Here is a glossary of financial terms J. These financial terms begin with the letter J, including journal entry and junk bonds.
A journal is where financial transactions are first recorded in chronological order. Each transaction is called a journal entry. The journal is called the book of original entry. Journal entries are later posted to the ledger.
A journal entry records a business transaction in a company’s accounting records. A list of journal entries is called a journal. In accounting, journal entries are made using a system of debits and credits. In each journal entry, debits must equal credits.
Journal entries use the five types of accounts.
In accounting, the five types of accounts are:
- assets: resources owned by a business; what the company owns
- liabilities: debts of the company; what the company owes
- equity: claim on the assets by the owners; calculated as equity = assets – liabilities; equity is the net worth of the company
- revenues: when a business receives assets from selling products and services
- expenses: when a business uses or consumes assets to create revenues
A bond that is less than investment grade is called a junk bond. These junk bonds are more speculative and include a higher return and default risk.
Bonds with a credit rating of BB or lower are considered junk bonds. Investment grade bonds are AAA to BBB rated.
The three major credit rating agencies are:
- Standard & Poor’s
Jeff Mankin teaches financial literacy and Excel. He is the founder of Finally Learn.