| Term | Definition |
|---|
| sole propietorship (adv-disadv) | simple to start, owner keeps all profits, owned by one person who makes decisions but need much money to start up, debt not shared, owner responsible for all debts |
| unlimited liability | the owner is personally and fully responsible for all losses and debts of business |
| inventory | a stock of finished goods and parts in reserve |
| limited life | the firm legally ceases to exist when the owner dies, quits, or sells the business |
| partnerships (adv-disadv) | each partner offers special skills, losses are shared but partners may disagree |
| bankruptcy | a court granted permission to delay debt payments |
| corporation (adv-disadv) | capital can be aquired by issueing stock, stable and not dependent on owner involvement |
| charter | a government document that gives permission to create a corporation is granted |
| stock | ownership certificates in the firm |
| stockholders/shareholders | investors with stock |
| dividend | a check representing a portion of the corporate earnings |
| bond | a written promise to repay the amount borrowed at a later date |
| principal | the amount borrowed |
| interest | the price paid for borrowing peoples money |
| double taxation | stockholders' dividends are taxed twice: once for corporate profit and again for personal income |
| income statement | a report showing a business' sales, expenses, and profits for a certain period |
| net income | the result of subtracting all of its expenses, and profits for a certain period |
| depreciation | a non-cash charge the firm takes for the general wear and tear on capital goods |
| cash flow | the sum of net income and non-cash charges such as depreciation. |
| merger | when two firms come together as one large entity |
| reasons for merger | grow faster, more efficient, eliminate rival, change image |
| horizontal merger | when 2 or more firms that make the same kind of product |
| vertical merger | when firms involved in different steps of manufacturing join together |
| conglomerate | a firm that has at least four businesses each making unrelated products |
| multinational | a corporation that has manufacturing operations in different countries |
| nonprofit organization | operates in a business like manner to promote the collective interests of its members |
| cooperative/co-op | voluntary association formed to carry on some kind of economic activity |
| credit union | financial organization that accepts deposits from, and makes loans to, employees of a company |
| labor union | an organization formed to represent its member's interests in employment matters |
| collective bargaining | when a labor union negotiates with a firm over employment issues |
| professional association | a group of people in a specialized occupation that improves the working enviroment |
| chamber of commerce | promotes welfare of its members and of community |
| better business bereau | a non-profit organization sponsored by local businesses to provide general info on companies |
| direct role of government | government directly interfers with the economy as a regulator |
| TVA | Tennesse Valley Authority |
| FDIC | Federal Deposit Insurance Corporation |
| USPS | United States Postal Service |
| indirect role of government | the government steps in to provide competition in a certain market so others can thrive |
| public utilities | investor or municipal owned companies that offer important products to the public, such as water and electricity |
Combine with other sets
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