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ABC Method

A method of classifying inventory items with categories which are of high-value, less costly, and/or low-cost items.

Accident & Health Insurance

Insurance against loss through accident or sickness

Actuating (Directing)

Regulating the activities or course of activities of an organization; to guide and /or supervise the activities of an organization.


The art of making the public aware of the services or commodities that a business has for sale.

Advisory Board

The business governance board which helps make major decisions for the funeral home, but does not deal with the daily operations.

After Care

See Post-Need Services.

Age Discrimination in Employment Act

Federal legislation that requires employers to treat applicants and employees equally regardless of age.

Aging Schedule

A grouping of accounts receivable into age categories based upon the length of time they have been outstanding on the company record.

Americans with Disabilities Act (ADA) -

legislation that guarantees disabled people equal access to employment, as well as access to public places


Private investors who are willing to supply financing for new and/or risky small venture start-ups.

Articles of Partnership

A written document that states explicitly the rights and duties of partners in a partnership.

Artisan Entrepreneur

A person who starts a business with primarily technical skills and little business knowledge.

Automobile Insurance

Insurance covering motor vehicles

Average Collection Period

A measure of the accounts receivable turnover.

Better Business Bureau

Association of business firms that promotes ethical conduct by all business firms in a community.

Board of Directors

The governing body that is elected by the stockholders of a corporation.

Bona Fide Occupational Qualification (BFOQ)

A qualification that is absolutely necessary for the job; it is an allowed and approved reason for discrimination.

Book Value

The cost of a fixed asset less accumulated depreciation.


The identification for a product.

Break-Even Analysis

The point at which total sales revenue equals total costs.


A formal written statement, which may be based upon adjusted historical data, of management's plans for the future expressed in financial terms.


The forcible breaking and entering of premises closed for business with the subsequent removal of cash or merchandise.


An organization that combines inputs of raw materials, capital, labor, and management skills to produce useful outputs of goods and services so as to earn a profit.

Business Interruption Insurance

An insurance that protects companies during the period necessary to restore property damaged by an insured peril.

Business Plan (New Venture Plan)

A written description of a new idea that projects marketing, operational, and financial aspects of a proposed business.

Business Policies

Fundamental statements that serve as guides to management practice.

Buy-Sell Life Insurance

Insurance on an owner of a business that will supply enough money for a partner to buy his share of the business on death


The amount by which the total assets exceed the total liabilities of a business; an owner's financial interest in a business.

Cash Discounts

2/10, n/30 - 2% discount if paid in 10 days from date of invoice/net amount must be paid within 30 days of date of invoice.

Casualty Insurance

Insurance that provides monetary benefits to a business that has experienced an unforeseen peril such as flood, fire, etc.

Caveat Venditor

Let the seller beware.

Census of Business

A source of market data that explains where certain businesses are located.

Census of Housing

A source of market data that keeps track of new home sales by region and/or the construction of new houses by region and specific area.

Census of Manufacture

A source of market data that explains where certain manufacturers are located.

Census of Population

A source of market data that compiles population statistics with regard to distribution of population by region, area, etc.

Chain of Command

The superior-subordinate relationship that serves as a channel for two-way communication.

Chamber of Commerce

An accociation of business people who attempt to protect and promote the commercial interest in a community.

Circulating Capital (Working capital)

The difference between current assets and current liabilities.

Civil Rights Act of 1964

Federal legislation that prohibits discrimination on the basis of race, color, religion, sex, or national origin.

Closed end credit (Installment credit)

Balance of costly goods paid for in small monthly (fractional) payments over a period of

Coinsurance Clause

A clause in an insurance policy under which the insured agrees to maintain insurance equal to some specified percentage of the property value or otherwise to assume a portion of any loss.


The family pattern in which the family members work together.


The practice of trying to obtain something that is being sought by others under similar circumstances at the same time.

Conflicted familial pattern

The family pattern in which the family members work against one another instead of together.


The merchandising agreement whereby merchandise is given to a retailer to sell, but the retailer does not have to pay for the merchandise that will be displayed until it is sold.

Consumer Credit

A type of credit granted by retailers that is used by individuals or families for satisfaction of their own wants.

Consumer Credit Protection Act

An act which requires a seller to disclose terms of sale and give facts of actual interest rate and other charges.


The emphasis placed on providing to customers products and services that are safe, reliable, and honestly advertised; also, a social movement that seeks to strengthen the rights of consumers relative to sellers.

Controlling (Evaluating)

A management function which compares organizational and individual performance with predetermined standards or expected results.


The registered right of a creator to reproduce, publish, and sell the work which is the product of the intelligence and skill of that person.

Corporate Refugees

Those individuals who flee the bureaucratic environment of big business by going into business for themselves.


An artificial being, invisible, intangible, and existing only in contemplation of law; an entity that is something that has a distinct existence separate and apart from the existence of its individual members.

Corporation Charter

The written application for permission to incorporate that is approved by a state official.


An agreement that payment for a product or service will be made at some later date.

Credit Bureau

An organization of retailers and other firms in a given community that serves its members by summarizing their credit experience with particular individuals.

Credit Insurance

Insurance that protects non-retailing businesses from abnormal bad-debt losses.

Current Ratio

The current assets divided by the current liabilities and a measure of the liquidity of the business.

Debt Equity (Debt Capital, Borrowed Capital)

Any borrowed or loaned capital invested in the business that must be repaid to creditors.

Deductible Clause

Insurance policy provision that makes the insurer liable only for losses in excess of the stated deductible.

Delegation of Authority

A superior's act of granting to subordinates, on the basis of competence, the right to act or decide.


The statistical study of human populations with respect to their size, density, distribution, composition, and income.


Refers to those activities which encourage subordinates to work toward the achievement of the company's goals.

Directing (Actuating)

Regulating the activities or course of activities of an organization; to guide and/or supervise the activities of an organization.


A sudden misfortune, resulting in the loss of life and/or property.

Earnings Valuation Approach

A business valuation approach which centers on estimating the amount of potential income that may be produced by the business in the next year.

Economic Base

The wealth produced in or near a community that provides employment and income to the local population.

Economic Order Quantity (EOQ)

The quantity to be purchased which minimizes total costs.


An unforeseen combination of circumstances that results in a need for immediate action.

Employment Application

A record of statements made at the time the applicant first seeks employment.

Employment Interview

The primary way of judging the job applicant's appearance, poise, speech, etc.

Endowment Life Insurance

Life insurance that allows the insured, rather than the beneficiary, to collect the face value of the policy upon maturity or to collect that value in annual payments.


One who organizes, manages, and assumes the risk of a business firm or venture.

Equal Credit Opportunity Act

The absence of employment discrimination based on race, color, religion, sex, or national origin.

Equal Employment Opportunity

The absence of employment discrimination based on race, color, religion, sex, or national origin.

Equal Pay Act

Outlaws discrimination in pay against those who are over forty years old.

Equity capital (Personal capital)

Capital that is invested in the business by the owner(s).

Evaluating (Controlling)

A management function which compares organizational and individual performance with predetermined standards or expected results.

Facilities Management

The obtaining and maintaining of adequate work space and funeral equipment.


Obtaining cash before payments are received from customers by selling off one's accounts receivables to a third party.

Fair Credit Reporting Act

An act which requires creditors to notify a potential recipient of credit whenever any adverseaction or denial of credit was based on a credit report.

Fair Labor Standards Act (Wage and Hour Law)

Outlaws discriminatory practices in pay; requires employers to pay a minimum wage to employees, and to pay a minimum of one and one-half times the regular rate for any hours worked eyond forty in a week.


The business function of effectively obtaining and using funds.

Financial Management

The efficient utilization and adequate regulation of assets, revenue, expenditures, and capital rights.

Fixed Capital

Long-term capital that is invested in the small business; also, funds invested in such long-term assets as: land, building, machinery, furniture, fixtures, and other equipment.

Fixed Expenses

A cost that, for a given period of time and range of activity called the relevant range, does not change in total but becomes progressively smaller on a per unit basis as volume increases;

Fixed Expenses

these expenses do not increase with increased business, nor do they decrease with declining business activity.

Follow-up Services

See Post-Need Services.


An entrepreneur who brings a new firm into existence.


An entrepreneur whose power is limited by a contractual relationship with a franchising organization.

Funeral Service Management

The administration of a funeral service enterprise, the activities of which encompass marketing, office, personnel, facilities, and financial management.

General Liability Insurance

Insurance covering business liability to customers who might be injured on or off premises or from the product sold to them.

General Manager

An entrepreneur who functions as an administrator of a business.

General Partner

A partner in a limited partnership who has unlimited personal liability. A partner of a partnership who is personally liable for the debts of the business


Broad statements about what an organization wants to achieve; developed in the strategic planning process; they form the basic plan or direction toward which decisions and activities are focused.(Goals are motivational in nature and are usually stated in broad, general terms without reference to a time period.) [See also Objectives.]


An intangible asset such as the name of a funeral home; also, an intangible asset which enables a business
to earn a profit in excess of the normal rate of profit earned by other businesses of the same kind.

Human Relations

Motivating people in organizations to develop teamwork which effectively fulfills their needs and achieves organizational objectives.

Human Resource Forecast

Determining personnel needs in terms of numbers of individuals and their required skills.

Human Resource Management (Personnel Management)

Process of acquiring, training, developing, motivating, and appraising a sufficient quantity of qualified employees to perform necessary activities; and developing activities and an organizational climate conducive to maximum efficiency and worker satisfaction.

Human Resource Planning

Developing a comprehensive strategy for meeting future human resource needs.

Immigration Reform Act

Federal legislation requiring employers to check job applicants' papers to be sure they are either U.S. citizens or aliens authorized to work in the U.S.


The introduction of something new; a new idea, method, or device.

Installment Credit (Closed End Credit)

Balance of costly goods paid for in small monthly (fractional) payments over a period of time.


Uneventful protection for the small business or small business owner in regards to monetary compensation in the event that a business and/or personal peril is experienced.

Intangible Asset

Those assests that cannot be touched or grasped (examples include patents, copyrights and goodwill).


The dependency of businesses on one another.


A job-analysis technique in which individuals currently holding a particular job are asked questions concerning the requirements of the job.

Inventory (Merchandise)

Those goods or stock of goods which are held for resale at a profit.

Inventory Turnover

The number of times the average inventory has been sold or used up during a period.

Job Analysis

A process for determining the critical components of a job for purposes of selecting, training, and rewarding personnel.

Job Description

A document that list the major responsibilities and tasks of the job.

Job Specification

A document that lists the knowledge, skills, abilities, and personal characteristics a job holder must possess to perform effectively.

Key-Person Life Insurance

Life insurance that protects a firm against losses due to the death of a key employee.


The business pattern in which the family members do not interfere with each others departments or responsibilities.

Legal Entity

A business organization that is recognized by the law as having a separate legal existence.

Liability Insurance

Insurance that covers business liability to customers of others who might be injured from the product sold to them.

Life Insurance

Insurance that provides death benefits to the survivors of the insured.

Limited Liability Company (not corporation)

New form of business ownership (approved in most states since approximately 1994); combines aspects of partnerships with the limited liability of a corporation; owners known as members

Limited Partner

A partner in a limited partnership who is not active in its management and has limited personal liability.

Liquidation Value (Market Value) Approach

The anticipated value of an asset that would be realized in case of liquidation of the business.


The art and science of motivating people toward the achievement of a goal.

Manufacturing business

A business that makes finished goods from raw materials by hand or machinery.


A reduction of selling price below the original selling price.


A group of potential customers possessing purchasing power and unsatisfied needs.

Market Survey

A study that is used by a business to determine where the potential customers are located.

Market Value Approach

An approach used in business valuation which determines value based upon previous sales of similar businesses.


The process of planning and executing the development, pricing, promotion, and distribution of an organization's goods/services.

Marketing Management

The process of planning and executing the development, pricing, promotion, and distribution of an organization's goods and/or services.


The difference between merchandise cost and selling price, i.e., gross margin.


The family pattern in which the mother is in charge.


Those goods or stock of goods which are held for resale at a profit.

Merchandising business

A business that purchases finished goods for resale.


A claim given by the borrower to the lender against the borrower's property in return for a loan.

Mortgage Loan

A loan secured by a mortgage on property.


Energizing, channeling and sustaining people's behavior.

New venture plan (Business Plan)

A written description of a new idea that projects marketing, operational, and financial aspects of a proposed business.


Specific statements of ends, the achievement of which are contemplated within a specific time period. used in the management control process, and provide a quantitative and time framework to the organization's goals. Objectives are intended to be accomplished by a specific date and are stated in specific terms, preferably in such a way that there is some measurable basis for determining the extent to which they have been achieved.) [See also Goals.]

Occupational Safety and Health Act (OSHA)

Federal legislation that mandates that employers provide a workplace that is free from hazards likely to cause death or serious physical harm.

Office Management

The administration and supervision of office duties and functions.

Open End Credit (Revolving account)

A line of credit that may be used over and over again up to a certain borrowing limit.

Operating Ratios

A comparison of profit and each item of expense in the income statement expressed as a percentage of sales the operating ratios can be compared to the industry standard in regards to measuring the possible growth of the business.

Opportunistic Entrepreneur

A person who starts a business with both sophisticated managerial skills and technical knowledge.


To arrange or constitute in interdependent parts, each having a specific function or relation with respect to the whole; the arrangement and distribution of work among members of an organization.


Expenses incurred in the normal operation of a business.

Overseer Board

The business governance board which makes most decisions for a family funeral home, including the decisions made during the daily operation.

Paper Board of Directors

The business governance board which exists only on paper and never holds true meetings.


The business pattern in which all family members participate in the operations, decisions or profits of the funeral home.


The voluntary association of two or more people who have combined their resources to carry on as co-owners of a lawful enterprise for their joint profit.


The registered right of an inventor to make, use, and sell an invention.


The business pattern in which the parent is in control.

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