A type of negotiable instrument, also known as a "draft", which is a signed, unconditional, written order by the drawer, directing the drawee to pay a fixed sum of money to a third party (the payee) at a determined future date.
For example, a check is a type of bill of exchange.
A contract in which both parties exchange promises to perform. Compare: unilateral contract
A unit that denotes a change in the interest rate of a financial instrument and is equal to 1/100th of 1% or 0.01%.
The final, oversized payment due at the maturity date of a loan. Typically used in car or home loans, the balloon payment consists of the remaining balance due under a loan, including any unpaid principal and interest.
A financial statement that consists of a three-part summary of a company's assets, liabilities, and ownership equity at a particular instance in time. It is intended to show the financial condition of a company at that time.
The balance sheet states the assets on one side and the liabilities and equity, together, on the other side. Both sides must balance out with each other.
The amount of debt still due under an account or the principal balance remaining on a promissory note.
An agent authorized to act on behalf of another person, but not necessarily authorized to practice law, e.g. a person authorized to act by a power of attorney. An attorney in fact is a fiduciary. Also known as attorney in fact or private attorney.
Definition
Of or relating to transactions between two parties who are independent and do not have a close relationship with each other. Presumably, these parties have equal bargaining power and are not subject to undue pressure or influence from the other party. Transactions of this nature do not give rise fiduciary duties between the parties.
A mortgage loan where the interest rate may change in accordance with designated market indicator (such as the LIBOR), as opposed to a set interest rate (such at 6% annually).
One method of accounting where economic events, such as income and expenses, are recorded at the moment they are incurred, as opposed to when they are received. This provides a more accurate statement of the current financial state of a company and is the method more frequently used by companies.
