Month: January 2020

Under reporting is a term describing the crime of intentionally reporting less income or revenue than was actually received. Companies and individuals chiefly under report their incomes in an effort to avoid or reduce their respective tax liabilities. Under reporting is not a victimless crime. In fact, the billions of dollars of tax loss revenue caused by under reporting reduces the funds with which the federal government relies on to finance Social Security, Medicare, and a host of other programs. read more

Founded in 1966, the Asian Development Bank’s (ADB) headquarters are in Manila, Philippines. The Asian Development Bank’s primary mission is to foster growth and cooperation among countries in the Asia-Pacific Region.

Paid-in capital is the amount of capital paid in by investors during common or preferred stock issuances, including the par value of the shares themselves plus amounts in excess of par value. Paid-in capital represents the funds raised by the business through selling its equity and not from ongoing business operations.

A loan application fee is a fee charged to a potential borrower for processing an application for a loan. Loan application fees can be required for all types of loans and are intended to pay for the costs of the process of loan approval.

A lender of last resort (LoR) is an institution, usually a country’s central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky or near collapse. In the United States, the Federal Reserve acts as the lender of last resort to institutions that do not have any other means of borrowing, and whose failure to obtain credit would dramatically affect the economy.

Underapplied overhead occurs when an accounting record in the cost accounting method includes overhead costs that are assigned to a work-in-progress product does not reach the amount of the actual overhead costs. Underapplied overhead is reported as a prepaid expense on the company’s balance sheet and, at the end of the year, it is balanced by inputting a debit to cost of goods sold. Costs of goods sold are the direct cost associated with the production of goods sold by a company. The amount of underapplied overhead is referred to as an unfavorable variance. read more

In marketing terminology, perceived value is the customers’ evaluation of the merits of a product or service and its ability to meet their needs and expectations, especially in comparison with its peers.

The key rate is the specific interest rate that determines bank lending rates and the cost of credit for borrowers. The two key interest rates in the U.S. are the discount rate and the federal funds rate.

The accounting rate of return (ARR) is the percentage rate of return expected on investment or asset as compared to the initial investment cost. ARR divides the average revenue from an asset by the company’s initial investment to derive the ratio or return that can be expected over the lifetime of the asset or related project. ARR does not consider the time value of money or cash flows, which can be an integral part of maintaining a business.

A variable-rate demand note (VRDN) is a debt instrument that represents borrowed funds that are payable on demand and accrue interest based on a prevailing money market rate, such as the prime rate. The interest rate applicable to the borrowed funds is specified from the outset of the debt and is typically equal to the specified money market rate plus an extra margin.