Dictionary_of_Banking_and_Finance
.pdfDictionary of
third edition
A & C Black London
www.acblack.com
Originally published by Peter Collin Publishing in 1991
Second edition published 1999
Third edition published 2003
Reprinted 2005
A & C Black Publishers Ltd
38 Soho Square, London W1D 3HB
©P. H. Collin 1991, 1999
©Bloomsbury Publishing Plc 2003
©A & C Black Publishers Ltd 2005
All rights reserved. No part of this publication may be reproduced in any form or by any means without the permission of the publishers.
A CIP record for this book is available from the British Library
ISBN-10: 0 7136 7739 2 ISBN-13: 978 0 7136 7739 3 eISBN-13: 978-1-4081-0227-5
A & C Black uses paper produced with elemental chlorine-free pulp, harvested from managed sustainable forests.
Text typeset by A & C Black
Printed in Italy by Legoprint
Preface to the first edition
This dictionary provides a basic vocabulary of terms used in the fields of banking, investment, the Stock Exchange, and general finance. It covers both British and American usage.
The main words and phrases are defined in simple English, and many examples are given to show how the words may be used in context. In some cases, the definitions are expanded by explanatory comments. We also give qutoations from newspapers and financial magazines from various parts of the world.
The supplements at the back of the book offer additional information.
Preface to the second edition
The vocabulary of banking and finance, like that of so many modern disciplines, moves forward rapidly, and we have expanded and edited the text of the dictionary to keep pace with current changes. We have also made a further selection of recent quotations from newspapers and magazines.
At the same time, to make the dictionary more useful to students, we now give phonetic transcriptions for all the headwords.
Preface to the third edition
The text and supplements have been thoroughly revised for this new edition and many new entries have been included to reflect recent changes in the field of banking and finance.
We are grateful to Stephen Curtis for his help with this edition. Thanks are also due to Katy McAdam, Joel Adams, Daisy Jackson, Sarah Lusznat, Jill Garner and Sandra Anderson for the excellent presentation of the text.
Pronunciation Guide
The following symbols have been used to show the pronunciation of the main words in the dictionary.
Stress is indicated by a main stress mark ( ) and a secondary stress mark ( ) . Note that these are only guides, as the stress of the word changes according to its position in the sentence.
Vowels |
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Consonants |
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back |
b |
buck |
ɑ |
harm |
d |
dead |
ɒ |
stop |
ð |
other |
a |
type |
d |
jump |
aυ |
how |
f |
fare |
a ə |
hire |
|
gold |
aυə |
hour |
h |
head |
ɔ |
course |
j |
yellow |
ɔ |
annoy |
k |
cab |
e |
head |
l |
leave |
eə |
fair |
m |
mix |
e |
make |
n |
nil |
eυ |
go |
ŋ |
sing |
|
word |
p |
|
i |
keep |
r |
rest |
i |
happy |
s |
save |
ə |
about |
ʃ |
shop |
|
fit |
t |
take |
ə |
near |
tʃ |
change |
u |
annual |
θ |
theft |
u |
pool |
v |
value |
υ |
book |
w |
work |
υə |
tour |
x |
loch |
' |
shut |
|
measure |
|
|
z |
zone |
A
A / s ŋ (ə)l e /, AA / d b(ə)l e /, AAA / tr p(ə)l e / noun letters that show how reliable a particular share, bond or company is considered to be
These bonds have a AAA rating.
‘…the rating concern lowered its rating to single-A from double-A, and its senior debt rating to triple-B from single-A’ [Wall Street Journal]
COMMENT: The AAA rating is given by Standard & Poor’s or by Moody’s, and indicates a very high level of reliability for a corporate or municipal bond in the US
A1 /e wɒn/ adjective ship which is A1 at Lloyd’s a ship which is in the best possible condition according to Lloyd’s Register
AAD abbreviation Arab accounting dinar
ABA abbreviation American Bankers Association
abandonment /ə b ndənmənt/ noun an act of giving up voluntarily something that you own, such as an option or the right to a property
abatement /ə be tmənt/ noun an act of reducing
ABA transit number / e bi etr nz t n mbə/ noun a number allo-
cated to an American financial institution, such as a bank (NOTE: The number
appears on US cheques in the top right-hand corner, above the ‘check routing symbol’.)
ABI abbreviation Association of British Insurers
above par /ə b v pɑ / adjective referring to a share with a market price higher than its par value
above the line /ə b v ðə la n/ adjective, adverb 1. COMPANIES forming part of normal income and expenditure before tax Exceptional items are noted above the line in company accounts. 2. relating to revenue items in a
government budget 3. ADVERTISING relating to advertising for which payment is made (such as an ad in a magazine or a stand at a trade fair) and for which a commission is paid to an advertising agency. Compare below the line
absolute / bsəlu t/ adjective complete or total
absolute monopoly / bsəlu t mə-
nɒpəli/ noun a situation where only one producer produces or only one supplier supplies something The company has an absolute monopoly of imports of French wine. The supplier’s absolute monopoly of the product meant that customers had to accept his terms.
absolute title / bsəlu t ta t(ə)l/ noun a form of ownership of a piece of land in which the owner’s right is guaranteed by being registered with the Land Registry (NOTE: Absolute title
also exists to leasehold land, giving the proprietor a guaranteed valid lease.)
absorb /əb zɔ b/ verb to take in a small item so that it forms part of a larger one overheads have absorbed all our profits all our profits have gone in paying overhead expenses to absorb a loss by a subsidiary to include a subsidiary company’s loss in the group accounts a business which has been absorbed by a competitor a small business which has been made part of a larger one
absorption /əb zɔ pʃən/ noun the process of making a smaller business part of a larger one, so that the smaller company in effect no longer exists
absorption costing /əb zɔ pʃənkɒst ŋ/ noun a form of costing for a
product that includes both the direct costs of production and the indirect overhead costs as well
absorption rate |
2 |
accident policy |
absorption rate /əb zɔ pʃən re t/ noun a rate at which overhead costs are absorbed into each unit of production
abstract / bstr kt/ noun a short form of a report or document to make an abstract of the company accounts
a/c, acc abbreviation account
accelerate /ək seləre t/ verb 1. to make something go faster 2. to reduce the amount of time before a maturity date
accelerated depreciation /ək-
seləre t d d pri ʃ e ʃ(ə)n/ noun a system of depreciation which reduces the value of assets at a high rate in the early years to encourage companies, as a result of tax advantages, to invest in new equipment
COMMENT: This applied in the UK until 1984; until then companies could depreciate new equipment at 100% in the first year of purchase.
acceleration /ək selə re ʃ(ə)n/ noun the act of making an unpaid balance or bond repayment become payable immediately
accept /ək sept/ verb 1. to take something which is being offered to accept delivery of a shipment to take goods into the warehouse officially when they are delivered 2. to say ‘yes’ or to agree to something She accepted the offer of a job in Australia. He accepted £2000 in lieu of notice. 60% of shareholders have accepted the offer.
acceptable /ək septəb(ə)l/ adjective which can be accepted Both parties found the offer acceptable. The terms of the contract of employment are not acceptable to the candidate. The offer is not acceptable to the shareholders.
acceptance /ək septəns/ noun 1. the act of signing a bill of exchange to show that you agree to pay it to present a bill for acceptance to present a bill for payment by the person who has accepted it 2. acceptance of an offer the act of agreeing to an offer to give an offer a conditional acceptance to accept an offer provided that specific things happen or that specific terms apply we have their letter of acceptance we have received a letter from them accepting the offer 3. a bill which has been accepted 4. the act of accepting
an offer of new shares for which you have applied
acceptance credit /ək septənskred t/ noun an arrangement of credit from a bank, where the bank accepts bills of exchange drawn on the bank by the debtor: the bank then discounts the bills and is responsible for paying them when they mature; the debtor owes the bank for the bills but these are covered by letters of credit
acceptance sampling /ək septənssɑ mpl ŋ/ noun the process of testing a small sample of a batch to see if the whole batch is good enough to be accepted
accepting house /ək sept ŋ haυs/, acceptance house /ək septəns haυs/
noun a firm (usually a merchant bank) which accepts bills of exchange (i.e. promises to pay them) at a discount, in return for immediate payment to the issuer, in this case the Bank of England
Accepting Houses Committee
/ək sept ŋ haυz z kə m ti/ noun the main London merchant banks, which organise the lending of money with the Bank of England. They receive slightly better discount rates from the Bank.
acceptor /ək septə/ noun a person who accepts a bill of exchange by signing it, thus making a commitment to pay it by a specified date
access / kses/ noun to have access to something to be able to obtain or reach something She has access to large amounts of venture capital. verb to call up data which is stored in a computer She accessed the address file on the computer.
Access / kses/ a credit card system formerly operated by some British banks, part of the MasterCard network
access fee / kses fi / noun a fee charged to bank customers for using online services
access time / kses ta m/ noun the time taken by a computer to find data stored in it
accident insurance / ks d(ə)nt
n ʃυərəns/ noun insurance which will pay the insured person when an accident takes place
accident policy / ks d(ə)ntpɒl si/ noun an insurance contract
accommodation |
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3 |
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accountant |
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which provides a person with accident |
account (of a customer) to ask a shop |
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insurance |
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to supply goods which you will pay for |
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accommodation /ə kɒmə de ʃ(ə)n/ |
at a later date to open an account, to |
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close an account (of a shop) to start or |
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noun 1. money lent for a short time 2. |
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to reach an accommodation with |
to stop supplying a customer on credit |
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to settle an account to pay all the |
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creditors to agree terms for settlement |
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with creditors |
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money owed on an account to stop an |
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accommodation |
address |
/ə- |
account to stop supplying a customer |
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until payment has been made for goods |
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kɒmə de ʃ(ə)n |
ə dres/ noun |
an |
ad- |
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supplied 3. on account as part of a to- |
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dress used for receiving messages, but |
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tal bill to pay money on account to |
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which is not the real |
address |
of |
the |
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pay to settle part of a bill advance on |
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company |
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account money paid as a part payment |
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accommodation |
bill |
/ə kɒmə- |
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4. a customer who does a large amount |
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de ʃ(ə)n b l/ noun a bill of exchange |
of business with a firm and has an ac- |
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where the person signing (the ‘drawee’) |
count with it Smith Brothers is one of |
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is helping another company (the |
our largest accounts. Our sales peo- |
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‘drawer’) to raise a loan |
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ple call on their best accounts twice a |
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accordance /ə kɔ dns/ noun in |
month. 5. |
to keep the accounts to |
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accordance with in agreement or |
write each sum of money in the account |
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conformity with, as a result of what |
book The bookkeeper’s job is to enter |
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someone has said should be done In |
all the money received in the accounts. |
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accordance with your instructions we |
6. STOCK EXCHANGE a period during |
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have deposited the money in your cur- |
which shares are traded for credit, and at |
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rent account. I am submitting the |
the end of which the shares bought must |
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claim for damages in accordance with |
be paid for (NOTE: On the London |
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the advice of our legal advisers. |
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Stock Exchange, there are twenty-four |
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accord and satisfaction /ə kɔ d |
accounts during the year, each running |
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ən s t s f kʃən/ noun the payment by |
usually for ten working days.) 7. notice |
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a debtor of (part of) a debt |
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to take account of inflation, to take |
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accordingly |
/ə kɔ d ŋli/ |
adverb in |
inflation into account to assume that |
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there will be a specific percentage of in- |
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agreement with what has been decided |
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flation when making calculations |
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We have received your letter and have |
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verb to account for to explain and re- |
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altered the contract accordingly. |
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cord a money transaction to account |
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according to /ə kɔ d ŋ tu / preposi- |
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for a loss or a discrepancy The reps |
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tion 1. in accordance with The com- |
have to account for all their expenses to |
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puter was installed according to the |
the sales manager. |
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manufacturer’s |
instructions. |
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The |
account |
aggregation /ə kaυnt |
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shares were bought according to written |
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instructions from the client. 2. as stated |
re e ʃ(ə)n/ noun a service for on- |
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or shown by someone |
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line banking customers, which allows |
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‘…the budget targets for employment and |
them to group various accounts, includ- |
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growth are within reach according to the latest |
ing credit card accounts, together |
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figures’ [Australian Financial Review] |
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accountancy /ə kaυntənsi/ noun the |
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account /ə kaυnt/ noun 1. a record of |
work of an accountant They are study- |
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financial transactions over a period of |
ing accountancy or They are accoun- |
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time, such as money paid, received, bor- |
tancy students. (NOTE: The US term is |
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rowed or owed Please send me your |
accounting in this meaning.) |
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account or a detailed or an itemised ac- |
accountant /ə kaυntənt/ noun a per- |
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count. 2. (in a shop) |
an arrangement |
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son who keeps a company’s accounts or |
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which a customer has to buy goods and |
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deals with an individual person’s tax af- |
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pay for them at a later date, usually the |
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fairs The chief accountant of a manu- |
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end of the month to have an account |
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facturing group. The accountant has |
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or a charge account or a credit account |
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shown that there is a sharp variance in |
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with Harrods Put it on my account or |
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our labour costs. I send all my income |
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charge it to my account. They are one |
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tax queries to my accountant. |
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of our largest accounts. to open an |
accountant’s opinion 4 accumulate
accountant’s |
opinion |
/ə- |
accounts |
manager |
/ə kaυnts |
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kaυntənts ə p njən/ noun a report of |
m n d$ə/ noun the manager of an ac- |
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the audit of a company’s books, carried |
counts department |
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out by a certified public accountant |
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accounts |
payable |
/ə kaυnts |
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account book /ə kaυnt bυk/ noun a |
pe əb(ə)l/ noun money owed by a |
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book with printed columns which is |
company |
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used to record sales and purchases |
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accounts receivable /ə kaυnts r - |
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account day /ə kaυnt de / noun a |
si vəb(ə)l/ noun money owed to a |
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day on which shares which have been |
company |
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bought must be paid for (usually a Mon- |
account |
statement |
/ə kaυnt |
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day ten days after the end of an ac- |
ste tmənt/ noun a written document |
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count). Also called settlement day |
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from a bank showing the balance of an |
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account end /ə kaυnt end/ noun the |
account at the end of a period |
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end of an accounting period |
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account trading /ə kaυnt tre d ŋ/ |
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account |
executive |
/ə kaυnt |
- |
noun buying shares and selling the same |
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shares during an account, which means |
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zekjυt v/ |
noun 1. an employee who |
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that the dealer has only to pay the differ- |
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looks after customers or who is the link |
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ence between |
the price of |
the shares |
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between customers and the company 2. |
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bought and the price obtained for them |
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an employee of an organisation such |
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when they are sold |
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as a bank, public relations firm or |
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advertising agency who is responsible |
accrete /ə kri t/ verb to have some- |
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for looking after particular clients and |
thing added to it, especially (of a fund) |
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handling their business with the |
to have interest added to it |
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organisation |
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accretion /ə kri ʃ(ə)n/ noun the pro- |
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accounting /ə kaυnt ŋ/ noun the |
cess of adding interest to a fund over a |
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work of recording money paid, re- |
period of time |
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ceived, borrowed or owed accounting |
accrual /ə kru əl/ noun 1. the act of |
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methods accounting procedures an |
noting financial transactions when they |
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accounting machine The auditors |
take place, and not when payment is |
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have introduced a new accounting |
made 2. a gradual increase by addition |
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system. |
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accrual of interest the automatic addi- |
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‘…applicants will be professionally qualified |
tion of interest to capital |
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and have a degree in Commerce or Accounting’ |
accruals basis /ə kru əlz be s s/, |
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[Australian Financial Review] |
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accruals |
concept |
/ə kru əlz |
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accounting |
period |
/ə kaυnt ŋ |
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kɒnsept/ noun a method of preparing |
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p əriəd/ noun a period of time at the |
accounts in which revenues and costs |
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end of which the firm’s accounts are |
are both reported during the period to |
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made up |
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which they refer and not during the pe- |
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Accounting Standards Board /ə- |
riod when payments are received or |
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kaυnt ŋ st ndədz bɔ d/ noun a |
made |
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committee set up by British accounting |
accrue /ə kru / verb to increase and |
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institutions to monitor methods used in |
be due for payment at a later date In- |
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accounting |
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terest accrues from the beginning of the |
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account number /ə kaυnt n mbə/ |
month. |
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noun a special number given to an |
accrued dividend /ə kru d d v - |
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account, either a bank account (in which |
dend/ noun a dividend earned since the |
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case it appears on cheques) or a cus- |
last dividend was paid |
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tomer account |
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accrued interest /ə kru d ntrəst/ |
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account |
reconcilement /ə kaυnt |
noun interest which has been earned by |
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rekən sa lmənt/ noun same as bank |
an interest-bearing investment Ac- |
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reconciliation |
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crued interest is added quarterly. |
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accounts |
department /ə kaυnts |
acct abbreviation account |
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d pɑ tmənt/ noun a department in a |
accumulate /ə kju mjυle t/ verb to |
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company which deals with money paid, |
grow in quantity by being added to, or to |
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received, borrowed or owed |
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get more of something over a period of |
accumulated depreciation |
5 |
active account |
time We allow dividends to accumulate in the fund.
accumulated depreciation /ə-
kju mjυle t d d pri ʃi e ʃ(ə)n/ noun the total amount by which an asset has been depreciated since it was purchased
accumulated profit /ə-
kju mjυle t d prɒf t/ noun a profit which is not paid as dividend but is taken over into the accounts of the following year
accumulated reserves /ə-
kju mjυle t d r z% vz/ plural noun reserves which a company has put aside over a period of years
accumulation /ə kju mjυ le ʃ(ə)n/ noun the process of growing larger by being added to, or of getting more and more of something
accumulation unit /ə kju mjυ-
le ʃ(ə)n ju n t/ noun a type of unit in a unit trust, which produces dividends which are used to form more units (as opposed to an income unit, which produces dividends which the investor receives as income)
ACD abbreviation authorized corporate director
ACH abbreviation US automated clearing house
achieve /ə tʃi v/ verb to succeed in doing something, to do something successfully The company has achieved great success in the Far East. We achieved all our objectives in 2001.
‘…the company expects to move to profits of FFr 2m next year and achieve equally rapid growth in following years’ [Financial Times]
acid test ratio / s d test re ʃ əυ/ noun same as liquidity ratio
ACP state noun an African, Caribbean and Pacific state which is linked to the European Community through the Lomé Convention (1985)
acquire /ə kwa ə/ verb to buy to acquire a company We have acquired a new office building in the centre of town.
acquirer /ə kwa ərə/ noun a person or company which buys something
acquisition / kw z ʃ(ə)n/ noun something bought The chocolate factory is our latest acquisition. The company has a record of making profit-
able acquisitions of traders in the retail sector.
acquisition accounting / kw -
z ʃ(ə)n ə kaυnt ŋ/ noun a full consolidation, where the assets of a subsidiary company which has been purchased are included in the parent company’s balance sheet, and the premium paid for the goodwill is written off against the year’s earnings
across-the-board /ə krɒs ðə bɔ d/ adjective applying to everything or everyone an across-the-board price increase or wage increase
across-the-board tariff increase
/ə krɒs ði bɔ d t r f nkri s/ noun an increase in duty which applies to a whole range of items
act / kt/ noun a law passed by parliament which must be obeyed by the people verb 1. to work He has agreed to act as an agent for an American company. The solicitor is acting for us or on our behalf. 2. to do something The board will have to act quickly if the company’s losses are going to be reduced. to act on something to do what you have been asked to do by someone to act on a letter The lawyers are acting on our instructions.
ACT abbreviation Advance Corporation Tax
action / kʃən/ noun 1. a thing which has been done to take action to do something You must take action if you want to stop people cheating you. 2. to take industrial action to do something (usually to go on strike) to show that you are not happy with conditions at work 3. a case in a law court where a person or company sues another person or company to take legal action to sue someone an action for libel or a libel action an action for damages She brought an action for wrongful dismissal against her former employer.
active / kt v/ adjective involving many transactions or activities an active demand for oil shares an active day on the Stock Exchange Computer shares are very active.
active account / kt v ə kaυnt/ noun an account, such as a bank account or investment account, which is used (i.e. money is deposited and withdrawn) frequently