The process by which the payee transfers ownership of a financial instrument, such as a check, to another party by signing their name on the back of it.
Using Endorsement in an Example
When John received a check made out to him, he endorsed it by signing his name on the back before depositing it into his bank account.
Using Endorsement in a sentence
Make sure you endorse the check on the back before you attempt to cash or deposit it.
Related Terms
EITC
A refundable tax credit provided by the U.S. federal government to eligible low-income workers, which varies based on the number of qualifying children and the worker's income, with specific phase-in and phase-out levels.
The Emerging Issues Task Force (EITF) assists the Financial Accounting Standards Board (FASB) by providing guidance on early identification of emerging issues affecting financial reporting and addressing problems in implementing authoritative pronouncements.
Earnings Per Share (EPS) is a financial metric calculated by dividing the net earnings of a company by the average number of shares outstanding during a specific period, indicating the company's profitability on a per-share basis.
An Employee Stock Ownership Plan (ESOP) is a stock bonus plan where employees acquire securities issued by their employer, enabling them to gain ownership interest in the company.
A refundable tax credit available to eligible low-income workers, which varies based on the number of qualifying children and the worker's income, with specific income thresholds determining the phase-in and phase-out of the credit amount.
A financial metric calculated by dividing a company's net earnings by the average number of shares outstanding during a specific period, indicating the amount of profit each share of stock generates.
Econometrics is the application of statistical and mathematical models to analyze economic data, aiming to test hypotheses and forecast future trends. It involves the use of techniques to describe the relationships between economic variables such as labor, capital, interest rates, and government policies.
The social science that studies the production, distribution, and consumption of goods and services, and the various related economic theories and behaviors of individuals, households, and institutions.
A method of amortizing bond discounts or premiums by applying a constant interest rate to the carrying value of the bonds at the beginning of each interest period.
The annual interest rate that accounts for compounding over a given period, representing the actual financial cost of borrowing or the earnings on savings.
A specialized group that assists the Financial Accounting Standards Board (FASB) by providing guidance on the early identification and resolution of emerging issues affecting financial reporting and the implementation of authoritative pronouncements.
A compensation arrangement, typically documented and utilized by employers in addition to wages, which may include benefits such as life insurance, medical insurance, and qualified retirement plans. These plans can be either defined benefit plans, promising specified benefits based on age, years of service, and compensation, or defined contribution plans, where benefits are based on contributions to individual accounts by both employer and employee, as well as investment returns. Common plans include profit-sharing, employee stock ownership plans, and 401(k) plans, often receiving favorable tax treatment.
An Employee Stock Ownership Plan (ESOP) is a stock bonus plan that allows employees to become owners of stock in the company they work for. This plan is often used as a corporate finance strategy and an employee benefit plan, where securities issued by the employer are acquired and held, typically in a trust, for the benefit of the employees.
An encumbrance refers to any claim, lien, charge, or liability attached to and binding real property that may lessen its value or obstruct the use of the property. This can include mortgages, leases, or restrictions that affect the property.
A document prepared by an auditor that summarizes all significant findings or issues encountered during an audit. This document provides detailed insights necessary for a reviewer to thoroughly understand the significant findings or issues identified during the audit process.
A person who initiates, organizes, and operates a new business venture and assumes the financial risks associated with it, often involving innovation and the potential for growth.
Equity represents the ownership value in an entity, calculated as the residual interest in the assets of the entity after deducting its liabilities. It is reflected in the balance sheet as the difference between total assets and total liabilities and includes investments in stock markets and ownership interests in various forms of property.
An account in the equity section of the balance sheet that includes elements such as capital stock, additional paid-in capital, and retained earnings, representing the owner's claims on the assets of the business after all liabilities have been deducted.
A method of accounting used by an investor to account for long-term investments in equity securities of an affiliate where the investor has significant influence over the investee. The investor's cost basis is adjusted in proportion to their percentage of stock ownership based on the investee's retained earnings fluctuations. Significant influence is often presumed if the investor owns 20% or more of the voting stock.
Securities that represent ownership shares in a corporation or entity, including stocks and other instruments that confer legal rights to acquire or hold capital stock.
A tax imposed on the total value of a deceased person's assets minus liabilities and certain allowable deductions, including funeral and administrative expenses.
Income items that are explicitly exempted from being included in a taxpayer's gross income by the Internal Revenue Code or administrative actions, such as gifts, inheritances, and death proceeds from life insurance contracts.
An individual or institution appointed by a will and confirmed by a court to administer the estate of a deceased person, managing assets, paying debts, and distributing the remaining estate according to the terms of the will.
An organization that is generally exempt from paying federal income tax, which may include entities such as religious organizations, charitable organizations, and social clubs.
An amount of income that is not subject to tax, granted by the IRS to individuals, trusts, and estates, which reduces the gross income to arrive at taxable income. Exemptions can also be claimed for dependents unless they are claimed on another individual's tax return.
A tax imposed on individuals who renounce their citizenship or terminate their long-term residency, primarily if the termination is for the purpose of avoiding tax responsibilities.
The difference in perception between the public and Certified Public Accountants (CPAs) regarding the roles and responsibilities of accountants, particularly in the context of accounting and auditing services.
An expense refers to the cost incurred for goods or services used in the generation of revenue, which is recorded in the accounting periods to which they are relevant.
An auditor who possesses a deep understanding of audit activities, has comprehensive knowledge of the client's industry, and is well-versed in the accounting and auditing issues relevant to that industry.
Exploration expenditures refer to the costs incurred in the search for natural resources such as minerals, oil, or gas. These costs can include geological and geophysical surveys, exploratory drilling, and the evaluation of the technical feasibility and commercial viability of extracting the resources.
A document issued by standard-setting authorities such as the American Institute of Certified Public Accountants (AICPA), Financial Accounting Standards Board (FASB), or Governmental Accounting Standards Board (GASB) to invite public comment before a final standard or regulation is issued.
In accounting and finance, an extension refers to the additional time granted by a taxing authority, such as the IRS, or through voluntary arrangements to restructure a firm's debt, allowing for a postponed payment or filing date beyond the original schedule.
The scope and depth of procedures an auditor applies to obtain evidence about the effectiveness of a company's internal controls over financial reporting, including the controls for all internal control components.
The process of providing financial information about a company to external stakeholders, such as investors, creditors, regulators, and the public, which is distinct from internal reports used for management's decision-making.
Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, reported separately on the income statement after accounting for taxes to highlight their impact on financial performance.
