DECA Week 1 Prep

Acreage

A given area of land measured in acres

Tort

A violation of a duty imposed by law, rather than a breach of a contract

Sovereign immunity

A legal principle that a government is immune from being sued or having its assets seized without its consent

Punitive damages

Money awarded to a plaintiff in a civil case in addition to compensatory damages, to punish the defendant for egregious conduct

phishing

Criminals impersonate financial institutions to trick individuals into revealing sensitive information

Ponzi Scheme

A fraudulent investment scam that uses money from new investors to pay profits to earlier investors, rather than from legitimate earnings

Pyramid Scheme

an illegal money-making system where participants primarily earn money by recruiting new members who pay a fee to join, rather than by selling actual products

Pump and Dump

Fraudsters spread false information to create a buying frenzy that will pump up the price of a stock then dump shares of the stock by selling their shares.

Roth IRAs

a type of Individual Retirement Arrangement where contributions are made with after-tax dollars, and qualified distributions of earnings and withdrawals in retirement are tax-free

Tax-deductible

able to be deducted form taxable income when calculating income tax due

Acknowledgement letter

a formal, written confirmation of the receipt of a document, item, inquiry, or event

Claim letter

a formal written communication that outlines a problem and requests a specific resolution 

Letters of transmittal

a brief, formal cover letter that accompanies a larger document, report, or physical item, serving as a record of its delivery and proving context to the recipient

Grapevine Communication

the informal, unofficial, and often rapid spread of information, rumors, or gossip among people within an organization

Matrix Structure

a grid-like work structure where employees report to two or more managers simultaneously, blending a traditional functional hierarchy with project-based teams

Tentative Agreement

the stage at which union and management have agreed on the terms of a contract but still need union members to approve or reject the contract

Contract settlement

occurs when a ratified contract has been signed by union and management

Prompt Payment Act

a 1982 federal law requiring U.S. government agencies to pay contractors on time for goods and services, establishing deadlines and mandating interest penalties for late payments

Credit Card

allows you to borrow money from a card issue to make purchases up to a set limit

Debit Card

a payment card that withdraws funds directly from your checking or savings account to pay for goods and services

Capital Markets

financial markets where long-term debt and equity securities, such as stocks and bonds, are issued and traded to raise capital and facilitate investment

Treasury Bills

short-term debt securities issued by the U.S. government to fund government operations, sold at a discount to their face value and redeemed at par value at maturity

Certificate of Deposit

a low-risk savings account with a fixed interest rate and fixed term

Overhead expenses

also called indirect costs, are the necessary expenses a business pays to support operation but aren’t directly tied to production

No-load fund

a type o mutual fund that you can buy or sell without paying a sales commission or sales charge

Derivative

a contract whose value is based on an underlying asset rather than the asset itself

Venture capital

investment money given to startups and young companies with high growth potential in exchange for ownership

Emerging markets

countries with economies that are transitioning from developing to developed

Accounts receivable

money a business is owed by its customers for goods or services sold on credit

electronic funds transfer

electronic process of moving money between bank accounts

liquidity

the ability of an individual or company to settle short-term liabilities easily and on time

Accounts payable

money a company owes to its suppliers for goods or services purchased on credit, typically paid within 30 to 90 days

Retained earnings

a portion of a company’s accumulated profits that are kept within the business rather than being paid out to shareholders as dividends

Dividends

a distribution of a company’s earnings to its shareholders, acting as a reward for owning stock in a profitable company

Depreciation

an accounting method that spreads the cost of a tangible business asset over its useful life, reflecting its gradual decrease in value

Bad debt

an account receivable that a lender determines to be uncollectible from a debtor, typically due to the debtor’s inability to pay

Debt financing

the process of a business borrowing funds from an external lender, with the promise to repay the principal amount plus interest over a set period

Vertical analysis

an individual calculates each individual item on a financial statement as a percentage of the total

Horizontal analysis

sometimes known as trend analysis, involves analyzing dollar amounts on financial statements for a single company across several years

Ratio analysis

involves the calculation of ratios based on a company’s financial data

Balance Sheet Equation

Assets = Liabilities + Equity

Principle of least authority

any user, system, or process should only be granted the minimum privileges and access necessary to perform its specific, intended function

Underwriter

In the insurance industry, they are responsible for calculating the risk of loss, setting premium rates, and designing policies to cover risk.

Trade association

a non-profit membership organization where businesses in the same industry join together to promote their common interests, improve business conditions, and share resources

Captive insurance company

a subsidiary or wholly-owned insurance company established by a parent organization to insure its own risks and those of its affiliates