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protocol
ofbusiness, entertaining, negotiating, politics, etc. 2. Product development: Statement of attributes (features and benefits) that a new product must be designed to have. A product protocol is prepared byconsulting all parties (customers, marketing, production, distribution) to theproject. 3. Technology: Set of agreed upon, and openly published and distributed, standards that enables different firms to manufacture compatible devices to the same specifications. All devices made under the same protocol work with one another without any adjustment or modification.1. General: Unwritten rules or guidelines that are peculiar to every culture ororganization, and are supposed to be observed by all parties in the conduct

common stock
Type of security that serves as an evidence of proportionate ownership, imparts proportionate voting rights, and gives its holder unlimited proportionate claim on the assets and income of the firm (after the claims of lenders, and other obligations, are satisfied). Common stock

constitutes the equity capital (also called risk capital) of the firm which is never paid back (redeemed), and is lost if the firm fails. Common stock usually has a par value (amount for which each share is sold for when first issued) but has no guaranteed value afterwards. In bad years, common stock holders may receive little or no income (dividends) at all. But, in good years, there is no limit to the amount they may receive except the limits imposed by the ...

supply chain Entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer. It comprises of vendors that supply raw material, producers who convert the material into products, warehouses that store, distribution centers that deliver to the retailers, and retailers who bring the product to the ultimate user. Supply chains underlie value-chains because, without them, no producer has the ability to give customers what they want, when and where they want, at the price they want. Producers compete with each other only through their supply chains, and no degree of improvement at the producer's end can make up for the deficiencies in a supply chain which reduce the producer's ability to compete.

delivery 1. General: Formal and voluntary transfer of possession by actual (physical) delivery, constructive delivery (by an agreement or understanding), or symbolic delivery (by documents) Also called presentation or presentment. 2. Futures trading: Transfer of

a cash commodity from the seller of a futures contract to its buyer, in accordance with the rules of a particular futures exchange. 3. Real estate: Final, unconditional, and absolute transfer of the deed to the buyer (the grantee) in such manner that it cannot be recalled by the seller (the grantor). Even a properly executed deed normally does not pass title until it is delivered to the grantee. See also livery. 4. Shipping: Transfer of a shipment's copy of the bill of ...
capital expenditure (CAPEX)
An amount spent to acquire or upgrade productive assets (such as buildings, machinery and equipment, vehicles) in order to increase the capacity orefficiency of a company for more than one accounting period. Also called capitalspending.

meritocracy
Governance by elites who deserve to wield power because they possess merit (defined as 'intelligence plus effort') instead of by those who merely possess wealth or belong to privileged classes. Such a system, in theory, forms the basis of an 'equal opportunity' society. But, in practice, unrestricted meritocracy may result in a society without rules and

concentrate power in only a few hands. The term was coined by the UK sociologist Michael Young in 1958 book, 'The Rise Of Meritocracy.'

default
1. General: Failure to do something required by an agreement, in the performance of a duty, or under a law. 2. Borrowing: Failure to meet the terms of a loan agreement. Its two types are (1) Fiscal: Failure to make repayment on the due date. Generally, if a payment is 30 days overdue, the loan is in default. (2) Covenantal: Failure to live up to one or more covenants of the loan agreement such as exceeding the prescribed totalborrowings. 3. Computing: Attribute, option, or value assumed by a computer when a user has not chosen or supplied any. Computer's choice is based on how the elements of a software or the settings of a hardware have been arranged by the manufacturer, or customized by the user. 4. Contractual: Failure to comply with the terms of a contract. Most contracts make provisions for handling defaults by including the conditions or procedures for arbitration, compensation, or litigation. 5. Legal: Failure to do something required under a legislation or as ordered by a court, such as not making an appearance to answer charges.

accountability
The obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner. It also includes the responsibility for money or other entrusted property.

overhead
1. Resource consumed or lost in completing a process, that does not contribute directly to the end-product. Also called burden cost. 2. Accounting: A cost or expense (such as for administration, insurance, rent, and utility charges) that (1) relates to an operation or the companyas a whole, (2) does not become an integral part of a good or service (unlike raw material or direct labor), and (3) cannot be applied or traced to any specific unit of output. Overheads are indirect costs. 3. Data communications: Data bits added to user-transmitted data, for carrying routing information and error correcting and operational instructions. 4. Utilities: Energy or water lost during delivery from the generating or production plant to the end user.
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prudence

PRICE

A value that will purchase a finite quantity, weight, or other measure of a good or service. As the consideration given in exchange for transfer of ownership, price forms the essential basis of commercial transactions. It may be fixed by a contract, left to be determined by an agreed upon formula at a future date, or discovered or negotiated during the course of dealings between the parties involved. In commerce, price is determined by what (1) a buyer is willing to pay, (2) a seller is willing to accept, and (3) the competition is allowing to be charged. With product, promotion, and place of marketing mix, it is one of the business variables over which organizations can exercise some degree of control. It is a criminal offense to manipulate prices (see price fixing) in collusion with other suppliers, and to give a misleading indication of price such as charging for items that are reasonably expected to be included in the advertised, list, or quoted price.

Also called sale price and selling price.

transaction
General: Agreement, contract, exchange, understanding, or transfer of cash or property that occurs between two or more parties and establishes a legal obligation. Also called booking or reservation.
1.

2. Accounting: Event that effects a change in the asset, liability, or net worth account. Transactions are recorded first in journal and then posted to a ledger. 3. Banking: Activity affecting a bank account and performed by the account holder or at his or her request. 4. Commerce: Exchange of goods or services between a buyer and a seller. Every transaction has three components: (1) transfer of good/service and money, (2) transfer of title which may or may not be accompanied by a transfer of possession, and (3) transfer of exchange rights. 5. Computing: Event or process (such as an input message) initiated or invoked by a user or computer program, regarded as a single unit of work and requiring a record to be generated for processing in a database. In a secure transaction (see ACID qualities) such events are regarded as a single unit of work and must either be processed in their totality or rejected as a failed transaction.

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PRUDENCE
Good judgment or wisdom gained from experience and knowledge, expressed in a realistic and frugal attitude. Prudence, however, is not the

same as grave caution or wariness concerned only with preserving the status quo. If there is no real cause for fear, prudence lies in avoiding excessive deliberations and in thereadiness to sacrifice today's gain for tomorrow's greater gain.

aggregate demand Total level of demand for desired goods and services (at any time by all groups within a national economy) that makes up the gross domestic product (GDP). Aggregate demand is the sum of consumption expenditure, investment expenditure, government expenditure, and net exports.

negligence
Breach of duty of care which results in loss or injury to the person or entity the duty is owed. Negligence usually includes doing something that an ordinary, reasonable, and prudent person would not do, or not doing something such a person would do considering the circumstances, situation, and the knowledge of parties involved. In civil liability (see tort), an aggrieved person or entity is entitled to claim damages in a court. In criminal liability, it is usually an unacceptable defense to claim that one was doing one's best to avoid injury or loss if his or her conduct or performance falls below the expected or required level.

TORT
Generally refers to private (as opposed to public) and civil (as opposed to criminal) offenses for which law may provide monetary compensation (see damages) to the aggrieved party as a remedy. Some torts (such as assault), however, are crimes. Whereas (1) breach of a contract does not ordinarily fall under tort law, negligent driving (a tortious act) by a taxi driver is a breach of contract to carry the passenger safely to his or her destination;

(2) it usually must be shown that the wrong was committed with intention or negligence, tort of strict liability does not require any such proof; (3) common legal relief for a tort is monetary compensation, in some cases (such as nuisance to a neighbor) an injunction to prevent recurrence of the act may be granted; (4) motive with which a tortious act is committed is usually immaterial, in some cases (such as malicious prosecution) presence of malice is essential.
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working capital
1. The cash available for day-to-day operations of an organization. Strictly speaking, one borrows cash (and not working capital) to be able to buy assetsor to pay for obligations. Also called current capital. 2. Accounting: Net liquid assets computed by deducting current liabilities fromcurrent assets. The amount of available working capital is a measure of a firm'sability to meet its short-term obligations. Sources of working capital are (1) net income, (2) long-term loans, (3) sale of capital assets, and (4) injection of fundsby stockholders. Ample working capital allows management to take advantageof unexpected opportunities, and to qualify for bank loans and favorable trade credit terms. In the normal trade cycle of a company, working ...
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Possible uses for a 7(a) Loan might include working capital, new furniture or fixtures, renovation or improvements to business building, machinery or equipment, land and building purchase or lease, and sometimes refinancing of business debt.

interest
Finance: A fee paid for the use of another party's money. To the borrower it is the cost of renting money, to the lender the income from lending it.

Interest on alldebt is normally deductible before taxes are assessed on a company's income.Corporate legislation requires disclosure of interest payable on loans, andcompanies often show a single interest figure in the income statement while providing details in a note that may also include netting out of interest received or some other adjustments. In cost accounting, interest is normally excluded from cost computations on the grounds that (being a payment for capital) it isequivalent to dividend, and hence is a finance item and not a cost item. The rate of interest is usually expressed as ...

prospectus
Legally mandated document published by every firm offering its securities to public for purchase. It must comply with strict legal requirements and is filed for approval with the country's securities inspectorate such as the Securities & Exchange Commission (SEC) of the US, or the Securities & Investment Board (SIB) of the UK. A prospectus must disclose essential information such as (1) firm's objectives, (2) primary business activity, (3) background and qualification of principal officers, (4) current financial position, (5) projectedfinancial statements, (6) assumptions underlying the projections, (7) foreseeable risks to the firm, (8) offeringprice on the stock (shares), and (9) (in case of bonds and notes) how the interest and ... Learn more about this term Usage Example The first place you should look for information when considering investing in a mutual fund is the fund's prospectus.

Java
New generation, general purpose, versatile programming language that can run on virtually any type ofcomputer (is 'platform and device independent'). Developed in 1995 by James Gosling of Sun Microsystems specifically for network-heavy environments such as internet and enterprise intranets), it is a major part of

theinformation infrastructure being developed all over the world. Like the C++ language (on which it is based) Java is object oriented: meaning its programs are built with 'modules' of code (like the Lego bricks) which can be employed in building new programs without rewriting the same code. However (unlike C++) it is an interpreted language and therefore has longer execution time than the compiled languages, although the gaphas ... Learn more about this term Usage Example Mark Hammond is working in this area, with Windows Scripting Host. It is definitely an area where Python fits almost perfectly. That's quite independent from Java, actually..

return on equity (ROE)


Ratio measuring stockholders' (shareholders') profitability, expressed as a percentage of the firm's net worth. ROE indicates a firm's efficiency in applying common-stockholders' (ordinaryshareholders') money. Formula:Net income Net worth.
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") We are quite content to hold any security indefinitely, so long as the prospective return on equity capital of the underlying business is satisfactory, management is competent and honest, and the market does not overvalue the business..

agency
Definition
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Fiduciary relationship between two parties in which one (the 'agent') is under the control of (is obligated to) the other (the 'principal') . The agent is authorized by the principal to perform certain acts, for and on behalf of the principal. The principal

is bound by the acts of the agent, performed in carrying out entrusted duties and within the scope of agent's authority. An agency can be created by (1) express agreement, whether oral or written, (2) implication, based on the custom or practice of the trade, or (3) conduct of the principal. Under the legal doctrine of estoppel, the principal is prohibited from denying the existence of a properly constituted agency. Creation of agency is essential to commercial and financial transactions, because an organization (as a legal entity) can function only through its agents.
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Definition

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A school of economic thought founded by the UK economist John Maynard Keynes (1883-1946) and developed by his followers. In 1936, at the height of the great depression, Keynes' landmark book The General Theory Of Employment, Interest And Money ca used a paradigm shift for economics: it suddenly replaced their emphasis on study of the economic behavior of individuals and companies (microeconomics ) to the study of the behavior of the economy as a whole (macroeconomics). The main plank of his revolutionary theory is the assertion that the aggregate demand created by households, businesses and the government and not the dynamics of free markets is the most important driving force in an economy. This theory further asserts that free markets have no selfbalancing mechanisms that lead to full employment. Keynesian economists urge and justify a government's intervention in the economy through public policies that aim to achieve full employment and price stability. Their ideas have greatly influenced governments the world-over in accepting their responsibility to provide full or near-full employment through measures(such as deficit spending) that stimulate aggregate demand. See also classical economics, neoclassical Economics, new classical economics and supply side economics.

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order
Definitions (4)
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1. Commerce: A confirmed request by one party to another to buy, sell, deliver, or receive goods or services under specified terms and conditions. When accepted by the receiving party, an order becomes a legally binding contract. See also purchase order. 2. Banking: An instrument (such as a check or draft) through which its maker or issuer (drawer) authorizes a bank or other financial institution to pay the stated sum to a named holder (drawee or payee). Such instruments are transferable by endorsement, and thus are negotiable instruments. 3. Law: An authoritative mandate, command, or direction issued by a court under its seal. A final court order is called judgment. 4. Finance: An investor's instructions to a broker or dealer to buy or sell an item in a specified manner. Such orders are of four major types: (1) Limit order, (2) Market order, (3) Open order, and (4) Stop order.
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intranet
Definition
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Internal or private network of an organization based on internet technology (such as hypertext and TCP/IP protocols) and accessed over the internet. An intranet is meant for the exclusive use of the organization and its associates (customers, employees, members, suppliers, etc.) and is protected from unauthorized access withsecurity systems such as firewalls. Intranets provide services such as email, data storage, and search and retrieval functions, and are employed in disseminating policy manuals and internal directories for the employees, price and product information for the customers, and requirements and specifications for the suppliers. Some intranets are confined to a building whereas others span continents.

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intranet
Definition
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Internal or private network of an organization based on internet technology (such as hypertext and TCP/IP protocols) and accessed over the internet. An intranet is meant for the exclusive use of the organization and its associates (customers, employees, members, suppliers, etc.) and is protected from unauthorized access withsecurity systems such as firewalls. Intranets provide services such as email, data storage, and search and retrieval functions, and are employed in disseminating policy manuals and internal directories for the employees, price and product information for the customers, and requirements and specifications for the suppliers. Some intranets are confined to a building whereas others span continents.

Read more: http://www.businessdictionary.com/definition/intranet.htm l#ixzz2dbjAAkpP NEPOTISM Practice its survival.of appointing relatives and friends in one's organization to positions for which outsiders might be better qualified. Despite its negative connotations, nepotism (if applied sensibly) is an important and positive practice in the startup and formative years of a firm where complete trust and willingness to work hard (for little or no immediate reward) are critical for

general ledger
Definition
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repository of the accounting information of an organization in which the summaries of all financial transactions (culled from subsidiary ledgers) during an accounting period are recorded. Also called the book of final entry, it provides the entire data for preparing financial statements for the organization. Read more: http://www.businessdictionary.com/definition/gen eral-ledger.html#ixzz2ZS0RfjjM

accrual basis accounting


A system of accounting based on the accrual principal, under which revenue is recognized (recorded) when earned, and expenses are recognized when incurred. Totals of revenues and expenses are shown in the financial statements (prepared at the end of an accounting period), whether or not cash was received or paid out in that period. Accruals basis accounting conforms to the provisions of GAAP in preparing financial statements for external users, and is employed by most companies except the very small ones (which usecash basis accounting). Also called accrual accounting. See also modified accrual basis accounting.

furlough

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A short or long term period of unpaid leave for employees of a company or government agency, usually resulting from adverse economic conditions. It is usually an alternative to massive layoffs. Due to mandatory sequester cuts, the US

Department of Defense recently began delivering forced furlough days from now until September, causing workers to take 11 unpaid days and lose 20% of their income during this time period.
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option
1. Contract to keep an offer open for a fixed period during which the offeror cannot withdraw the offer. 2. Formal contract between a seller (the optioner) and a buyer (the optionee) the right (but not the obligation) to buy-and-sell (or to buy-or-sell) a specific property or a fixed-quantity of a commodity, currency, or security, at a fixed price (called exercise price) on or up to a fixed date (called expiration date). Optionee pays down only a fraction (called premium or option money) of the full value of the contract, thus obtaining an investment leverage. An option to buy (called call option) is purchased when prices are expected to rise, an option to sell(called put option) when prices are expected to fall, and an option to buy-or-sell ... 3. Employee stock option where key employees are ...

holistic
All encompassing view based on the knowledge of the nature, functions, and properties of the components, their interactions, and their relationship to the whole.

force
1. Law: Power, pressure, or violence, generally of an unlawful nature, directed against a person or thing todamage, harm, or remove it. 2. Mechanics: Dynamic agency or influence that pushes or pulls a body or object. If the body is at rest, a force tends to move it or, if it cannot move, to deform or break it. If the body is already moving, a force tends to change its direction of movement, or to decrease (decelerate) or increase (accelerate) its speed in the direction it is moving. Some forces

(such as drag and resistance) require a contact with the body to effect a change, other forces (such as gravity and magnetism) require the body to be within their field of influence (called force field). The SI unit of force is newton which is defined as ...

fraud
Act or course of deception, an intentional concealment, omission, or perversion of truth, to (1) gain unlawful or unfair advantage, (2) induce another to part with some valuable item or surrender a legal right, or (3) inflictinjury in some manner. Willful fraud is a criminal offense which calls for severe penalties, and its prosecutionand punishment (like that of a murder) is not bound by the statute of limitations. However incompetence ornegligence in managing a business or even a reckless waste of firm's assets (by speculating on the stockmarket, for example) does not normally constitute a fraud. In such cases, the aggrieved party (creditorsor stockholders/shareholders) must prove that at some point they were intentionally deceived on .

recovery
1. Accounting: (1) Absorption of a cost through its allocation to an appropriate account. (2) Collection ofreceivables that were written off as bad debt. 2. Banking: Collection of a loan amount from a borrower in default. 3. Disaster planning: Activities or steps that are to be implemented after a disaster to return all operationsand systems to their normal status. 4. Economics: Phase in an economic cycle where employment and output begin to rise to their normal levels after a recession or slump. 5. Electronic commerce: Ability of a transaction handling system to be restored to its pre-failure state after a system failure so that the processing can resume and transactions, aborted due to the failure, can be resubmitted. 6. Stock market: General rise in prices of securities ...
injunction

Court order forbidding something from being done (prohibitory injunction), or commanding something to be done (mandatory injunction). Injunctions are issued where mere award of damages at the end of a trial would not be satisfactory or effective, or may lead to a greater harm or injustice. Other types of injunctions are (1)Interlocutory (Preliminary): granted provisionally before a trial to maintain the status quo until the court hears both sides before granting a permanent injunction. (2) Permanent (Perpetual): granted after the hearing of a trial. (3) Ex parte, granted after hearing only one party (in case of a great urgency). (4) Interim: granted to restrain the accused until a certain date. (5) Quia timet: granted to prevent a ...

security
1. The prevention of and protection against assault, damage, fire, fraud, invasion of privacy, theft, unlawful entry, and other such occurrences caused by deliberate action. See also safety. 2. Computing: The extent to which a computer system is protected from data corruption, destruction, interception, loss, or unauthorized access. See also secure system. 3. Finance: A financing or investment instrument issued by a company or government agency that denotes anownership interest and provides evidence of a debt, a right to share in the earnings of the issuer, or a right in the distribution of a property. Securities include bonds, debentures, notes, options, shares, and warrants but not insurance policies, and may be traded in financial markets such as ...

constitution
Fundamental and entrenched rules governing the conduct of an organization or nation state, and establishing its concept, character, and structure. It is usually a short document, general in nature and embodying theaspirations and values of its writers and subjects. The oldest (1787) written national constitution is that of the US.

mutual fund

An investment vehicle managed by finance professionals that raises capital by selling shares (called units) in a chosen and balanced set of securities to the public. A mutual fund's capital is invested in a group (portfolio) of corporate securities, commodities, options, etc., that match the fund's objectives detailed in its prospectus. The level of a mutual fund's income from its portfolio determines the daily market value (called net asset value) at which its units are redeemable on any business day, and the dividend paid to its unit holders. Mutual funds are of two main types: (1) open end fund, where the capitalization of the fund is not fixed and more units may be sold at any time to increase its capital base, (2) closed end fund, ...

collateral
1. Secondary, subordinate, or supplementary item accompanying a primary item. 2. Specific asset (such as land or building) pledged as a secondary (and subordinate) security by a borroweror guarantor. The principal security is usually the borrower's personal guaranty, or the cash flow of abusiness. Except for highly creditworthy customers (who can get loans against only their signatures) lendersalways demand a collateral if the primary security is not considered to be reliable or sufficient enough to recover the loan in case of a default. A lien is created when the collateral is registered in the public recordsoffice, giving the registered lender priority over other lenders on the same asset or property. Lenders have the legal right to seize ..

thesaurus
Definition
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Language reference book organized to help in finding words related to a core concept but having different shades of meaning (connotations). Unlike a dictionary (which is organized to help in finding the meaning if you know the word), a thesaurus requires you to know the intended meaning to help find the correct word. Unlike a dictionary of synonyms (which is an alphabetical list of related words) a thesaurus is structured around ideas, and serves as a treasury of knowledge. First English language thesaurus (the 'Roget's Thesaurus') was created in 1852 by the UK surgeon Dr. Peter Mark Roget (1779-1869). The term is derived from the Greek word 'thesauros,' treasure.

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lessee
User or renter of the leased asset or property. In case of capital leases, the lessee is also the 'debtor' to thelessor. When real estate is leased, the lessee is called a tenant.

consumer price index (CPI)


A measure of changes in the purchasing-power of a currency and the rate of inflation. The consumer priceindex expresses the current prices of a basket of goods and services in terms of the prices during the sameperiod in a previous year, to show effect of inflation on purchasing power. It is one of the best known lagging indicators. See also producer price index.

amortization
1. Accounting: Preferred term for the apportionment (charging or writing off) of the cost of an intangible assetas an operational cost over the asset's estimated useful life. It is identical to depreciation, the preferred term for tangible assets. The purpose of both terms is to (1) reflect reduction in the book value of the asset due tousage and/or obsolescence, (2) spread a large expenditure proportionately over a fixed period, and thereby (3) reduce the taxable income (not the actual or cash income) of a firm. In effect, it is a process by which invested capital of a firm is recovered by gradual sale of the firm's asset(s) to its customers over the years. 2. Banking: Gradual repayment of a loan in equal (or nearly equal) installments which ...

CASH FLOW
Incomings and outgoings of cash, representing the operating activities of an organization. In accounting, cash flow is the difference in amount of cash available at the beginning of a period (opening balance) and the amount at the end of that period (closing balance). It is called positive if the closing balance is higher than the opening balance, otherwise called negative. Cash flow is increased by (1) selling more goods or services, (2) selling an asset, (3)

reducing costs, (4) increasing the selling price, (5) collecting faster, (6) paying slower, (7) bringing in more equity, or (8) taking a loan. The level of cash flow is not necessarily a good measure of performance, and vice versa: high levels of cash flow do not necessarily mean high or even any profit; and high levels of profit do not automatically translate into high or even positive cash flow. Read more: http://www.businessdictionary.com/definition/cashflow.html#ixzz2UAy32zTa

recall
1. Remembrance of what has been heard, seen, or otherwise experienced, such as that of an advertisement,commercial, or demonstration. See also recall test. 2. Removal or withdrawal of a contaminated or defective good from sale by its manufacturer or producer, either voluntarily or when forced by a watchdog agency. Sometimes a good (such as a motor vehicle) is recalled after it has been sold, for rectification, exchange, or refund. 3. Revocation of a judgment on a question of fact or a question of law.

portfolio
Pool of investments, collection of samples of an artist or other creative person, or group of complementary or supplementary products marketed together.

osmosis
Passage of a solvent (such as water) from a lower-concentration solution to a higher-concentration solution, through a semi-permeable membrane (that allows the solvent to pass but not what is dissolved in it) separating the two solutions. The flow of solvent stops when both solutions become equal in concentration. In nature, osmosis is an essential process by means of which nutrients are delivered to the cells.

culture
Broadly, social heritage of a group (organized community or society). It is a pattern of responses discovered,developed, or invented during

the group's history of handling problems which arise from interactions among its members, and between them and their environment. These responses are considered the correct way to perceive, feel, think, and act, and are passed on to the new members through immersion and teaching. Culture determines what is acceptable or unacceptable, important or unimportant, right or wrong, workable or unworkable. It encompasses all learned and shared, explicit or tacit, assumptions, beliefs, knowledge, norms, and values, as well as attitudes, behavior, dress, and language. See also organizational culture

Lean Six Sigma A management approach for problem solving and process improvement based on a combination of the different tools of Six Sigma and Lean Manufacturing

resolution
1. Formal authorization or expression of an action, decision, intention, opinion, transaction, etc. 2. Proposition put before a meeting of stockholders (shareholders) or the directors of a firm for discussion,approval or adoption. Resolutions are of four common types: (1) Elective (see elective resolution), (2) Extraordinary (see extraordinary resolution), (3) Ordinary (see ordinary resolution), and (4) Special (seespecial resolution). 3. Appropriate disposition of a complaint or protest through prescribed or standard procedures. 4. Sharpness or clarity of a monitor, printer, or scanner image, expressed in an appropriate unit: pixels per inch (PPI) for monitors, dots per inch (DPI) for printers, and samples per inch (SPI) for scanners. For photographic ...

derivative
1. Financial markets: Contract to buy or sell an asset or exchange cash, based on a specified condition,event, occurrence, or another contract.

2. Mathematics: Measure of the rate of change of a dependent variable with respect to an independent(explanatory) variable.

bid
1. General: Indication of willingness to buy or sell goods or services or to undertake a task, at a specific priceand within a specific timeframe. 2. Contracting: Complete proposal (submitted in competition with other bidders) to execute specified job(s) within prescribed time, and not exceeding a proposed amount (that usually includes labor, equipment, andmaterials). The bid-receiving party may reject the bid, make a counter offer, or turn it into a binding contractby accepting it. See also offer and proposal. 3. Financial markets: Highest price at which prospective buyers are willing to buy commodities, foreign exchange, or securities

repudiation
Act, intention, or threat of disowning or rejection of an agreement already accepted or agreed to. Repudiationamounts to a breach of contract where the refusal to perform is clear or patent, and where it goes to the heart of the contract
.

autonomy
Human resource management: A degree or level of freedom and discretion allowed to an employee over his or her job. As a general rule, jobs with high degree of autonomy engender a sense of responsibility and greater job satisfaction in the employee(s). Not every employee, however, prefers a job with high degree of responsibility
.

asset
1. Something valuable that an entity owns, benefits from, or has use of, in generating income. 2. Accounting: Something that an entity has acquired or purchased, and that has money value (its cost, book value, market value, or residual value). An asset can be (1) something physical, such as cash, machinery, inventory, land and building, (2) an enforceable claim against others, such as accounts receivable, (3) right, such as copyright, patent, trademark, or (4) an assumption, such as goodwill. Assets shown on their owner's balance sheet are usually classified according to the ease with which they can be converted into cash. See also intangible assets and tangible assets.

proxy
Written authorization from an absent member (or a shareholder, called the 'principal') that confers a limited power of attorney on another person, member, or management of the firm (called 'agent' or 'proxy') to vote on behalf of, and in accordance with the directions of, the principal.

marketing
The management process through which goods and services move from concept to the customer. It includes the coordination of four elements called the 4 P's of marketing: (1) identification, selection and development of a product, (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy. For example, new Apple products are developed to include improved applications and systems, are set at different prices depending on how much capability the customer desires, and are sold in places where other Apple products are sold. In order to promote the device...

stock
1. Equity capital raised through sale of shares. 2. The proportional part of a company's equity capital represented by fully paid up shares. 3. British term for (1) A fixed interest government debt security issued usually in denominations, and (2) Inventory.

supply-side economics
Theory that income taxes reduce incentives for work, savings, and investment, and that accelerated economic growth without inflation can be achieved by increasing the supply of goods and services. Supply side economics advocates large scale tax cuts for individuals and corporation, deregulation of businesses, and strong incentives for investment. Based on Say's Law, and supported by classical and monetarist economists, it is however, opposed by Keynesian (demand side) economics which theorizes that aggregate demand constitutes the primary driving and stabilizing forces in an economy. Also called trickle down economics because its proponents believe making the rich richer eventually helps the poor when the benefits of an expanding economy seep down to them. See also Laffer curve and trickle down theory.

demand curve Graph curve that normally slopes downward towards the right of the chart (except for a Giffen good, where it slopes toward the left), showing quantity of a product (good or service) demanded at different price levels. Customarily, the price is plotted on vertical ('Y') axis and quantity on the horizontal ('X') axis, and it is assumed that (in the short run) income levels, price of substitutes, and customer preferences, remain unchanged. Demand curves of the individual products are aggregated to give a market demand curve and, when drawn together with the supply curves, show the equilibrium price at the intersection of the two curves.

collusion Improper secret agreement between two or more entities, to defraud or deprive others of their property or rightful share, or to otherwise indulge in a forbidden, illegal, or illegitimate activity.

pivot table Spreadsheet feature that allows data tables to be rearranged in many ways for different views of the same data. Invented in 1986 by Pito Salas, then working for Lotus Corp, and incorporated in the Lotus Improv in 1989

GDP (gross domestic product)


The value of a country's overall output of goods and services (typically during one fiscal year) at market prices, excluding net income from abroad. Gross Domestic Product (GDP) can be estimated in three ways which, in theory, should yield identical figures. They are (1) Expenditure basis: how much money was spent, (2) Output basis: how many goods and services were sold, and (3) Income basis: how much income (profit) was earned.

stock split Division of already issued (outstanding) shares of a firm into a larger number of shares, to make them more affordable and thus improve their marketability while maintaining the current stockholders' proportional ownership of the firm. The aggregate value of the shares remains the same as before the split, but the price (and dividend) per share declines with the split ratio. For example, if the shares are split by a multiple of two (2:1 split), a share with a par value of $10 becomes two shares, each with a par value of $5.

socialism
An economic system in which goods and services are provided through a central system of cooperative and/or government ownership rather than through competition and a free market system.

capital gain
Profit realized from the sale (disposal) of a capital asset, or from holding it during a period when its market value is increasing. Such gains usually attract capital gains tax.

laches
limitation of actions statute barred Definition Save to Favorites Neglect and unreasonable delay in the assertion of one's claims or rights. Courts expect reasonable diligence from a claimant, in addition to conscience and good faith. Under the legal doctrine of laches, they may refuse to enforce or recognize an individual's rights if he or she waits more than a reasonable length of time to assert them. Unlike the statute of limitations this doctrine,

however, does not define 'reasonable time' but leaves its determination to the courts. Laches is French for, loose, slack, or sluggish.

occurrence rule
occurrence coverage ocean bill of lading (B/L)

Definition

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That the limitations period under the statute of limitations begins when an accident, act, omission, or other alleged incident occurs, and not when it is discovered or reported.
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S corporation
Type of the US corporate structure in which the firm's income is passed through its stockholders (shareholders) in proportion of their investment, and taxed at personal income tax rates. S corporations ('S' stands for 'small') can have only one type of stock and only a limited number of stockholders. Also called subchapter S corporation.

inelastic demand
A situation in which the demand for a product does not increase or decrease correspondingly with a fall or rise in its price. From the supplier's viewpoint, this is a highly desirable situation because price and total revenue are directly related; an increase in price increases total revenue despite a fall in the quantity demanded. An example of a product with inelastic demand is gasoline.

Clayton Antitrust Act


An amendment, passed by the U.S. Congress in 1914, meant to further promote competition in U.S. businesses and discourage the formation of monopolies. This act prohibited price discrimination, price fixing, and exclusive sales contracts. The act also legalized peaceful strikes and boycotts against companies.

Term of the Day

statute of limitations
Legislation that sets a timeframe (limitations period) within which affected parties must take action to enforce their rights or to seek redress after a damage or injury. This period varies according to the nature of the case. Its objective is to encourage diligent prosecution of certain offenses while evidence is available and fresh, and thus ensure finality and predictability in litigation. It is generally not applicable to cases involving fraud and murder. Also called limitation of liability act.

Read more: http://www.businessdictionary.com/definition/laches.html#ixzz2N XG595hT trust Legal entity created by a party (the trustor) through which a second party (the trustee) holds the right to manage the trustor's assets or property for the benefit of a third party (the beneficiary). The four main types of trusts are: (1) Living: trust created by the trustor while he or she is alive. (2) Testamentary: trust established through a will and which comes into effect (is created) when the trustor dies. (3) Revocable: trust that can be modified or terminated by the trustor after its creation. (4) Irrevocable: trust that cannot be modified or terminated by the trustor after its creation.

sole proprietorship
Simplest, oldest, and most common form of business ownership in which only one individual acquires all the benefits and risks of running an enterprise. In a sole-proprietorship there is no legal distinction between the

assets and liabilities of a business and those of its owner. It is by far the most popular business structure for startups because of its ease of formation, least record keeping, minimal regulatory controls, and avoidance of double taxation.

Ponzi scheme
Scam in which gullible public is enticed with the promise of very high returns in a very short time, but is based on paying off the early 'investors' from the cash from (hopefully ever increasing number of) new 'investors.' The whole structure collapses when the cash outflow exceeds the cash inflow. The originators of the scheme, however, usually disappear with large sums a few days before the crash. Named after Charles Ponzi (18821949), an Italian immigrant to the US who, during 1919-20 collected more than fifteen million dollars from some 40,000 eager people by promising to double their investment in 90 days. See also pyramid scheme.

fidelity bond Type of insurance bought by an employer to protect against losses (such as embezzlement or theft by employees) that are not generally covered under normal theft or burglary policies. It may either be a blanket bond (applying to all employees) or for each employee on an individual basis. The insurance company may set certain guidelines to be followed in the insured firm's hiring practices, and the protection continues only so long as the duties of the covered employees remain the same (unless arranged otherwise). Some businesses such as brokerages, cash carriers, and security firms are required by law to obtain fidelity bonds. Also called fidelity guaranty or fidelity insurance. Learn more about this term

love money Capital given by family and friends of an individual, usually an entrepreneur, to start a business. The money is lent based on a

relationship of trust in the individual by the lenders. It usually occurs when an individual would not meet the criteria to be granted financing by a lending institution.

balance sheet ratios


Comparisons of balance sheet items to gain insight into the (1) changes in the financial position, (2) strength/weakness of the financial position, and (3) relationship between different items. Two basic balance sheet ratios are the debt ratio (total debt / total assets) and debt to equity ratio (total debt / total equity).

Definition Six Sigma

Originally developed in 1986 by Motorola, the business management strategy is now used in many different industries in an effort to improve the quality of products or services produced by the business through the removal of defects and errors. The strategy involves creating groups of people within the business or organization who have expert status in various methods, and then each project is carried out according to a set of steps in an effort to reach specific financial milestones. A six sigma process is defined as one in which 99.99966% of products created are expected to be statistically free from defects. See also Lean Six Sigma.
Fourier analysis Definition Data series analysis based on the concept that any graph (representation of a function) can be regarded as composed of an (almost) infinite series of sine and cosine functions. Thus, the response of a system to complex changes (stimuli) can be computed on the basis of its known response to simple changes. Fourier analysis is an important tool in disparate fields such as physical sciences and sales forecasting. Based on the work of the French mathematician Jean Baptiste Joseph Fourier (1768-1830) on heat flow in 1807. Also called harmonic analysis.

trademark
Distinctive design, graphics, logo, symbols, words, or any combination thereof that uniquely identifies a firm and/or its goods or services, guarantees the item's genuineness, and gives it owner the legal rights to prevent the trademark's unauthorized use. A trademark must be (1) distinctive instead of descriptive, (2) affixed to the item sold, and (3) registered with the appropriate authority to obtain legal ownership and

protection rights. Trademark rights are granted usually for 7 to 20 years and, unlike in case of patents, are renewable indefinitely. These rights are protected worldwide by international intellectual property treaties and may be assigned by their owner to other parties. Although a trademark has no limited term of existence, the rights to use it may be lost due to misuse or lack of use. Click here to read more...

Definition Accounting: Method of inventory valuation based on the assumption that the goods purchased most recently (the last in) are sold or used first (the first out). The remaining items are assumed to have been purchased at successively-earlier periods. In this method, value of the inventory at the end of an accounting period is based on the value of items purchased earliest. During periods of high inflation rates, the LIFO method yields lower value of the ending inventory, higher cost of goods sold, and a lower gross profit (hence lower taxable income) than that yielded by the application of the first-in, first-out (FIFO) method. Learn more about this term

market equilibrium
A situation in which the supply of an item is exactly equal to its demand. Since there is neither surplus nor shortage in the market, price tends to remain stable in this situation.

elasticity of demand
The degree to which demand for a good or service varies with its price. Normally, sales increase with drop in prices and decrease with rise in prices. As a general rule, appliances, cars, confectionary and other non-essentials show elasticity of demand whereas most necessities (food, medicine, basic clothing) show inelasticity of demand (do not sell significantly more or less with changes in price). Also called price demand elasticity. See also cross price elasticity of demand.

austerity budget

A budget that is imposed on a country by its government with the purpose of reducing the national deficit by way of cutting down on consumer spending.

operating expenses
An expense incurred in carrying out an organization's day-to-day activities, but not directly associated with production. Operating expenses include such things as payroll, sales commissions, employee benefits and pension contributions, transportation and travel, amortization and depreciation, rent, repairs, and taxes. These expenses are usually subdivided into selling expenses and administrative and general expenses. Also called non-manufacturing expenses.

Machiavellian
Conduct or philosophy based on (or one who adopts) the cynical beliefs of Niccolo Machiavelli (14691527) whose name (in popular perception) is synonymous with deception and duplicity in management and statecraft. Born in Florence (Italy), Machiavelli was its second chancellor and (in 1531) wrote the book 'The Prince' that discusses ways in which the rulers of a nation state can gain and control power. Although The Prince contains some keen and practical insights into human behavior, it also displays a pessimistic view of human nature and condones opportunistic and unethical ways of manipulating people. One of its suggestions reads, "Whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature."

vision statement
An aspirational description of what an organization would like to achieve or accomplish in the mid-term or long-term future. It is intended to serves as a clear guide for choosing current and future courses of action. See also mission statement.

marginal cost
The increase or decrease in the total cost of a production run for making one additional unit of an item. It is computed in situations where the breakeven point has been reached: the fixed costs have already been absorbed by the already produced items and only the direct (variable) costs have to be accounted

for. Marginal costs are variable costs consisting of labor and material costs, plus an estimated portion of fixed costs (such as administration overheads and selling expenses). In companies where average costs are fairly constant, marginal cost is usually equal to average cost. However, in industries that require heavy capital investment (automobile plants, airlines, mines) and have high average costs, it is comparatively very low. The concept of marginal cost is critically important in resource allocation because, for optimum results, management must concentrate its resources where the excess

duty of care
The responsibility or the legal obligation of a person or organization to avoid acts or omissions (which can be reasonably foreseen) to be likely to cause harm to others. Duty of care is owed by an accountant in correctly preparing a company's accounts, by an auditor in confirming an company's financial statements correctly present its financial position; by a director to shareholders in husbanding the enterprise's resources; by a manufacturer to consumers for the safety of product; and by every party to a contract to the other contracting parties. See also standard of care.

contingent liability
Hypothetical liability which depends on a possible (but hardly likely) event or situation to occur before becoming an actual liability. Contingent liabilities are different for every type of business and profession, and management makes provision for them by setting aside appropriate funds as reserves. Examples include acts of employees, credit guaranties, incomplete contracts, pending court cases, third party indemnities, unfilled purchase orders, unsettled disputes, etc. Under corporate-legislation, contingent liabilities must be disclosed in a balance sheet via an explanatory note (footnote).

theory X and theory Y

Two distinct sets of assumptions that managers, in general, have about their employees and which often turn out to be self-fulfilling prophesies. Theory-X assumptions are: (1) most people dislike work and will avoid it to the extent possible, therefore (2) they must be continually coerced, controlled, and threatened with punishment to get the work done, and that (3) they have little or no ambition, prefer to avoid responsibility, and choose security above everything else. Theory-Y assumptions are: (1) physical and mental effort are natural and most people (depending on the work environment) find work to be a source of satisfaction, (2) they generally, on their own motivation, exercise self-control, self-direction, creativity, and ingenuity in pursuit of individual and collective (company) goals, (3) they either seek responsibility or learn to accept it willingly, and that (4) their full potential is not tapped in most organizations. These assumptions serve as powerful behavioral models reflected in the way an organization is structured. Management that believes in theory-X assumptions, creates stick-and-carrot approach based firms with restrictive discipline and pervasive controls. Theory-Y believers create trust based firms with empowered employees. These concepts were introduced by the US collegeadministrator and professor Douglas McGregor (1906-64) in his 1960 book 'The Human Side Of Eenterprise.' See also theory Z.

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indirect method cash flow statement


indirect method indirect overhead cost

Definition
Begins with the net income figure taken from the income statement (profit and loss account) and then makes several adjustments which fall under three main headings: (1) Expenses not involving cash outflows such as depreciation, deferred taxes, increased accounts payable which are added back; (2) Cash outflows not recorded as expenses such as increases in inventory which are subtracted; and (3) Revenues not involving cash inflows such as increased accounts receivable, profit on sale of property which are subtracted. These adjustments convert the net income into net cash-flow from operating activities. To this amount cash inflows from investing activities and financing activities are added and related cash outflows are deducted. The resulting figure gives the cash balance at the end of the period for which the statement was prepared. While this method is more complex, over 95 percent of firms prefer it over the direct method (see direct method cash flow statement) because it shows the relationship between the two other critical financial statements-balance sheet and income statement. Also, it avoids the duplication of effort where a supplementary schedule to reconcile net income with cash-flows from operating activities is needed. However, it does not disclose operating cash receipts and payments. It is called 'indirect' because it proceeds from the net income (instead of with the actual cash receipts and disbursements) which is adjusted to reconcile it with the net cash flow. See also adjusted net income approach.

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sovereign risk
country risk risk

Definition
Probability that the government of a country (or an agency backed by the government) will refuse to comply with the terms of a loan agreement during economically difficult or politically volatile times. Although sovereign nations don't "go broke," they can assert their independence in any manner they choose, and cannot be sued without their assent. Sovereign risk was a significant factor during 1970s after the oil shock when Argentina and Mexico almost defaulted on their loans which had to be rescheduled.

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trustee

passive trust non-discretionary trust

Definition
Person or organization (such as a trust company) named in trust agreement by the trustor or a court (the first party) as a trusted third party to nominally own, and protect and handle, trust-property for the benefit of one or more beneficiaries (the second party) in accordance with the terms of the trust agreement. He or she is usually charged with investing trust property prudently and productively, and (unless specifically prohibited) can lease, mortgage, or sell it if deemed necessary in fulfillment of the trust's objectives. A trustee can be removed and replaced on court orders but, after accepting trusteeship, he or she may not delegate, renounce, or resign his or her responsibility unless an acceptable successor consents as being the replacement. The capacity to be a trustee exists only where there is a capacity to hold or take property, therefore a minor or a person of unsound mind is not acceptable as a trustee. The maker of a trust (trustor) may also be its trustee and/or its beneficiary, but a sole trustee cannot be a sole beneficiary. Although a trustee is legally barred from benefiting from the trusteeship, usually a compensation is allowed in the trust agreement. But he or she cannot commingle personal funds that of the trust and cannot enter into any transaction with the trust. Otherwise the statute of frauds is applied and the fairness or the good-faith nature of the transaction is generally not accepted as a defense. A trustee may also have reporting requirements on the activities and status of the trust and all correspondence regarding the assets is directed to the trustee. He or she is discharged of the duties of the trusteeship only when the intention or the purpose of the trust is fulfilled.

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without prejudice
dismissal of action prejudice

Definition
Law phrase: Without abandonment of a claim, privilege, or right, and without implying an admission of liability. (1) When used in a document or letter, without prejudice means that what follows (a) cannot be used as evidence in a court case, (b) cannot be taken as the signatory's last word on the subject matter, and (c) cannot be used as a precedent. Contents of such documents normally cannot be disclosed to the courts but, when a party proposes to settle a dispute out-of-court, it is the genuineness of the effort that determines whether the proposal can disclosed or not, and not whether the words without prejudice were used.

(2) When a court case is dismissed, or a court order is issued without prejudice, it means that a new case may be brought or a new order issued on the same basis as the dismissed case or the original order. See also with prejudice.

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workers' compensation
Definition
Financial support system established under law to provide income, medical care, and rehabilitation to employees for illness, injury, or death arising out of, and in the course of, their employment whether or not the employee was at fault. These benefits are claimed by the employees (or their dependents) as a matter of right and the employer cannot resort to any legal defense. Amount paid as compensation is based on the salary of the employee (also on the number of his or her dependents in some jurisdictions) and is usually subject to a specified maximum. In most countries, this system is compulsory although agricultural and domestic workers are generally excluded. Also called workmen's compensation

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immediate family
Family and Medical Leave Act (FMLA) household goods

Definition
Someones spouse, parents and grandparents, children and grand children, brothers and sisters, mother in law and father in law, brothers in law and sisters in law, daughters in law and sons in law. Adopted, half, and step members are also included in immediate family. See also first degree relative.

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repo rate
repo report

Definition

The discount rate at which a central bank repurchases government securities from the commercial banks, depending on the level of money supply it decides to maintain in the country's monetary system. To temporarily expand the money supply, the central bank decreases repo rates (so that banks can swap their holdings of government securities for cash). To contract the money supply it increases the repo rates. Alternatively, the central bank decides on a desired level of money supply and lets the market determine the appropriate repo rate. Repo is short for repossession.

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EQUITY
Fairness and impartiality towards all concerned, based on the principles of evenhanded dealing. Equity implies giving as much advantage, consideration, or latitude to one party as it is given to another. Along with economy, effectiveness, and efficiency, Equity is essential for ensuring that extent and costs of funds, goods and services are fairly divided among their recipients. See also equitable. Accounting: (1) Ownership interest or claim of a holder of common stock (ordinary shares) and some types of preferred stock (preference shares) of a company. On a balance sheet, equity represents funds contributed by the owners (stockholders) plus retained earnings or minus the accumulated losses. (2) Net worth of a person or company computed by subtracting total liabilities from the total assets. In case of cooperatives, equity represents members' investment plus retained earnings or minus losses. Law: (1) The English system of justice that developed during 17th to 19th centuries, separate and distinct from the system of common law. Not bound by the precedents, it tempered the harshness and inflexibility of common law, especially in cases involving families and children. Although both systems of law merged by 1875, the rules of equity prevail in case of a conflict with the rules of common law. (2) Any right to an asset or property, held by a creditor, proprietor, or stockholder (shareholder).

pro forma invoice


pro forma income pro forma results

Definition
An abridged or estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of goods. It notes the kind and quantity of goods, their value, and other important information such as weight and transportation charges. Pro forma invoices are commonly used as preliminary invoices with a quotation, or for customs purposes in importation. They differ from a normal invoice in not being a demand or request for payment.

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double-entry bookkeeping
balance of payments (BOP) accounting event

Definition
System of keeping accounting records that recognizes the dual nature (source and disposition) of every financial transaction expressed by the basic accounting equation (Assets = Liabilities + Owners' Equity). In this system, every transaction is entered twice in the account books first, to record a change in the assets' side (called a 'debit') and, second, to mirror that change in the equities' side (called a 'credit'). If all entries are recorded accurately, the account books will 'balance' because the total of debit entries will equal the total of credit entries. Double entry bookkeeping is used universally, except in very small or cash-transactions based firms which use 'single entry bookkeeping.' Invented in the 13th century by Venice merchants, it was formalized by the Italian monk Luca Pacioli (1445-1517) in the 1494 book 'Summa de Arithmetica, Geometrica, Poroportioni et Proportionaltie.'

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accounting concepts
unit of measurement concept realization covenant

Definition
Ground rules of accounting that are (or should be) followed in preparation of all accounts and financial statements. The four fundamental concepts are (1) Accruals concept: revenue and expenses are taken account of when they occur and not when the cash is received or paid out; (2) Consistency concept: once an entity has chosen an accounting method, it should continue to use the same method, except for a sound reason to do otherwise. Any change in the accounting method must be disclosed; (3) Going concern: it is assumed that the business entity for which accounts are being prepared is solvent and viable, and will continue to be in business in the foreseeable future; (4) Prudence concept: revenue and profits are included in the balance sheet only when they are realized (or there is reasonable 'certainty' of realizing them) but liabilities are included when there is a reasonable 'possibility' of incurring them. Also called conservation concept. Other concepts include (5) Accounting equation: total assets of an entity equal total liabilities plus owners' equity; (6) Accounting period: financial records pertaining only to a specific period are to be considered in preparing accounts for that period; (7) Cost basis: asset value recorded in the account books should be the actual cost paid, and not the asset's current market value; (8) Entity: accounting records reflect the financial activities of a specific business or organization, and not of its owners or employees; (9) Full disclosure: financial statements and their notes (footnotes) should contain all pertinent data; (10) Lower of cost or market value: inventory is valued either at cost or the market value (whichever is lower) to reflect the effects of obsolescence; (11) Maintenance of capital: profit can be realized only after capital of the firm has been restored to its original level, or is maintained at a predetermined level; (12) Matching: transactions affecting both revenues and expenses should be recognized in the same accounting period; (13) Materiality: relatively minor events may be ignored, but the major ones should be fully disclosed; (14) Money measurement: accounting process records only those activities that can be expressed in monetary terms (with some exceptions, as in cost-accounting); (15) Monetary measurement: only the activities measurable in terms of money should be recorded; (16) Objectivity: financial statements should be based only on verifiable evidence, comprising an audit trail; (17) Realization: any change in the market value of an asset or liability is not recognized as a profit or loss until the asset is sold or the liability is paid off (discharged); (18) Unit of measurement: financial data should be recorded with a common unit of measure (dollar, pound sterling, yen, etc.). Also called accounting conventions, accounting postulates, or accounting principles.

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