Glossary > Glossary > C
You can follow the links below to browse all of the articles, or use the search box at the right-hand side of each page. If you want to discuss problems or ask questions about our software, please use our discussion boards.
C
Capital: Applies to unincorporated businesses only. It is the original owners’ investment plus net profit and any additional investments or contributions less drawings. Also referred to as “owner’s equity.”
Capital Assets: All long-lived, tangible or intangible assets. A capital asset contributes to the operations of the business throughout its service life. All capital assets (except land) are depreciated over its useful life.
Capital Cost Allowance: The tax-deductible amount charged to allocate the cost of tangible assets over one or more fiscal periods for income tax purposes only. Not the same as depreciation! In farm statements where historical balance sheets are not available and therefore there is no consistent method of calculating depreciation, capital cost allowance (CCA) is used as depreciation expense.
Capital Gain: Profit on the sale or disposition of a capital asset. A gain resulting from a scaling-down of business debts, as in a re-organization, an arrangement with creditors, or a purchase of the company’s own bonds at a discount. Under income tax legislation, the amount by which proceeds on the disposition of a long-term asset in excess of the asset’s original cost.
Capital Loss: In taxation, it is defined as the deficiency between the amount of the proceeds on the disposition of a long-term, non-depreciable asset and its original cost.
Capital Stock: The ownership interest represented by shares of a corporation.
Capital Surplus: The excess received over the par or stated or legal value of the shares issued. For example, if 100 shares having a par value of $5 per share are sold for $55 per shares, a capital surplus of $5,000 results ($55- $5x100).
Cash: Includes all current account bank balances plus petty cash balance. If the total is negative (as appears on many in-house accounting packages) the balance should be shown in current liabilities as a bank overdraft or
operating loan.
Cash Advance: Amounts owed to purchasers of product, which are paid in advance of receiving the product. These debts are a form of operating credit and should be included in Other Current Liabilities on the balance sheet. E.g. CWB Cash Advance.
Cash Flow: A very important figure, it is a measure of the usable profit in a business. Calculated by adding net profit and all non-cash expenses (usually depreciation and amortization). Cash receipts less cash disbursements.
Cash Method of Accounting: Revenue is recognized only when cash is received and expenses are recognized only when cash is paid out.
CCA Class: Assets of the same type are places in the same Capital Cost Allowance class. All assets in a class are depreciated at the same rate.
Common Stock: The class of capital stock representing the residual equity in the company’s assets and earnings.
Consolidated Financial Statements: The combination, into an overall report, of the financial positions and earnings reports of the parent company with those of various subsidiaries, as if they were a single entity.
Contributed Capital: The amount of a limited company’s paid-up capital plus contributed surplus.
Contributed Surplus: Surplus contributed by shareholders that comprises the premium received on the issue of par-value shares, the portion of proceeds from the issue of no-par value shares that has been allocated to surplus, the proceeds of sale of donated shares, the profit on forfeited shares, the credit resulting from redemption or conversion of shares at less than the amount set up as share capital, or any other contributions in excess of the stated value of shares made by shareholders as such; or capital donations from sources other than shareholders.
Corporation: A separate legal entity formed or incorporated under the laws of a province or the federal government.
Cost of Goods Sold: The direct costs of producing or providing the business’s goods or services. Includes inventories at beginning of year less inventories at end of year, plus whatever direct labour and overhead it is conventional to apply. Also referred to as cost of sales.
Current Assets: Cash or other assets expected to be converted into cash or consumed in the production process within one year or within the normal operating cycle (where the cycle is longer than a year). E.g. cash, accounts receivable, market livestock, feed, crop inventory on hand.
Current Liability: A liability that will be payable within the current year or within the normal operating cycle (where the operating cycle is longer than a year). E.g. accounts payable, cash advance, operating loan, current portion of term debts.
Current Portion of Long Term Debt/Current Term Debt: The principal portion of all long-term debt that is due within the next 12 months. Common abbreviation used is “CPLTD.”
Last updated on February 17, 2015 by FCC AgExpert