J
 

journal
The book where documents (checks, etc) are first recorded into the bookkeeping system.
Computers have changed the method of bookkeeping but not the underlying concepts. There still must be a way to track figures from the financial statements back to original documents.


journal entry
The process of recording in a journal the original documents, such as checks. Also the entry of adjustments to correct account balances at the end of an accounting period such as monthly, quarterly, or yearly.


joint tenancy with right of survivorship (JTROS)
A type of ownership of property where each owner has an undivided ownership. When one of the joint tenants dies, his or her interest passes to the surviving joint tenants. Before you decide to transfer property or to change the form of ownership of property you already own, consult with your attorney as to what form of ownership is best for you.
See also tenants in common.


joint and several liability
An obligation where the makers are both individually and jointly liable. This allows the creditor to sue one or all for payment of an obligation. On a joint income tax return, a husband and wife are usually jointly and severally liable. The IRS can collect any tax due from either or both spouses.
See innocent spouse relief.


joint and survivor life insurance
An insurance policy in which the benefits are only paid after the death of both of the insured parties.


joint return
This is an income tax filing status for married couples. If your state of residence recognizes common-law marriages, the IRS will allow the use of a joint return. Your marital status on December 31st of a given year will govern your tax filing status for that year. If each spouse has separate income, a joint return can result in a marriage tax penalty (more tax than if they were two single taxpayers).


joint venture
A joint venture is somewhat like a partnership, but is usually formed by two or more persons for a single purpose as opposed to most partnerships that are formed for ongoing business. For income tax purposes, it may be treated as either a corporation or a partnership.


junk bond
These are high-risk bonds with low credit ratings. They usually pay a higher interest rate than other bonds to make them more marketable.

K
 

Keogh plan
Under tax law, a retirement plan available to self-employed people. Also referred to as H.R. 10 plans. As with all qualified retirement plans, there are very specific contribution and filing rules that change on a regular basis. Contributions to a Keogh are tax-deductible.


key man (person) insurance
A life insurance policy that covers the life of a key employee of the company. It is payable to the company upon the death of the named employee. Losing a key employee can be costly to some companies in terms of training replacement personnel and in terms of customer and creditor confidence. The life insurance proceeds will help offset lost time, lost sales, and possibly lost lines of credit.


kiting
An unauthorized system of borrowing money by taking advantage of the float (the time it takes a check to clear the bank). Checks are drawn on a bank account that has insufficient funds. This account is then covered by a check on a second bank account that also has insufficient funds. By using several banks, the scheme can go on for some time before being detected.

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