Business Glossary - C


Calendar Tax Year - 12 consecutive months beginning January 1 and ending December 31.

Canceled Loan - The annulment or recission of an approved loan prior to disbursement.

Capital - *** Assets less liabilities, representing the ownership interest in a business; *** a stock of accumulated goods, especially at a specified time and in contrast to income received during a specified time period; *** accumulated goods devoted to the produc

Capital Asset - All tangible property, including securities, real estate and other property, held for the long term.

Capital Expenditures - Business spending on additional plant equipment and inventory.

Capital Gain - The profit realized when a capital asset is sold for a higher price than the purchase price. See also capital loss.

Capital Loss - The loss incurred when a capital asset is sold for a lower price than the purchase price. See also capital gain.

Capitalization - The sum of a corporation’s long-term debt, stock and surpluses. Syn. invested capital.

Capitalized Property - Personal property of the agency which has an average dollar value of $300.00 or more and a life expectancy of one year or more. Capitalized property shall be depreciated annually over the expected useful life to the agency.

Cash Discount - An incentive offered by the seller to encourage the buyer to pay within a stipulated time. For example, if the terms are 2/10/N 30, the buyer may deduct 2 percent from the amount of the invoice (if paid within 10 days) otherwise, the full amount is due in

Cash Flow - An accounting presentation showing how much of the cash generated by the business remains after both expenses (including interest) and principal repayment on financing are paid. A projected cash flow statement indicates whether the business will have cash

Cash Method - reporting income one receives during the year, usually deducting expenses in the year you pay them.

Certificate Of Competency - A certificate issued by the Small Business Administration (SBA) stating that the holder is “responsible” (in terms of capability, competency, capacity, credit, integrity, perseverance, and tenacity) for the purpose of receiving and performing a specific g

Certified 8(A) Firm - A firm owned and operated by socially and economically disadvantaged individuals and eligible to receive federal contracts under the Small Business Administration’s 8(a) Business Development Program.

Character - A letter, digit, or other symbol, that is a part of the organization, control, or representation of data used in computer systems.

Charge-Off - An accounting transaction removing an uncollectible balance from the active receivable accounts.

Charged Off Loan - An uncollectible loan for which the principal and accrued interest were removed from the receivable accounts.

Closed Loan - Any loan for which funds have been disbursed, and all required documentation has been executed, received and reviewed. For statistical purposes, first or total disbursement is counted as a closed loan.

Closing - Actions and procedures required to effect the documentation and disbursement of loan funds after the application has been approved, and the execution of all required documentation and its filing and recordation where required.

Collateral - Something of value – securities, evidence of deposit or other property – pledged to support the repayment of an obligation.

Collateral Document - A legal document covering the item(s) pledged as collateral on a loan, i.e., note, mortgages, assignment, etc.

Common Stock - A security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. See also equity; preferred stock.

Compromise - The settlement of a claim resulting from a defaulted loan for less than the full amount due. Compromise settlement is a procedure available for use only in instances where the government cannot collect the full amount due within a reasonable time, by enfo

Consortium - A coalition of organizations, such as banks and corporations, set up to fund ventures requiring large capital resources.

Consumer Price Index (Cpi) - A measure of price changes in consumer goods and services used to identify periods of inflation or deflation.

Contingent Liability - A potential obligation that may be incurred dependent upon the occurrence of a future event. Two examples are: (1) the liability of an endorser or guarantor of a note if the primary borrower fails to pay as agreed and (2) the liability that would be incur

Contract - A mutually binding legal relationship obligating the seller to furnish supplies or services (including construction) and the buyer to pay for them.

Contracting - Purchasing, renting, leasing, or otherwise obtaining supplies or services from nonfederal sources. Contracting includes the description of supplies and services required, the selection and solicitation of sources, the preparation and award of contracts, a

Contracting Officer - A person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings.

Contractor Team Arrangement - An arrangement in which (a) two or more companies form a partnership or joint venture to act as potential prime contractor; or (b) an agreement by a potential prime contractor with one or more other companies to have them act as its subcontractors under a

Corporation - A group of persons granted a state charter legally recognizing them as a separate entity having its own rights, privileges, and liabilities distinct from those of its members. The process of incorporating should be completed with the state’s secretary of

Costs - Money obligated for goods and services received during a given period of time, regardless of when ordered or whether paid for.

Credit Rating - A grade assigned to a business concern to denote the net worth and credit standing to which the concern is entitled in the opinion of the rating agency as a result of its investigation.

Current Assets - Cash and other assets that are expected to be converted into cash within the next twelve months. Examples include such liquid items as cash and equivalents, accounts receivable, inventory and prepaid expenses.