Glossary catalogue

The Project Glossary enables you to set up a list of defined terms for your project, review the technical and business terms already defined for a model, add to the list, delete or change items, apply reporting styles to terms of specific types, and filter the list to exclude by type.


Glossary table

Term Meaning
Account number
The primary identifier for ownership of an account, whether a vendor account, a checking or brokerage account, or a loan account. An account number is used whether or not the identifier uses letters or numbers.
Account statement
An account statement is a periodic summary of account activity with a beginning date and an ending date. The most commonly known are checking account statements, usually provided monthly, and brokerage account statements, which are provided monthly or quarterly. Monthly credit card bills are also considered account statements.
Amortization is the paying off of debt with a fixed repayment schedule in regular installments over a period of time.
Amortization of Loans
On auto loan and home loan payments, at the beginning of the loan term, most of the monthly payment goes toward interest. With each subsequent payment, a greater percentage of the payment goes toward the loan's principal. For example, on a five-year $20,000 auto loan at 6% interest, the first payment of $386.66 allocates $286.66 to principal and $100 to interest. The last monthly payment allocates $384.73 to principal and $1.92 to interest.
Amortization Schedule
An amortization schedule is to a complete table of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term. While each periodic payment is the same amount early in the schedule, the majority of each payment is interest; later in the schedule, the majority of each payment covers the loan's principal. The last line of the schedule shows the borrower’s total interest and principal payments for the entire loan term.
Amortization Table
The calculations of an amortized loan may be displayed in an amortization table. The table lists relevant balances and dollar amounts for each period. Each period is a row in the table, while the columns are typically current loan balance, total monthly payment, interest portion of payment, principal portion of payment and ending outstanding balance. The ending outstanding loan balance of one period becomes the current loan balance for the next.
Amortized loan
An amortized loan is a loan with scheduled periodic payments that consist of both principal and interest. An amortized loan payment pays the relevant interest expense for the period before any principal is paid and reduced. This is opposed to loans with interest-only payment features, balloon payment features and even negatively amortizing payment features.
An annual percentage rate (APR) is the annual rate charged for borrowing or earned through an investment, and is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction but does not take compounding into account. As loans or credit agreements can vary in terms of interest-rate structure, transaction fees, late penalties and other factors, a standardized computation such as the APR provides borrowers with a bottom-line number they can easily compare to rates charged by other lenders.
Overdue debt, liability or obligation. An account is said to be "in arrears" if one or more payments have been missed in transactions where regular payments are contractually required, such as mortgage or rent payments and utility or telephone bills.
Balance Sheet
Balance Sheet is the financial statement of a company which includes assets, liabilities, equity capital, total debt, etc. at a point in time. Balance sheet includes assets on one side, and liabilities on the other. For the balance sheet to reflect the true picture, both heads (liabilities & assets) should tally (Assets = Liabilities + Equity). Description: Balance sheet is more like a snapshot of the financial position of a company at a specified time, usually calculated after every quarter, six months or one year. Balance Sheet has two main heads -assets and liabilities. Let's understand each one of them. What are assets? Assets are those resources or things which the company owns. They can be divided into current as well as non-current assets or long term assets. Liabilities on are debts or obligations of a company. It is the amount that the company owes to its creditors. Liabilities can be divided into current liabilities and long term liabilities. Another important head in the balance sheet is shareholder or owner's equity. Assets are equal to total liabilities and owners' equity. Owner's equity is used when the company is a sole proprietorship and shareholders' equity is used when the company is a corporation. It is also known as book value of the company. Let's understand reporting of a transaction on a balance sheet. If a company XYZ takes a five-year loan from public sector banks for an amount of Rs 5,00,000, it means that the bank will pay the money to XYZ Ltd. The accounts department will increase the cash component by 5,00,000 on the assets front, and at the same time increase the long term debt account with the same amount, thus balancing both the sides. If company raises Rs 10,00,000 from investors, then its assets will increase by that amount, as will its shareholder's equity.
Bank account
A bank account is a financial account maintained by a financial institution for a customer.
Cash Flow
The amount of cash or cash-equivalent which the company receives or gives out by the way of payment(s) to creditors is known as cash flow. Cash flow analysis is often used to analyse the liquidity position of the company. It gives a snapshot of the amount of cash coming into the business, from where, and amount flowing out. Description: As discussed cash flows can either be positive or negative. It is calculated by subtracting the cash balance at the beginning of a period which is also known as opening balance, form the cash balance at the end of the period (could be a month, quarter or a year) or the closing balance. If the difference is positive, it means you have more cash at the end of a given period. If the difference is negative it means that you have less amount of cash at the end of a given period when compared with the opening balance at the starting of a period. To analyse where the cash is coming from and going out, cash flow statements are prepared. It has three main categories - operating cash flow which includes day-to-day transactions, investing cash flow which includes transactions which are done for expansion purpose, and financing cash flow which include transactions relating to the amount of dividend paid out to stockholders. However, the level of cash flow is not an ideal metric to analyse a company when making an investment decision. A Company's balance sheet as well as income statements should be studied carefully to come to a conclusion. Cash level might be increasing for a company because it might have sold some of its assets, but that doesn't mean the liquidity is improving. If the company has sold off some of its assets to pay off debt then this is a negative sign and should be investigated further for more clarification. If the company is not reinvesting cash then this is also a negative sign because in that case it is not using the opportunity to diversify or build business for expansion.
A debtor is a company or individual who owes money. If the debt is in the form of a loan from a financial institution, the debtor is referred to as a borrower, and if the debt is in the form of securities, such as bonds, the debtor is referred to as an issuer. Legally, someone who files a voluntary petition to declare bankruptcy is also considered a debtor.
Default is the failure to pay interest or principal on a loan or security when due. Default occurs when a debtor is unable to meet the legal obligation of debt repayment, and it also refers to cases in which one party fails to perform on a futures contract as required by an exchange.
Due date
Due date, also known as maturity date, is the day when some accruals fall due.
Due Date Rate
Due date rate is the amount of debt that has to be paid on a date decided in the past. It can also be known as maturity date rate. If the due date amount is higher than the actual amount, then it results in profit, otherwise it's a loss. Description: Due date rate, also called maturity amount, is the amount of debt that a debtor has to pay on a date decided earlier. For example, if a person named ABC borrowed Rs 100 from someone called XYZ and it has been decided that ABC would pay Rs 110 on a date decided at the time of making the transaction, then Rs 110 is called the due date rate, maturity amount or maturity rate and the date is a called the due date or maturity date. Due date amount is also calculated widely for bank deposits, FDs, NSCs, and other investment instruments and via financial institutions. The due date amount/rate for a fixed deposit of Rs 10,000 with 10 per cent annual rate of interest for one year will be Rs 11,000. The difference between the principle and due date rate can be determined as profit/loss. If the due date rate is higher than the actual rate, the difference amount is called profit, otherwise it will be treated as loss.
Interest is the charge for the privilege of borrowing money, typically expressed as annual percentage rate. Interest can also refer to the amount of ownership a stockholder has in a company, usually expressed as a percentage.
Loan Application Fee
A fee charged to process an application for a loan, such as a home mortgage from a lender or mortgage broker. Loan application fees are charged to cover some of the costs involved in processing the application including credit checks, property appraisals and basic administrative costs.
Past Due
Past due is a loan payment that has not been made as of its due date. A borrower who is past due may be subject to late fees, unless the borrower is still within a grace period. Failure to repay a loan on time could have negative implications for the borrower's credit status or cause the loan terms to be permanently adjusted.
Principal is most commonly used to refer to the amount borrowed or the amount still owed on a loan, separate from interest. If you take out a $50,000 loan, for example, the principal is $50,000, so if you pay off $30,000, the remaining $20,000 left to repay is also called the principal.
A refinance occurs when a business or person revises a payment schedule for repaying debt. Mechanically, the old loan is paid off and replaced with a new loan offering different terms. When a company refinances, it typically extends the maturity date. Companies or individuals refinancing loans may have to pay a penalty or fee.
Repayment is the act of paying back money previously borrowed from a lender. Repayment usually takes the form of periodic payments that normally include part principal plus interest in each payment.
Suspense Account
suspense account is the section of a company's books where it records its unclassified debits and credits. The suspense account temporarily holds these unclassified transactions while the company makes a decision about their classification. Transactions in the suspense account continue to appear in the general ledger for the company.