Bellevue & Seattle, WA Tax, Accounting, QuickBooks, Business Consulting: Stephen L. Nelson, CPA

Accounting Terms-F

face value
The principal of a stock, bond, or other security. Also the principal of an insurance policy. Face value is sometimes called par value.

fair market value
The reasonable price of an asset. Fair market value is the price that a willing seller and buyer would negotiate for an asset, given that both know all the facts and are not under compulsion to buy or sell.

Federal Unemployment Tax
Tax paid on wages and salaries to pay for federal and state unemployment programs.

fiat money
Money not backed by gold.

fidelity bonds
Bonds that bankers purchase from insurance companies to protect themselves against robbery, employee fraud, and other wrongdoings. In some states, banks are required to purchase fidelity bonds.

fiduciary
A person who manages someone else’s investments.

finance charge
The cost of interest payments, filing fees, and other costs apart from the actual cost of an item. The finance charge is what you pay when you finance a purchase.

Financial Accounting Standards Board (FASB)
The board that establishes rules for certified public accountants (CPAs). This board also determines the generally accepted accounting principles.

financial planning
Counseling by financial planners to help individuals get the highest returns for their investments.

fiscal year
A period of 12 months for which a company plans its budget and reports on its financial activity. The fiscal year and the calendar year often do not coincide; the fiscal-year can begin at any point in the calendar year.

fixed asset
A tangible asset, such as equipment, that a company cannot dispose of without interrupting normal business activities.

fixed-rate loan
A loan whose rate of interest does not change.

fixture
Personal property that becomes part of real property because of the way in which it is used. Fixture is a legal term. If you build shelves into a wall in your rented apartment, they become a fixture; that is, they are a part of the rental property.

forbearance
Not seeking penalties against a borrower in default, on the condition that the borrower will fulfill obligations in the future.

foreclosure
Legal proceeding in which a lender attempts to obtain the collateral that was secured for a defaulted loan.

forged check
A check whose drawer signature or endorsement signature is not valid.

forgery
Fraudulently altering a document, such as a check.

Form 1099
The disclosure form filed with the IRS that lists all independent contractor income and all unearned income from stocks, bonds, interest, and the like.

franchise
A business arrangement whereby one party is allowed to use another party’s name for a fee. Fast-food eateries are the best examples of franchises.

franchise tax
A tax imposed by a state on a business headquarters outside the state that does business in the state.

fraud
Intentional deception undertaken to trick someone else into parting with something of value. No legal definition of fraud exists.

future value
The value that a stock, bond, or commodity will attain in the future.

futures
Commodities to be delivered and paid for at a future date at a price agreed upon by the buyer and seller.

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