DECA Finance Vocabulary Review
Terms in this set (99)
The area of law that governs taxation. A tax is a fee charged by the government on a product, service, income or activity.
A system that monitors an individual, business or other organizations financial standing. Includes recording and verifying financial information to determine a profit or loss for a given time period as well as the value of assets, liabilities and owners' equity.
The worldwide development of economic, financial, trade and communication integration. This pushes business executives to consider broad views in the global marketplace as countries and their economies become interconnected and interdependent.
A person or business that owes money, goods or services to another.
A process to determine the cost of production or operation of a business by assigning expenses to various stages of production or operations of a firm.
The payment of cash for goods or services to settle an obligation; usually seen as an invoice or a receipt.
Perpetual Inventory System
An inventory system that continually keeps track of the number of items in inventory, and can be done manually or by computer.
Financial Information Management
Managing data such as credit card numbers, accounting balances or other monetary facts about an individual, business or other organization that are used when evaluating credit, loans or other financial activities.
A tax paid on wealth, collected after a person has died.
The portion of disposable income that is not spent on essential expenses in a household or business.
The status of the assets, liabilities and owners' equity of an individual, business or other organization as shown in its financial statements.
A network of banks, discount houses, institutional vendors, and money dealers who borrow and lend among themselves for the short term (90 days). Any investment has risk, but this is considered a safe place to invest due to its short term nature.
The possibility of loss, damage or injury outside of a business or other organization.
Combining assets, equity, liabilities and operating accounts of a business and its subsidiaries into one financial statement OR combining two or more businesses through the purchase, merger or ownership transfer to create a new business.
The assumption that taxpayers will stay in compliance with tax laws and accurately report their income amounts and tax deductions fairly and honestly.
The entity that provides available capital resources to debtors, in exchange for compensation.
The process of controlling an individual, business or other organizations opportunity for damage, loss or injury to ensure the safety of the community, environment and legal responsibilities.
A system that allows a business to maintain the optimum number of each item. In doing so, a business can operate production of a good or service, sales or customer service at a lower cost.
Verification that a vendor meets the requirements of accepted practices, regulations, legislation, rules, standards and/or the terms of a contract.
Charged to customers as a percentage of the price of the item being purchased.
Organizations that are public or private whom act as a channel between savers and borrowers of funds.
The financial documentation for an individual, business or other organization. The most common records are a Cash Flow Statement, Income Statement, Balance Sheet and Tax Returns.
Calculated as a percentage of the taxable income workers earn while on the job.
Information in an unorganized form (alphabets, numbers or symbols) that have a relationship with current conditions, ideas or knowledge.
Customer Relationship Management (CRM)
At a minimum, this is a database of customer contacts, purchase history and technical support. Additional elements can include profiles of potential clients, understanding and leveraging the needs of current customers, and enhanced customer service based on data analysis.
The process of determining a time specific financial plan for an individual, business or other organization to achieve a monetary goal.
Securities and Exchange Commission (SEC)
Government agency created in 1934 that is responsible for enforcing securities-related laws and setting standards for financial information about businesses that are traded on a stock exchange.
The possibility of loss, damage or injury within a business or other organization.
An individual, business or other organization that receives products or services for their own use.
The value, in terms of money, placed on a good or service.
Any activity where money is put at risk in the short term for the purpose of creating a profit in the long term.
Economies of Scale
An internal or external reduction in long term costs when production or operation increases in size.
Any activity provided by a vendor on behalf of a client. Depending on the business this can include customer service, financial management, information technology, social media support, database management, etc.
Funds available to a business or person for spending in the form of cash, credit or securities.
A market for the sale or purchase of stocks, bonds, bills of exchange, commodities, fortunes and options, foreign currency which work as an exchange for capital, and credit.
An open and organized marketplace where ownership titles or standard units of commodities are traded by its members.
A market for demand and supply of debt and equity capital. This is a highly decentralized system made up of three major parts: the stock market, bond market, and money market.
The amount spent to acquire or upgrade an asset that will increase the efficiency of the production or operations of a business for the long term.
Amount of money that the purchasers of a company's products or services actually pay for those items.
Monetary objectives of an individual, business or other organization that are decided by future needs of those entities.
Payment made to the government for services they provide.
Social Security (FICA)
A tax paid by workers so that they may receive benefits upon retirement.
A document showing activity on your account over the previous month, including a beginning and ending balance and all inflows and outflows during that time.
A way to receive cash or goods, while paying later.
Periodic Inventory System
An inventory method in which items are counted only occasionally, by visual inspection - and can be completed manually, or through the use of technology, such as barcode scanners.
The systematic organization of information that allows easy updating and analysis of data.
Provide a comparison between financial statement items to determine the strength or weakness of a company. The most common ratios are: net sales to net worth and net income to net sales.
Cost of Goods Sold
This line on an income statement shows the cost of raw materials and labor to produce a finished product or service that is available to a consumer.
A customer of a professional service provider or the primary contractor.
An agreement or contract that occurs between two or more parties and establishes a legal obligation. This can also be defined as an exchange of goods or services between a buyer and seller.
The systematic process of a business or other organization to ensure that regulations imposed by a government agency are being met.
The most common definition is money invested in a business to generate income. Can also be defined as wealth in the form of an asset which can be an indication of strength of an individual, business or country.
The process of buying and storing materials and products while controlling costs.
The value of one currency in terms of another, established on the foreign exchange market.
The joining of two or more unique factors or phenomena, such as technologies.
An inventory management method that coordinates the demand and supply for goods, delivering them just before they are needed.
An investment tool such as bonds, debentures, notes, options, and shares.
A strategy in which an entity sets aside a sum as a protection against a probable loss, instead of transferring the risk by purchasing an insurance policy.
Reviewing very large amounts of data for useful information. Often uses advanced statistical tools to determine trends, patterns and relationships. Can also be referred to as data surfing.
Laws that govern businesses and transactions between businesses.
The process of managing money for an individual, business or other organization.
The difference in cost between two or more business decisions.
Information provided regarding an investment instrument issued by a corporation, government or other organization that demonstrates whether it is debt or equity.
An examination of an organization's financial statements that is conducted by an employee of the organization.
The (often) computerized system of collecting, processing, analyzing and presenting accurate financial data to support management decisions.
The way a business interacts with its customers in order to obtain new customers while maintaining the current customer base.
An employee of a business or other organization whose task is to ensure that regulations imposed by a government agency are being met as well as internal policies and procedures.
Evaluating an organization's financial statements to determine the profitability of the organization, a division within the organization or a specific event or project.
A cost that a business has incurred, but cannot recover.
Those costs which cannot be directly linked to a good, service or project.
A data-mining technique that takes a numerical dataset and develops a mathematical formula that fits the data.
Reporting by an entity that outlines it's economic, environmental and social performance.
Composed of the companies involved in buying and selling insurance.
Time Value of Money
The increase of an amount of money due to interest earned over time or dividends paid.
Accounting that focuses on revenues and expenses of a business, reporting variances to management.
Includes earnings that a company has retained and the amount of funds invested in that company by its owners.
The main source of money for many local governments. Based on the value of property such as land and buildings.
An examination of an organization's financial statements by an independent accountant, not affiliated with the organization.
Refers to the ability of an organization to meet its financial obligations.
A strategy in which an insurance risk is shifted to another party (the insurer) by means of an insurance policy.
Activity Based Costing
A method used by businesses to accurately allocate overhead costs to specific products.
Refers to the method in which indirect costs are assigned to a product.
Those costs which can be directly tied to a good, service or product.
The process of collecting and analyzing data that is used in the strategic decision making process for a business.
Used in finance to disclose an organization's financial standing.
A decision making tool that compares the cost of an activity versus the benefits of the activity.
Process of improving capabilities of staff through access to education and training opportunities in the workplace, through outside organizations, or observing others perform the job.
Contacts made through business connections and interactions.
Refers to the difference between a planned and actual budget.
Refers to the rules and practices that direct and control an organization.
The strategy involves creating groups of people within the business or organization who have expert status in various methods, and then each project is carried out according to a set of steps in an effort to reach specific financial milestones.
Board of Directors
A group of individuals elected by stakeholders of an organization to govern the organization.
Fully and accurately disclosing of financial information to the public.
A data-mining technique that uses a decision tree that requires a series of decisions.
Include planning, organizing, leading and controlling.
Refers to rising prices and is an indicator of the stability of an economy.
A contract between a business and the insurer that covers a specific business risk.
Used when a business anticipates risk and refrains from certain business activities in order to avoid the risk.