Business / Taxes Glossary

Cash Basis Accounting: Cash basis accounting is one of two ways of recording revenues and expenses. Using this method, a company records income on its books when it receives a payment and expenses when it makes a . . . View Full Definition

Cash Equivalent: Short-term, low-risk investments, such as US Treasury bills or short-term certificates of deposit (CDs), are considered cash equivalents. The Financial Accounting Standards Board (FASB) defi . . . View Full Definition

Cash Flow: Cash flow is a measure of changes in a company’s cash account during an accounting period, specifically its cash income minus the cash payments it makes. For example, if a car dealership sel . . . View Full Definition

Cash Market: In a cash market buyers pay the market price for securities, currency, or commodities 'on the spot,' just as you would pay cash for groceries or other consumer products. Cash markets are als . . . View Full Definition

Cash Settlement: To settle a futures contract where the underlying asset is a financial instrument, such as a stock index or interest rate rather than a physical commodity, you deliver cash. In contrast, whe . . . View Full Definition

Cash Surrender Value: The cash surrender value of a permanent life insurance policy is the amount you receive if you cancel or surrender your policy before you die. It’s a portion of the money that accumulates ta . . . View Full Definition

Cash Value: Cash value is the amount that an account is worth at any given time. For example, the cash value of your 401(k) or IRA is what the account is worth at the end of a period, such as the end of . . . View Full Definition

Cash Value Account: If you have a permanent life insurance policy, part of each premium you pay goes into a tax-deferred account called the cash value account. You can borrow against the money that accumulates . . . View Full Definition

Catastrophic Illness Insurance: Many health insurance policies cap, or limit, the amount they will pay to cover medical expenses. But you can buy catastrophic illness insurance to cover medical expenses above the maximum y . . . View Full Definition

Catch-Up Contribution: You are entitled to make an annual catch-up contribution to your employer sponsored retirement savings plan and individual retirement account (IRA) if you’re 50 or older. The catch-up amount . . . View Full Definition

Ceiling: If there is an upper limit, or cap, on the interest rate you can be charged on an adjustable-rate loan, it's known as a ceiling. Even if interest rates in general rise higher than the intere . . . View Full Definition

Central Bank: Most countries have a central bank, which issues the country's currency and holds the reserve deposits of other banks in that country. It also either initiates or carries out the country's m . . . View Full Definition

Central Registration Depository (CRD): The Central Registration Depository (CRD) is an automated database maintained by NASD. The database contains records and information about registered securities employees including employmen . . . View Full Definition

Certificate Of Accrual On Treasury Securities (CATS): CATS are US Treasury zero-coupon bonds that are sold at deep discount to par, or face value. Like other zeros, the interest isn't actually paid during the bond's term but accumulates so that . . . View Full Definition

Certificate Of Deposit (CD): CDs are time deposits. When you purchase a CD from a bank, up to $100,000 is insured by the Federal Deposit Insurance Corporation (FDIC). You generally earn compound interest at a fixed rate . . . View Full Definition

Check Hold: When you deposit a check, your bank or other financial institution may delay crediting the money to your account during what’s called the check hold period. The number of days that your bank . . . View Full Definition

Check Truncation: To process payments faster and more efficiently, many banks no longer transport paper checks, but replace them with digital images — called substitute checks — that can be transferred electr . . . View Full Definition

Checking Account: Checking accounts are transaction accounts that allow you to authorize the transfer money to another person or organization either by writing a check that includes the words “Pay to the orde . . . View Full Definition

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