Accounting Terminology Guide

C

C
Cafeteria Plan

A benefit plan maintained by an employer for the benefit of the employees under which each participant has the opportunity to select the benefits they desire. Certain minimum choices and nondiscriminatory rules apply.

Call Loan

Loan repayable on demand. Also known as DEMAND LOAN.

Call Price

A specified price, usually above face value, at which a CORPORATION may, at its option, buy back and retireBONDS before maturity.

Callable

Redeemable by the issuer before the scheduled maturity.

Callable Instrument

BOND which accords an issuer the right to redemption before it is due.

Capital Asset Pricing Model (CAPM)

Sophisticated model of the relationship between expected risk and expected return.

Capital Expenditure

Outlay of money to acquire or improve capital assets such as buildings and machinery.

Capital Gain

Portion of the total GAIN recognized on the sale or exchange of a noninventory asset which is not taxed as ORDINARY INCOME. Capital gains have historically been taxed at a lower rate than ordinary income.

Capital Projects Funds

Funds used by a not-for-profit organization to account for all resources used for the development of a landimprovement or building addition or renovation.

Capital Stock

Ownership shares of a CORPORATION authorized by its ARTICLES OF INCORPORATION. The money lassigned to a corporation's issued shares. The BALANCE SHEET account with the aggregate amount of the PAR VALUE or STATED VALUE of all stock issued by a corporation.

Capitalize

Convert a schedule of INCOME into a principal amount, called capitalized value, by dividing by a rate ofINTEREST.

Capitalized Cost

Expenditure identified with goods or services acquired and measured by the amount of cash paid or the market value of other property, CAPITAL STOCK, or services surrendered. Expenditures that are written off during two or more accounting periods.

Capitalized Interest

INTEREST cost incurred during the time necessary to bring an ASSET to the condition and location for its intended use and included as part of the HISTORICAL COST of acquiring the asset.

Capitalized Lease

LEASE recorded as an ASSET acquisition accompanied by a corresponding LIABILITY by the LESSEE.

CAPM

Sophisticated model of the relationship between expected risk and expected return.

Carrying Value

Amount, net or CONTRA ACCOUNT balances, that an ASSET or LIABILITY shows on the BALANCE SHEET of a company. Also known as BOOK VALUE.

Carryovers

Provision of tax law that allows current losses or certain tax credits to be utilized in the tax returns of future periods..

Cash

ASSET account on a balance sheet representing paper currency and coins, negotiable money orders and checks, bank balances, and certain short-term government securities.