in every budget must be justified
What is zero-base budgeting?
500
A written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date.
What is a promissory note?
500
The portion of a corporation's profits not distributed to stockholders.
What is retained earnings?
500
The type of long-term financing that generally has the highest ongoing costs.
What is a long-term loan?
500
A bond that can be exchanged, at the owner's option, for a specified number of shares of the corporation's common stock.
What is a convertible bond?
500
The time lag between the actual production of goods and when the goods are sold