Question 1

Accounts Payable

Accepted Answer

A record of all short-term (less than 12 months) invoices, bills and other liabilities yet to be paid. Examples of accounts payable include invoices for goods or services, bills for utilities and tax payments due.

Question 2

Accounts Receivable

Accepted Answer

A record of all short-term (less than 12 months) expected payments, from customers that have already received the goods/services but are yet to pay. These types of customers are called debtors and are generally invoiced by a business.

Question 3

Accounts Receivable Finance

Accepted Answer

See Factoring

Question 4

Accrual Accounting

Accepted Answer

An accounting system that records transactions at the time they occur, whether the payment is made now or in the future.

Question 5

Adverse Credit

Accepted Answer

this is the expression used to describe a poor/ bad credit history. For example it may be used to describe someone with a history of late payments, CCJs or bankruptcy

Question 6

AIP (Agreement in Principle

Accepted Answer

An Agreement in Principle is confirmation that a lender is prepared to advance a loan to a potential borrower subject to being satisfied with the security offered – i.e. a positive Decision in Principle.

Question 7

ALIE (assets liabilities income expenditure)

Accepted Answer

This typically shoes the total household income and expenditure and what the total asset values are liabilities that are held.

Question 8

Amortisation

Accepted Answer

The process of expensing for intangible assets such as goodwill and intellectual property over a period of time. See also Depreciation.

Question 9

APR (Annual Percentage Rate

Accepted Answer

The Annual Percentage Rate provides an indication of the overall cost of a loan including all set up costs (spread over the life of the loan) and interest charged on the loan. You can compare APR rates between different loans to provide a rough indication of which is more expensive, regardless of loan term. The lender is obliged to tell you the APR before you sign a loan agreement.

Question 10

Arrangement Fee

Accepted Answer

This is the amount charged by a lender to set up the mortgage for you. It is usually due when the loan application is completed and may be added to the loan.

Question 11

Arrears

Accepted Answer

Someone is in arrears if they have missed payments that they should have made towards their mortgage or other debt.

Question 12

Assets

Accepted Answer

Are things you own. These can be cash or something that can be converted into cash such as property, vehicles, equipment and inventory.

Question 13

AST (Assured Shorthold Tenancy

Accepted Answer

An Assured Shorthold Tenancy entitles the landlord to a possession order immediately after the initial agreed period, which is usually for six months. The landlord is therefore able to evict the tenant after the initial fixed term without a legal reason.

Question 14

Audit

Accepted Answer

A physical check performed by an auditor or tax official on a business’ financial records to check that everything is accounted for correctly.

Question 15

Authorised Firm

Accepted Answer

A firm that has the necessary permissions from the FCA (or its successor bodies) to carry out regulated activities – e.g. arranging residential mortgages or insurance.

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