- salary-reduction plan
- A retirement plan in which money is taken automatically from employees’ salaries and put in a retirement fund, such as a 401(k).
- sales tax
- A tax levied by state and local governments, usually as a percentage of retail sales.
- securitization
- The conversion of loans and other bank assets into securities that can be traded in the securities market. Securitization enables banks to obtain capital.
- security agreement
- A document that gives a lender a claim to the assets that the borrower has put up as collateral for a loan. The security agreement must be signed by the borrower to be valid.
- self-directed IRA
- An individual retirement account (IRA) that allows its owner to decide how the funds should be invested.
- self-insurance
- A rainy day fund set aside for emergencies, illness, and periods of unemployment.
- senior lien
- When two or more liens have been placed on a property, the senior lien takes precedence over other liens and must be satisfied first. The senior lien is the first mortgage on the property.
- settlement date
- The actual date of the transfer of a security from the buyer to the seller.
- severally but not jointly
- In a stock offering, when the people selling the stock are each responsible for selling their part, but not for selling the entire offering. In a jointly but severally arrangement, all parties are responsible for the sale of the offering.
- sheriff’s sale
- An auction of a borrower’s property as part of a foreclosure. The proceeds go to help pay the borrower’s debts.
- short sale
- Selling a stock one does not own with the idea of making a profit by rebuying the stock later when the price goes down. A short sale works like this: The short seller, believing the stock will fall in price, has his or her broker “borrow” the stock from one of the broker’s clients. The stock is sold. The buyer of the stock gets the shares the broker borrowed. Meanwhile, with luck, the stock drops in value. The short seller buys the stock at the reduced price and returns the shares through the broker to the person they were borrowed from. The short seller keeps the profits, unless of course the stock went up instead of down after it was “borrowed.” If the stock went up, the short seller still must buy the shares in order to return them to the person they were borrowed from, and the short seller must buy the shares at the higher price.
- short-term gain
- For the purpose of determining capital gains and losses, a gain on an investment that was held for less than a year. Whether an investment gain is short-term or long-term is important because long-term capital gains sometimes receive preferential treatment.
- signature loan
- A loan given without collateral, but with only the borrower’s promise to pay and his or her signature on a promissory note. Such loans are given on the basis of the good standing of the borrower.
- Simple IRA
- A simplified pension plan for small businesses wanting to provide their employees with retirement savings options. Simple IRAs work much like 401(k)s—but at a much lower administrative cost to the employer.
- Simplified Employee Pension Plan (SEP)
- A retirement plan for small businesses. It allows small business people to set aside a specific percentage of their gross income for retirement.
- sole proprietorship
- When a business is owned by one person. A sole proprietorship is one of two types of common law business structures; the other is a partnership.
- specific identification method
- In an inventory, when each item is identified and accounted for. In some other types of inventorying methods, similar items are grouped.
- stale check
- A check that is more than six months old.
- statute of frauds
- A legal statute that says a contract cannot be enforced unless it has the signature of the person against whom it is being enforced. In the case of a mortgage or other assumable debt, the signature of the borrower is required.
- statute of limitations
- A limit on the time within which a legal action can be brought or a file claimed.
- subsidiary corporation
- A company that is owned wholly or partly by another company, called the parent company. The parent company usually owns a majority of the stock in the subsidiary.
- surplus
- The amount by which a company’s assets exceed its liabilities and capital stock, as shown on the company’s balance sheet.