economics 3 – Flashcards
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unlimited liability
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required that an owner is personally and fully responsible for all loss and debts
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inventory
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stock of goods held in reserve; includes finished goods waiting to be sold and raw materials to be used in production
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limited life
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situation in which a firm legally ceases to exist when an owner dies, quits, or a new owner is added; applies to sole proprietorships and partnerships
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limited partnership
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form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business
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bankruptcy
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court-granted permission to an individual or business to cease or delay payment on some or all debts for a limited amount of time
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charter
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written government approval to establish a corporation; includes company name, address, purpose of business, number of shares of stock, and other features of the business
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stock
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certificate of ownership in a corporation; common or perferred stock
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stockholder
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person who owns a share or shares of stock in a corporation; same as shareholders
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shareholder
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stockholder
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dividend
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check paid to stock holders, usually quarterly, representing portion of corporate profits
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bond
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formal contract to repay borrowed money and interest on the borrowed
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principle
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amount borrowed when getting a loan or issuing a bond
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interest
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payment made for the use of borrowed money; usually paid at periodic intervals for long term bonds or loans
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double taxation
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feature of taxation that allows stockholders' dividends to be taxed both as corporate profit and as personal income
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merger
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combination of two or more business enterprises to form a single firm
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income statement
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report showing a business's sales, expenses, and profits for a certain period, usually three months for a year
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net income
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measure of business profits determined by subtracting all expenses, including taxes, from revenue
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Cash flow
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total amount of new funds the business generates from operations; broadest measure of profits for a firm, includes both net income and non-cash charges
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horizontal merger
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combination of two or more firms producing the same kind of product
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vertical merger
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combination of firms involved in different steps of manufacturing and marketing
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conglomerate
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firm with four or more businesses making unrelated products, with no single business responsible for a majority of its sales
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multinational
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corporation producing and selling without regard to national boundaries and whose business activities are located in several different countries
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nonprofit organization
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economic institution that operates like a business but doesn not seek financial gain ; schools, churches, community service organizations
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cooperative
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nonprofit association performing some kind of economic activity for the benefit of its members
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co-op
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cooperative
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credit union
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nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services
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labor union
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organization that works for its members; interests concerning pay, work hours, health coverage, fringe benefits, and other job related matters
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collective bargaining
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process of negotiation between union and management representatives over pay, benefits, and job related matters
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professional association
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nonprofit organization of professional or specialized workers seeking to improve working conditions, skill levels, and public perceptions of its profession
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chamber of commerce
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nonprofit organization of local business value whose purpose is to promote their interest
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better business bureau
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business sponsored non profit organization providing information on local companies to consumers
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public utility
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company providing essential services such as water and electricity to consumers, usually subject to some government regulations
