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Wiley GAAP 2008 by Colorado Steven M. Bragg Englewood, Ralph Nach American Express Tax and Business Inc., Barry J. Epstein

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Definitions of Terms

Accounts receivable loanA loan collateralized by the accounts receivable of the borrower.
Dealer reservesFinance company liabilities for dealers' shares of finance charges on retail contracts purchased from dealers.
Direct consumer loanA two‐party transaction in which the finance company lends funds directly to the borrower; such a loan may or may not be collateralized.
DiscountAmount deducted from the face value in advance as a charge for the loan or a deduction for interest at the time of the loan or any charge for credit that is precomputed and included in the face of the instrument.
Discount loanA loan that is written with the interest or finance charges included in the face amount of the note. Discount loans are also called precompute or add‐on loans.
Effective interest rateThe implicit rate of interest based on the amount advanced and the amount and timing of the specified repayments over the period of the contract.
FactorA company that engages primarily in factoring.
FactoringPurchase, usually without recourse, of individual accounts receivable arising in the client's ordinary course of business. Under a factoring agreement, the finance company also provides credit checking, collection, and recordkeeping services.
Floor plan checkingPhysical inspection of dealer's inventories that are collateral for advances to the dealer to be repaid from the proceeds from sale of specific items. Sometimes referred to as floor plan auditing.
Floor planningFinancing of dealers' ...

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