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GLOSSARY
Charge off
A charge off is an expense line item on a company's income statement. The charge off could be related to uncollectible accounts receivable, or a devaluation of the company's assets. In order to reduce the balance sheet account in question (i.e., the accounts receivable balance or the book value of a devalued asset), the company must take a charge against its earnings.
Chargeback
A chargeback is an adjustment to a credit card account that results from the cardholder's successful resolution of a dispute with a merchant. The chargeback reverses a charge previously placed on the account. A cardholder would dispute a charge if goods or services purchased were not delivered as expected, or if the purchase in question was unauthorized by the cardholder.
Charitable contribution deduction
A charitable contribution deduction is a tax break earned for donating funds or items to a qualified charity. The charitable contribution deduction is reported as an itemized deduction on a tax return.
Charitable donation
A charitable donation is a gift of money or property that's given to a nonprofit organization or charity. Many nonprofit organizations rely on charitable donations for continued funding. It's common for taxing authorities like the IRS to provide tax breaks to individuals and commercial entities that make qualifying charitable donations.
Charitable lead trust
A charitable lead trust is a financial arrangement that's designed to reduce the tax burden associated with assets to be inherited. The charitable lead trust is typically set up by the owner of an estate while that owner is still living. Income from the estate is donated to charitable organizations to offset the estate's tax liability. Once the taxes are reduced and the owner has passed, the principal can be transferred to the beneficiaries, who would face a significantly lower tax burden.
Charitable remainder trust
A charitable remainder trust is a financial arrangement designed to reduce the income tax liability associated with an estate. Income from the estate is distributed to the beneficiaries for a certain period of time. At the end of that specified period, the entire estate is transferred to designated charity organizations. In doing so, the capital gains tax associated with the donated assets is eliminated.
Charter
A charter is the legal documentation of a corporation's creation and structure. In the U.S., a charter is issued or approved by the state government. The document usually defines the name, location, and primary business activity of the corporation.
Chattel
Chattel is a synonym for personal property, meaning property other than real estate.
Chattel mortgage
A chattel mortgage is a debt facility that's secured by personal property. Chattel mortgages can be used to finance mobile homes, as long as the home isn't permanently affixed to the land. The lien would pertain to the home only, but not the land.
Check
A check is a negotiable draft that directs a bank to pay a certain amount of money to a specific payee. The funds to make this payment would come from the checkwriter's deposit account that's held with the bank.
Check clearing
Check clearing is the process of moving a cash payment as directed by a check from the account where the check was drawn to the account where the check was deposited.
Check hold
Check hold is the time period for which a banking institution waits before releasing funds associated with a deposited check.
Check kiting
Check kiting is a means of using two deposit accounts to withdraw money illegally from the bank. The accountholder writes a check from one account, even though the account doesn't have the necessary funds to cover the check. That check is then deposited into a second account, and a withdrawal is made before the bank realizes that the deposited check will be returned for insufficient funds.
Check representment
Check representment is the process of repeatedly attempting to deposit a check that's been returned for insufficient funds until the necessary funds appear and the check can be paid.
Check safekeeping
Check safekeeping is a service that banks provide to their checking accountholders. Copies of canceled checks aren't returned to the accountholder each month, but instead, are held by the bank. Accountholders may request copies of specific checks, if necessary.