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factor: To sell accounts receivable at a discount before they are due.

fair market value: The current value of an asset, e.g., the amount at which an asset could be sold or purchased in an arm's-length transaction.

FASB (Financial Accounting Standards Board): The private organization responsible for establishing the standards for financial accounting and reporting in the United States.

FCPA (Foreign Corrupt Practices Act): Legislation requiring any company that has publicly-traded stock to maintain records that accurately and fairly represent the company's transactions; additionally, requires any publicly-traded company to have an adequate system of internal accounting controls.

FICA (social security) taxes: Federal Insurance Contributions Act taxes imposed on employee and employer; used mainly to provide retirement benefits.

FIFO (first-in, first-out): An inventory cost flow whereby the first goods purchased are assumed to be the first goods sold so that the ending inventory consists of the most recently purchased goods.

financial accounting: The area of accounting concerned with reporting financial information to interested external parties.

Financial Accounting Standards Board (FASB): The private organization responsible for establishing the standards for financial accounting and reporting in the United States.

financial statements: Reports such as the balance sheet, income statement, and statement of cash flows, which summarize the financial status and results of operations of a business entity.

financing activities: Transactions and events whereby resources are obtained from, or repaid to, owners (equity financing) and creditors (debt financing).

fiscal year: An entity's reporting year, covering a 12 month accounting period.

floor: The minimum market amount at which inventory can be carried on the books; equal to net realizable value minus a normal profit.

FOB (free-on-board) destination: A business term meaning that the seller of merchandise bears the shipping costs and maintains ownership until the merchandise is delivered to the buyer.

FOB (free-on-board) shipping point: A business term meaning that the buyer of merchandise bears the shipping costs and acquires ownership at the point of shipment.

Foreign Corrupt Practices Act (FCPA): Legislation requiring any company that has publicly-traded stock to maintain records that accurately and fairly represent the company's transactions; additionally, requires any publicly-traded company to have an adequate system of internal accounting controls.

franchise: An entity that has been licensed to sell the product of a manufacturer or to offer a particular service in a given area.

freight-in: An account used with the periodic inventory method for recording the costs of transporting into a firm all purchased merchandise intended for sale; added to purchases in calculating cost of goods sold.

functional currency: The currency in which a subsidiary conducts most of its business; generally, but not always, the currency of the country where it does most of its spending and earning.  

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