Workers' Compensation

A system whereby an employer must pay, or provide insurance to pay, the lost wages and medical expenses of an employee who is injured on the job.  Workers' compensation law is governed by statutes in every state. Specific laws vary with each jurisdiction, but key features are consistent. An employee is automatically entitled to receive certain benefits when he/she suffers an occupational disease or accidental personal injury arising out of and in the course of employment.

Warranty Deed

A warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer).


A document issued by a legal or government official authorizing the police or some other body to make an arrest, search premises, or carry out some other action relating to the administration of justice.


A legal arrangement that transfers control over property to a person or organization for the benefit of someone else.

Testamentary Trust

A legal and fiduciary relationship created through explicit instructions in a deceased's will. A testamentary trust goes into effect upon an individual's death and is commonly used when someone wants to leave assets to a beneficiary, but does not want the beneficiary to receive those assets until a specified time. Testamentary trusts are irrevocable.


An involuntary fee levied on individuals or corporations that is enforced by a government entity, whether local, regional or national in order to finance government activities.

Surrender Value

The sum that an insurance company pays a policyholder when they cancel a life insurance policy before its date of maturity; this value is usually lower than the value of the policy when it matures.


The paper that tells a defendant that he or she is being sued and asserts the power of the court to hear and determine the case. A form of legal process that commands the defendant to appear before the court on a specific day and to answer the complaint made by the plaintiff.


A document; historically, a physical certificate but increasingly electronic, showing that one owns a portion of a publicly-traded company or is owed a portion of a debt issue.

Secured Loan

A loan that is borrowed against a particular asset, known as security; if a person cannot make the repayments when they are due, the lender can take ownership of the asset.

Return on Investment

The money that a person or company earns as a percentage of the total value of his/her/its assets that are invested. Because it is easy to calculate the return on investment, it is a relatively popular measure of the profitability on an investment and can help in making investment decisions.

Real Property

Any subset of land that has been legally defined and the improvements to it have been made by human efforts: buildings, machinery, wells, dams, ponds, mines, canals, roads, etc.


A document from a public company that wishes to sell shares to the public, giving details of the company’s past performance and its plans for the future.

Pro forma

A financial projection based on assumptions. Also, refers to a statement of income and balance sheets that exclude non-recurring items. A financial statement that a company or an organization  prepares to consider the effects of a potential activity. A pro forma financial statement can be part of the risk analysis of a situation.

Personal Property Tax

The involuntary fee levied on individual property owners by the county or state government. Usually assessed as a percentage of the value of an item. They can fall under county or state taxes, depending on where you live. Not all states tax personal property, however, and what is subject to personal property tax varies widely from state to state.


Action from a bank or credit union that lets a person access more money than they have in their account, for a charge.  All institutions have policies on overdraft limits.

Non-profit 501(c)3

One of 29 types of nonprofit organizations which are exempt from federal income taxes.  Each local Church of the Nazarene is a part of the Church of the Nazarene Inc. 501(c)3 and documentation is available at the General Secretary’s Office. 


An organization that has been formed by a group of people in order "to pursue a common not-for-profit goal", that is, to pursue the stated goal expressly without the intention of distributing excess revenue (i.e. profit) to members or leaders. 

Non-exempt Employees

A category of employees entitled to overtime pay and minimum wage as described in the Fair Labor Standards Act (FLSA).  Non-exempt employees must be paid for each hour that they work and 1.5x their hourly wage for any hours worked over 40. Employees who earn less than $455/week and those who do not use personal discretion and independent judgment at least 50% of the time are considered non-exempt.


A settlement of a dispute or controversy by setting up an independent person between two contending parties in order to aid them in the settlement of their disagreement.

Managed Fund

The money of individual investors. The combined capital invested by a professional fund manager, in some cases being applied across a range of asset classes such as stocks, bonds, property, or infrastructure assets.


Improper, illegal, or negligent professional activity or treatment, by someone considered a professional (physician, lawyer, public official, minister, counselor). 

Living Will

A written statement detailing a person's desires regarding their medical treatment in circumstances in which they are no longer able to express informed consent.  (See also Advance Directive.)


A right to keep something owned by someone who owes a debt, until the person has repaid the debt.

Junk Bond

A stock that is issued by a company with a poor financial record to help it repay its debts and that carries a higher risk than other bonds but offers higher returns. 

Joint Tenancy

A type of shared ownership of property, where each owner has an undivided interest in the property. This type of ownership creates a right of survivorship, which means that when one owner dies, the other owners absorb the deceased owner's interest.

Investment Portfolio

Includes transactions in equity securities, such as common stock, and debt securities, such as banknotes, bonds, and debentures. Portfolio investments are passive investments, as they do not entail active management or control of the issuing company.


To allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future. In finance, the expected future benefit from investment is a return that may consist of capital gain and/or investment income, including dividends, interest, rental income etc.

Hedge Fund

A private investment fund that is open to a limited range of investors and is allowed to make more risky and short-term investments than other funds to earn as much as possible.


A person who looks after and is legally responsible for someone who is unable to manage their own affairs, especially an incompetent or disabled person or a child whose parents have died.

Fund Accounting

An accounting system emphasizing accountability rather than profitability, used by non-profit organizations. In this system, a fund is a self-balancing set of accounts, segregated for specific purposes.



Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower, who has stopped making payments to the lender, by forcing the sale of the asset used as the collateral for the loan.

Fixed Costs

A cost that does not change with an increase or decrease in the amount of goods or services produced by a company or the activity of an organization.  Fixed costs are expenses that have to be paid by an organization, independent of any activity or change in income.

Financial Statements

Financial statements for businesses usually include income statements, balance sheets, statements of retained earnings and cash flows. It is standard practice for businesses to present financial statements that adhere to generally accepted accounting principles (GAAP) to maintain continuity of information and presentation across international borders.

Federal Income Tax

The involuntary fee levied on individuals' income by the federal government. All wages are subject to Federal Income Tax, however ministers do not have to pay Federal Income Tax on properly authorized and validated housing allowance.

Estate Planning

Estate planning is the process of anticipating and arranging, during a person's life, for the disposal of their estate. Estate planning can be used to eliminate uncertainties over the administration of a probate and to maximize the value of the estate by reducing taxes and other expenses.


The power of a state to acquire title to property for which there is no owner.  The most common reason that an escheat takes place is that an individual dies intestate, meaning without a valid will indicating who is to inherit his or her property, and without relatives who are legally entitled to inherit in the absence of a will.


Selling off, usually in relation to the parts of a company that are not performing well or no longer fit in with the company’s wider plans.


A sum of money placed or kept in a bank account.  A sum payable as a first installment on the purchase of something or as a pledge for a contract, the balance being payable later. 


A document that confirms a person owns a particular property, usually given as security for mortgages.

Debit Card

A plastic card that can be used instead of cash to pay for goods and services, or to withdraw money from an ATM.  The transaction is immediately withdrawn from a bank or credit union account.


A document issued by a company, usually to a bank or credit union, that acknowledges that some or all of the organization’s assets are security for a debt.

Death Taxes

A tax on the transfer of the estate of a deceased person. The tax applies to property that is transferred via a will or according to state laws of intestacy.  In addition to the federal estate tax, many states have enacted similar taxes. These taxes may be termed an “inheritance tax.”

Credit Rating

A score of a person’s ability to repay debt such as loans and credit card bills.  The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.

Cost Accounting

A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step of production as well as fixed costs such as depreciation of capital equipment.

Cash Card

Also known as an ATM card – a plastic card that a person can use only at cash machines with a personal identification number (PIN) to withdraw cash, check their balance or print out a mini-statement.


An organization's internal operating rules.  (The bylaws of each local Church of the Nazarene is the Manual of the Church of the Nazarene.)


A written promise made by governments and companies to repay any money borrowed, with interest, on a certain date in the future.

Balance Sheet

A summary of an organizations assets (what it owns), liabilities (debts it owes) and equity (net worth) at a point in time.  Assets are listed on the left-hand side liabilities and equities are listed on the right-hand side. 


A tax-sheltered investment sponsored by an insurance company that pays earnings and also has a death benefit. A regular amount paid out to someone from an investment that is linked to a managed fund.

Advance Directive

An advance health care directive, also known as living will, personal directive, is a legal document in which a person specifies what actions should be taken for their health if they are no longer able to make decisions for themselves because of illness or incapacity.


A plan of spending over a certain length of time, based on how much income a person(s) or organization anticipates having.


An independent examination of an organization’s records and accounts to make sure that they show a fair, accurate and legal reflection of the financial position of the company at the accounting date. Audits can be either internal or external.

Housing Allowance

A designated portion of a pastor’s salary (officially designated in advance of payment) for the amount actually used to provide or rent a home not to exceed the fair market rental value of the home (including furnishings, utilities, garage, etc.).