Abandonment-The relinquishment or surrender of rights, interest of property by one person to another, expressly or by implication.
Acceptance-The act by which the drawee of a bill of exchange binds himself to pay the same when due. Writing of the name across the face of the bill constitutes acceptance.
Account- In accounting, it means a ledger sheet showing debit and credit of any asset, liability, income etc., while in business, every customer is sometimes referred to as a separate account.
Accounts Current- Statements of accounts rendered between home firms and foreign firms, between whom there are frequent transactions, showing the daily balance and adding or deducting interest thereon.
The term also denotes financial statement issued by an insurance company to its agents on a monthly basis.
Account Payable- A debt, owing to an enterprise, which arises in the normal course of business dealing and is not supported by negotiable paper.
Act of God-Any act beyond human causes or not subject to human foresight.
Advance Bill-A bill of exchange drawn before shipment of goods.
Ad Valorem-According to value.
Ad Valorem Duty-Duty levied on the value of certain item and can only be altered by a special resolution of the members.
Advice-A sworn statement for declaration in writing before an official authorized to execute such instruments.
After Sight-A term used to indicate that the period for which a bill of exchange is drawn, will not begin until after it has been presented to the drawee.
Agreement-A contract or bargain to do or not to do certain things. It is always desirable to have all the agreements in writing. However, it has often been found that even verbal agreements are equally honoured by the parties concerned.
Allonge-An attachment to a bill of exchange to provide space for further endorsements when the back of the bill itself has been fully policy.
All-Risk Insurance- An insurance against loss or damage caused by all perils expect those especially excluded and mentioned in the policy.
Appeal Bond- A bond required of an appellant to assure payment of costs and damages if the appeal is lost.
Articles of Association- A document that defines the power, rights, duties and authority of the shareholders and the directors of a Limited Company. It is a set of rules for the internal management of the Company.
At the Market- An order to a broker to sell goods, etc. immediately at the best possible price.
Back Bill- A statement of unpaid charges.
Bad Debt- A debt which is no more accepted to be recoverable from the debator.
Balance Sheet- A list of statement showing the details of assets and liabilities of any organisation as on particular date, usually at the close of the financial year.
Bank Acceptance- A draft or bill of exchange drawn upon and accepted by a bank. Also called banker’s acceptance.
Bank Note- A bank note is a legal tender and is a promissory note payable on demand to the bearer.
Bankruptcy- It is a state of insolvency in which the effects of a man unable to pay his debts are taken over by a trustee and distributed for the benefit of all his creditors.
Bill of Entry- A document describing goods before they are landed, which importers give to Customs authorities.
Bill of Exchange- It is an unconditional written order by one party ordering another to pay to some third, on demand or at some future date.
Bill of Lading- A document issued by the carrier to the shipper as a receipt and as a contract governing transportation and delivery of the articles only.
Bond- A sealed document by which a person binds himself, his heirs, executors and administrators to pay a certain sum to another person on or before a specified date.
Bonded Goods- Goods stored in a warehouse by an owner who has furnished a bond to pay duty or taxes due.
Bonded Warehouse- A government building in which bonded goods are stored.
Brand- Trade mark applied on packages, casks and other containers.
Breach of Contract- Breaking the terms of contract by non-performance or doing some such act which is contrary to the terms of the contract.
Broker- An agent who buys and sells on behalf of other people without taking possession of the goods.
Brokerage- It is the remuneration which paid to the broker. It is generally a certain percentage of the amount of deal.
Capital- It is the sum of money employed by a person or a company in a business undertaking. It is also principal of a loan.
Call Loan- Money lent payable on call or demand. Such loans are secured by securities as these can be readily sold if the money is not paid. The limit allowed for payment before selling the securities is twenty-four hours.
Cash Discount- A discount allowed for payment of a debt in advance.
Caveat Emptor- It is a Latin phrase which means ‘let the buyer beware.’ It is used as an opposite of ‘caveat venditor’.
Caveat Venditor- It is a Latin phrase which means ‘let the seller beware.’
Charter Party- The term stands for the contract between the owner of a vessel and the charterer, i.e. the one that takes over the vessel for a certain period of time or for a voyage.
Cheque- It is a bill of exchange drawn on a bank from and payable on demand.
(a) Bearer cheque- A ‘bearer cheque’ is one made payable to payee or bearer.
(b) Order cheque- An ‘order cheque’ is one made payable to payee or order enabling the payee either to deposit it in his account or endorse it to a third party.
(c) Crossed cheque- A ‘crossed cheque’ is one made payable to the account of a payee only and not cashed over the counter.
(d) Post-dated cheque- A ‘post-dated cheque’ is one in which the date inserted is a future one. In other words, it is not encashable on the date of its issue.
(e) State cheque- A ‘stale cheque’ is one that has not been presented for payment within a specified time. In India, any cheque not presented for payment over a period of six months from the date it bears, is a stale cheque.
Circular Note- A letter of credit issued by a bank to clients, enabling the holders to obtain payment at various places abroad.
Closing Price- The price at which the last sale of an organised market is made on a particular day.
Commission- It is the remuneration paid to an agent for carrying through a transaction on introducing business.
Common Carrier- A transportation agency operating under a certificate from the government which requires the carrier to serve all the people.
Common law- Usages and customs which have come to be sanctioned as precedents, but are not reduced to codes.
Company- It is an association of persons combined for purpose of profit, and contributing to a common capital.
Consignment- A form of bailment in which one party sends goods to another party for sale.
Contract- An agreement between two or more parties for a legal purpose and supported by consideration. (Acceptance of agreement)
Cover- Money deposited as security against possible loss.
Cover Note- A document issued by insurer giving temporary insurance cover pending the issue of a formal insurance policy.
Credit- Ability to secure goods or services in the present against the promise to pay for them in the future. In accounting, the credit side of the account is one which receipts are entered.
Credit Bill- A bill of exchange where the debator has arranged in advance for credit with the drawee.
Credit Note- It is a form in which the details of reduction or rebate from an already rendered account are given.
Creditor- One to whom some debt is owed by another.
Current Account- It is an account with a bank which is maintained by a business concern for collecting and paying accounts. No interest is generally allowed on the credit balance of the current account. On the other hand, if the balance of the current accounts are smaller, a charge is generally made by the bank.
Customs Duties- These are the taxes levied by the government on certain imported and exported goods.
Date of Maturity- Date on which a debt owed by a person falls due.
Days of Grace- Extra time allowed by law or custom for making certain payments.
Dead Stock- Inventory of which there is little or no demand.
Dead Weight- The weight of freight-carrying vehicles or vessels without load.
Debenture- A document issued under the seal of the company, usually, charging all or some of a company’s properly in favour of the holder. The rate of interest payable within the time which the amount is to be repaid, is clearly mentioned in the document.
Debit- In accounts, a debit refers to an amount owed.
Debtor- A person/firm/company which owes a certain amount to another person, bank, company etc.
Default- Failure to perform a term of contract at the stipulated time.
Demurrage- A charge made on the goods by railways/ transport companies/shippers etc. for retaining goods beyond a specified period.
Deposit Account- It refers to an account with the bank in which the amount is paid or deposited which is not required for an immediate use. A certain interest is paid on this sum by the bank.
Discount-A reduction on a principal amount.
(a) Cash discount- It is allowed by the manufactures or producers to their dealers. This is generally a certain percentage on the marked or printed price of the product.
(b) Trade discount- It is allowed by the manufactures or producers to their dealers. This is generally a certain percentage on the marked or printed price of the product.
(c) Special discount- It is allowed under special circumstances-generally on the large orders or an orders received during a particular period. In certain cases it is also allowed on shop-soiled stock.
Dishonour- Failure or refusal to make payment on a promissory note or bill of exchange when due.
Dividend- It refers to the interest paid on investment. Profits of a company divisible among its members are also dividends.
Due Bill- A written admission of a debt.
Endorsement- A signature on the back of a bill or exchange of cheque, making it payable to the person who signed it.
Excise Duty- Taxes levied by the government on certain articles manufactured for home consumption.
Executor- A person appointed by a will to see that its provisions are duly carried out.
Express Warranty- A statement of conduct by a seller to a buyer that a specific condition exists in the charter of goods.
External Debt- The debt held by persons outside a country.
Face Value- The value stated on the face of a security or insurance policy. It is the value on maturity or death of the insured.
Factor- A merchant who buys and sells on comission the goods if the bill drawn for those goods is not honoured.
Free on Board (F.O.R)- It means that the sale price covers all charges including delivery of goods, free on board truck, car or vessels at a designated point, either at the origin or the destination of a shipment.
Free on Rail (F.O.R.)- It means that all expenses up to the loading of goods in rail will be borne by the seller.
Fraud- Securing consent to a contract by the misrepresentation made with knowledge or by trick.
Gilt-edged Securities- Stocks and shares which are relatively risk-free.
Goodwill- Value of a firm’s reputation.
Grade Period- Any period beyond the due date granted to a debtor by a creditor.
Gross Profit- Total allocable receipts of a period’s operations less the cost of the goods sold, before allowing for operating expenses and income tax.
Hire-purchase- A system for the purchase of goods, by which they are obtained on hire and each payment is treated as a part-payment of the purchases.
Hypothecation- It is a contract which pledges or creates a lien on collateral to secure a debt, where the debtor keeps possession of the collateral.
Imports- Commodities or servicers purchased from foreign countries.
Import Duty- A tax or tariff on import of goods.
Indemnity- Security against damage or loss.
Indent- An indent is an order for the goods. In Large store house/factories/workshops etc., it is also used as requisition of stores.
Indorser- It refers to one who has put his name or, negotiable paper in order to transfer title (ownership) from himself to another or to guarantee payment.
Inland Bill- A bill of exchange drawn and payable within the country.
Insolvent- One who cannot pay his/her debts.
Inter Alia- Among other things.
Interest- It is an amount paid on a loan or deposit. It is usually calculated at a certain rate per cent per annum.
(a) Simple interest- It is interest calculated only on the principal and the accumlated interest of previous periods.
(b) Compound interest- Interest calculated on the principal and the accumulated interest of previous periods.
Interest Bond- A bond issued in payment of interest on other bonds because of a shortage of cash to pay the interest.
Interim Bond- A temporary certificate which is replaced by a parmanent bond at a later date.
Invalid Bond- When a promissory note is obtained by misrepresentation or under threat or for illegal gratification such as gambling, bribery, etc., it becomes null and void and is termed as an invalid bond.
Invoice- A business form showing the items shipped or sold and charges thereof, sent by the seller at the time of shipment or selling.
I.O.U.- Abbreviation of ‘I owe you’. It is an acknowledgement of a debt.
Jerquer- Customs official who searches ships for dutiable articles. He also checks ships and papers relating to import of goods.
Jettison- The throwing overboard a ship of goods, etc.on account of bad weather or enemy action, etc. The owner whose property is sacrificed, for the preservation of the whole, has a claim upon the owners of the property preserved, who are bound to share his loss with him.
Jury- A body of persons chosen and sworn to hear and pass verdict upon evidence brought forward in a trial, inquest or inquiry.
Legal Tender- Paper and metal money, i.e. coins that a government declares must be accepted as a lawful payment of debts.
Letter of Allotment- A letter informing an applicant that certain shares have been allotted to him or her.
Letter of Credit- A letter from one banker to another authorizing the payment of a specified sum to the person named in the letter on certain specified conditions.
Liablility- Debt or responsibility.
License- It is a permission given to do some act, which, without such permission, would be unlawful.
Lien- A legal right of a person to detain or control property belonging to another until certain charges upon it have been paid or until some pecuniary claim of the former has been satisfied.
Liquidation- The process by which a company is brought to an end (wound up) and its assets and property are redistributed.
List Price- The price shown in the sales list of the seller.
Long Bills- Bills of exchange drawn payable at a period exceeding three days after date of sight.
Long Term Holding- Stocks and shares held as a long term investment.
Manifest- A list of goods on board a ship/aircraft.
Margin- A percentage deposited with a broker to secure him against loss by violent fluctuation of price.
Marked Cheque- It is a cheque marked by the drawer’s banker guaranteeing for its being good for payment.
Market Area- That territory within which the product’s purchase or sale affects its generally prevailing price.
Market Price- The price at which the goods are exchanged in the market from day-to-day or current ruling price in the market.
Market Value- The price at which stocks, bonds, notes or goods sell in a given time.
Maturity Date- The date on which an obligation is due.
Maturity Value- The amount which must be paid on the date an obligation is due.
Memorandum on Association- It is a document which indicates the name, address, objects, powers, the limitation of members’ liability and the share capital of the company. It further defines the limits of the field of operations.
Merchandise- Goods-household or commercial-bought and sold in wholesale and retail.
Middleman- An intermediary trader who buys goods from producers and sells to retailers and cosumers.
Monopoly-Market situation in which one person or a group has such a control of the supply of a commodity as to be able to regulate its price.
Mortgage- A deed transferring property to a creditor as security for the payment of a debt.
Negotiate- To conduct business transactions; to endorse a cheque or bill of exchange, to discount a bill of exchange.
Negotiable Instruments- Documents such as bills, notes, cheques, bonds, etc. that by common usage on transfer by common usage on transfer by delivery from one person to another, convey a legal right to the property therein, free from all claims.
Net- The remainder after all deductions.
Net Profit- Profit after all deductions.
Net sales- The total of all sales after deducting returned sales.
Normal Price- That price which will in the long run make the rate of production and rate of consumption equal.
Notary- A person duly authorised by the government to take oaths, attest writings, etc.
Notarial Protest- The evidence required by law, of the due presentation of a bill for acceptance or payment.
Obligation- Any enforceable debt (business). A duty owed by one person to another (legal).
Octroi- A tax imposed on articles coming inside a city. Revenues from such sources generally go to municipal bodies.
Official Exchange Rate- The ratio which is applied by the monetary authority of one country in exchange of its currency for another country’s currency.
Open Cheque- An uncrossed cheque payable on presentation to “bearer or order” as the case may be.
Open Credit- Credit given by a banker to customers without guarantee or security.
Open Indent- An importer’s purchase order to an exporter, which may be completed with goods from any manufacturer or firm provided the goods meet specifications.
Opening Price- The price at which the first sale on an organised market is made on a particular day.
Open Letter of credit- A letter of credit without special conditions.
Order- Verbal or written instructions for the purchase of goods.
Output- The quantity of goods produced in a given period of time.
Overdraft- A position in a bank account when withdrawals exceed deposits. In this situation a person or account is said to be overdrawn.
Overhead- All expenses expect for those of the cost of raw materials, labour, sales etc.
Owner’s Risk- Railways convey goods at reduced charges at owner’s risk. It means that the Railways are not responsible for any loss or damage expect caused through misconduct of their servants.
Par- A stock or bond selling for exactly the amount expressed upon its face, is said to be at par. When selling at a profit, it is said to be at “above par.” When selling at a loss, it is called “below par.”
Par of Exchange- The value of a country’s money in that of the other, comparing gold with gold and silver with silver.
Par Value- In the case of bonds and stocks, the face value appearing on the certificate is the par value.
Patent- A patent is an exclusive right granted under the Patents Act to the inventor of a new useful technical invention.
Patent Infringement- Unauthorised use, sale, or manufacture of a patented article.
Payee- The person named on a cheque, bill of exchange or other document, who is to receive payment.
Pay in- To deposit money in a bank.
Petty Cash- A cash or fund for small disbursements. It is also termed as petty fund.
Plaintiff- One who brings a suit in a court of law.
Pledge- It is a bailment of personal property by the owner to another as security for a debt.
Policy- In insurance, it is the contract between the insurer and the insured setting forth the various terms and conditions of the contract.
Pool- A combination formed to control the price of merchandise.
Post-dated- It pertains to a cheque or other documents which bears a date subsequent to the date of delivery.
Power of Attorney- A document authorising a person to act legally for another.
Pre-paying- Paying before the date on which payment is due.
Price- The amount of money which expresses exchange value of single until of goods, as 1000 grams, or 1 kilo of tea leaves.
Pro format- Latin for ‘for the sake of form.’ Used to describe in accounting, financial and other statements or conclusions based upon assumed or anticipated facts. A type of specimen.
Pro rata- The term is used to describe proportionate allocation. A method of assigning an amount to a fraction, according to its share of the whole.
Prospectus- Circular containing an outline of an article, commercial enterprise for public favour or comment.
Proviso-Conditional stipulation.
Quantity Discount- A discount allowed on the principle that large quantities involve lower costs.
Quotation- The current published price of any commodity or security. Often two prices are given: (1) the price asked for the sellers; and (2) the price offered by the buyers.
Rate- The charge per unit for goods or services.
Rate War- Cut-throat competition between two or more carriers in an effort to attract freight by cutting rates.
Rebate- Part of payment returned.
Receipt- A written acknowledgement that something has been received.
Refund- To pay back.
Reinsurance- Transfer of a part of risk from one insurer to another.
Remittance- Money sent by one person to another.
Representative- An agent or a salesman.
Return- Income from an investment usually expressed as a percentage of its cost.
Returns-Sold merchandise returned by customers’ to get refund.
Revocable Letter of Credit- A letter of credit which can be cancelled without the consent of the beneficiary.
Sabotage- Deliberate conduct damaging machinery, destroying raw materials, or turning out defective work.
Salvage- Property saved from a fire or a wreck.
Sealed Tender- A tender presented to an officer with seals, to be opened on the day fixed for the purpose.
Second of Exchange- The second copy of a bill of exchange marked “second”.
Secured Creditor- A creditor who has collateral security in the form of personal or real property for a sum due to him.
Shareholder or Stockholder- The owner of shares or stocks, having shares in his/her D-Mat account.
Shipment- Articles put on board the ship for transportation.
Sight Bill- Bill of exchange payable when received and in which no days of grace are allowed.
Sight Draft- A cheque or draft on bank or commercial house which demands payment immediately upon presentation.
Sleeping Partner- A person who has capital in a partnership but takes no part in its commercial activities though he/she has all the benefits and obligations in accordance with the provisions of partnership deed.
Slump- A period of bad trade caused by lack of demand for commodities.
Solvency- The ability to discharge all debts and obligation in full.
Special Agent- An agent whose powers to act for his principal are limited.
Speciality- An article dealt in chiefly or exclusively.
Speculation- Selling of goods or securities in the hope of making a profit from the charge in price.
Spot Price- The price of goods deliverable immediately.
Stakeholders- All those having interests in an organisation, e.g. its shareholders, employees, suppliers, customers, etc.
Stock Exchange- A place where stocks and bonds are purchased and sold through brokers under definite rules and at regular hours.
Syndicate- A group of persons or firms to achieve a common business purpose.
Tariff- Customs duties on merchandise imports. Tarrif gives a price advantage to locally produced goods over similar goods which are imported, and earns revenue for the government.
Tax- A compulsory payment to the government to defray the expenses which it has incurred in performing services for the common benefit.
Tender- An offer to buy or sell.
Terms- Conditions on which an agreement is made or on which a sale is made.
Time Bill- A bill of exchange payable at a future date rather than immediately.
Trade Bill- A bill of exchange drawn by the seller of the goods on the buyer covering payment of the goods.
Trade Discounts- These are the discounts allowed to the middlemen.
Trade Mark- A distinctive device or imprint used by a person or firm to identify his products.
Ultra Vires- Latin for “beyond the powers”. Generally used to describe an act by a corporation or its agent which is beyond its powers to set out in the articles of Incorporation.
Underwriter- Any person, banker, or syndicate that guarantees to furnish a definite sum of money by a definite date to a business or government in return for an issue of bonds or stock.
Unilateral Contract- It is a contract that is binding on any one party to it, such as a loan of money.
Unsecured Creditor- A lender whose loan of debt is not secured by any collateral or mortgage.
Unship- Unload from a ship.
Usance- The customary number of days or months in which foreign bills of exchange are drawn in a certain place.
Vendor- It refers to a legal entity that promotes or exchanges goods or services for money.
Venture- Business enterprise, especially of a speculative nature.
Warrant- A magistrate’s order for the arrest of a person or seizure of goods; or a receipt for goods deposited in a warehouse and a negotiable document entitling the holder to certain money or property.
Wash- A fictitious sale or transaction.
Will- Legal disposition of property on one’s death according to the written instructions of the deceased.
Write- A formal written order issued by a body with administrative or judicial power such as court. Warrants and prerogative are types of write.
