Term
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Definition
| standards of moral behavior, that is, behavior that is accepted by society as right versus wrong |
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Term
| compliance based ethics codes |
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Definition
| ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers |
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Term
| integrity-based ethics codes |
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Definition
| ethical standards that define the organization's guiding values, create an environment that supports ethically sound behavior, and stress a shared accountablitity among employees |
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Definition
| people who report illegal or unethical behavior |
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Term
| corporate social responsibility |
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Definition
| a business's concern for the welfare of society |
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Term
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Definition
| dimension of social responsibility that includes charitable donations |
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Term
| corporate social initiatives |
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Definition
| enhanced forms of corporate philanthropy that are more directly related to the company's competencies |
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Term
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Definition
| dimension of social responsibility that includes everything from hiring minority workers to making safe products |
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Term
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Definition
| dimension of social responsibility that refers to the position a firm takes on social and political issues |
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Term
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Definition
| an unethical activity in which insiders use private company info to further their own fortunes or those of their family and friends |
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Term
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Definition
| a systematic evaluation of an organization's progress toward implementing programs that are socially responsible and responsive |
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Term
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Definition
| the recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties the info they need to make good decisions |
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Term
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Definition
| accounting use to provide info and analyses to managers within the organization to assist them in decision making |
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Term
| certified management accountant (CMA) |
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Definition
a professional accoutnant who has met certain educational and experience requirements, passed a qualifying exam in the field, and been certified by the Institute of Certified Management Accoutants |
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Term
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Definition
| accounting info and analyses prepared for people outside the organization |
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Term
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Definition
| a yearly statement of the financial condition, progress, and expectations of an organization |
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Term
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Definition
| an accoutant who works for a single firm, government agency, or nonprofit organization |
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Term
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Definition
| an accountant who provides accounting services to individuals or businesses on a fee basis |
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Term
| certified public accountant (CPA) |
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Definition
| accountant who passes a series of examinations established by the American Institute of Certified Public Accountants |
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Term
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Definition
| job of reviewing and evaluating teh records used to prepare a company's finanical statements |
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Term
| certified internal auditor (CIA) |
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Definition
| an accountant who has a bachelor's degree and two years of experience in internal auditing and who has passed an exam administered by the Institute of Internal Auditors |
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Term
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Definition
| evaluation and unbiased opinion about the accuracy of a company's financial statements |
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Term
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Definition
| accountant trained in preparing tax returns or developing tax strategies |
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Term
| government and not-for-profit accounting |
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Definition
| accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budget |
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Term
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Definition
| 6 step process that results in the preparation and analysis of the major finanical statements |
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Term
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Definition
| recording of business transactions |
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Term
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Definition
| record book or computer program where accounting data are first entered |
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Term
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Definition
| concept of writing every business transaction in two places |
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Term
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Definition
| a specialized accounting book or computer program in which info from accounting journals is accumulated into specific categories and posted so that managers can find all the info about one account in the same places |
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Term
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Definition
| summary of all the data in the account ledgers to show whether the figures are correct and balanced |
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Term
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Definition
| summary of all the transactions that have occurred over a particular period |
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Term
| fundamental accounting equation |
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Definition
assests = liabilities + owner's equity; this is the basis for the balance sheet |
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Term
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Definition
| finanical statement that reports a firm's financial condition at a specific time |
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Term
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Definition
| economic resources (things of value) owned by a firm |
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Term
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Definition
| how fast an asset can be converted into cash |
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Term
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Definition
| items that can or will be converted into cash within one year |
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Term
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Definition
| assets that are relatively permanent, such as land, buildings, and equipment |
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Term
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Definition
| what the business owes to others (debts) |
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Term
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Definition
| current liabilities involving money owed to others for merchandise or services purchased on credit but not yet paid for |
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Term
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Definition
| short-term or long-term liabilities that a business promises to repay by a certain date |
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Term
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Definition
| long term liabilites that represent money lent to the firm that must be paid back |
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Term
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Definition
| amount of business that belongs to the owners minus any liabilities owed by the business |
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Term
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Definition
| accumulated earnings from a firm's profitable operations that were kept in the business and not paid out to stockholders in dividends |
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Term
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Definition
| financial statement that shows a firm's profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, and the resulting net income |
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Term
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Definition
| revenue left over after all costs and expenses, including taxes, are paid |
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Term
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Definition
| value of what is received for goods sold, services rendered, and other financial sources |
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Term
| cost of goods sold (or cost of goods manufactured) |
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Definition
| a measure of teh csot of merchandise sold or cost of raw materials and supplies used for producing items for resale |
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Term
| gross profit (gross margin) |
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Definition
| how much a firm earned by buying (or making) and selling merchandise |
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Term
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Definition
| costs involved in operating a business, such as rent utilitie, and salaries |
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Term
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Definition
| systematic write-off of the cost of a tangible asset over its estimated useful life |
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Term
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Definition
| financial statement that reports cash receipts and disbursements related to a firm's three major activities: operations, investments, and financing |
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Term
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Definition
| difference between cash coming in and cash going out of a business |
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Term
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Definition
| assessment of a firm's condition and performance through calculations and interpretations of financial ratios developed from the firm's financial statements |
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Term
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Definition
| chance of loss, the degree of probability of loss, and the amount of possible loss |
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Term
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Definition
chance of either profit or loss |
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Term
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Definition
threat of loss with no chance for profit |
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Term
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Definition
| practice of setting aside money to cover routine claims and buying only "catastrophe" policies to cover big losses |
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Term
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Definition
| risk that no insurance company will cover |
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Term
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Definition
| risk that typical insurance companies will cover |
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Term
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Definition
| possibility of the policyholder to suffer a loss |
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Term
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Definition
| written contract between the insured and an insurance company that promises to pay for all or part of a loss |
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Term
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Definition
| fee charged by an insurance company for an insurance policy |
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Term
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Definition
| principle that if a large number of people are exposed to the same risk, a predictable number of losses will occur during a givern period of time |
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Term
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Definition
| rules saying that an insured person or organization cannot collect more than the actual loss from an insurable risk |
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Term
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Definition
| type of insurance company owned by stockholders |
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Term
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Definition
| type of insurance company owned by its policyholders |
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Term
| health maintenance organizations (HMOs) |
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Definition
| health care organizations that require members to choose from a restricted list of doctors |
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Term
| preferred provider organization (PPOs) |
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Definition
| health care organizations similar to HMOs except that they allow members to choose their own physicians (for a fee) |
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Term
| medical savings accounts (MSAs) |
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Definition
| tax-deferred accounts that allow people to save money for medical expenses |
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Term
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Definition
| function in a business that requires funds for the firm and manages those funds within the firm |
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Term
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Definition
| job of managing a firm's resources so it can meet its goals and objectives |
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Term
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Definition
| managers who make recommendations to top executives regarding strategies for improving the financial strength of a firm |
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Term
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Definition
| forecast that predits revenues, costs, and expenses for a period of one year or less |
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Term
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Definition
forecast that predicts the cash inflows and outflows in future periods, usually months or quarters |
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Term
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Definition
| forecast that predicts revenues, costs, and expenses for a period longer than 1 year and sometimes as far as 5 or 10 years into the future |
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Term
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Definition
| financial plan that sets forth management's expectations, and, on the basis of those expectations, allocates the use of specific resources throughout the firm |
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Term
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Definition
| a budget that highlights a firm's spending plans for major asset purchases that often require large sums of money |
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Term
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Definition
| budget that estimates a firm's projected cash inflows and outflows that the firm can use to plan for any cash shortages or surpluses during a given period |
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Term
| operating budget (master budget) |
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Definition
| budget that ties together all of a firm's other budgets; it is the projection of dollar allocations to various costs and expenses needed to run or operate the business, given projected revenues |
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Term
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Definition
| process in which a firm periodically compares its actual revenues, costs, and expenses with its budget |
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Term
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Definition
| major investments in eitehr tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks, and copyrights |
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Term
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Definition
| funds raised through various forms of borrowing that must be repaid |
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Term
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Definition
| funds raised from operations within the firm or through the sale of ownership in the firm |
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Term
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Definition
| borrowed capital that will be repaid within one year |
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Term
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Definition
| borrowed capital that will be repaid over a specific period longer than one year |
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Term
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Definition
| practice of buying goods and services now and paying for them later |
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Term
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Definition
| written contract with a promise to pay a supplier a specific sum of money at a definite time |
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Term
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Definition
| loan backed by something valuable, such as property |
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Term
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Definition
| loan that's not backed by any specific assets |
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Term
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Definition
| given amount of unsecured short-term funds a bank will lend to a business, provided the funds are readily available |
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Term
| revolving credit agreement |
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Definition
| a line of credit that is guranteed by the bank |
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Term
| commercial finance companies |
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Definition
| organizations that make short-term loans to borrowers who offer tangible assets as collateral |
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Term
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Definition
| process of selling accounts receivable for cash |
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Term
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Definition
| unsecured promissory notes of $100,000 and up that mature (come due) in 270 days or less |
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Term
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Definition
promissory note that requiers tue borrower to repay the loan in specified installmetns |
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Term
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Definition
| principle taht the greater the risk a lender takes in making a loan, the higher the interest rate required |
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Term
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Definition
| terms of agreement in a bond issue |
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Term
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Definition
| bond issued with some form of collateral |
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Term
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Definition
| bond backed only by the reputation of the issuer; also called a debenture bond |
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Term
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Definition
| money that is invested in new or emerging companies that are perceived as having great profit potential |
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Term
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Definition
| raising needed funds through borrow to increase a firm's rate of return |
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Term
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Definition
| rate of return a company must earn in order to meet the demands of its lenders and expectations of its equity holders |
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Term
| initial public offering (IPO) |
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Definition
| first public offering of a corporation's stock |
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Term
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Definition
| specialists who assist in the issue and sale of new securities |
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Term
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Definition
| large organizations--such as pension funds, insurance companies, and banks--that invest their own funds or the funds of others |
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Term
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Definition
| corporate certificate indicatign that a person has lent money to a firm |
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Term
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Definition
| payment teh issuer of the bond makes to the bondholders for use of the borrowed money |
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Term
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Definition
| exact date the issuer of a bond must pay the principal to the bondholder |
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Term
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Definition
| bonds that are unsecured (i.e., not backed by any collateral such as equipment) |
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Term
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Definition
| reserve account in which teh issuer of a bond periodically retires some part of the bond principal prior to maturity so that enough capital will be accumulated by the maturity date to pay off the bond |
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Term
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Definition
| shares of ownership in a company |
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Term
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Definition
| evidence of stock ownership that specifies the name of the company, the number of shares it represents, and teh type of stock being issued |
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Term
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Definition
| part of a firm's profits that may be distributed to stockholders as either cash payments or additional shares of stock |
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Term
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Definition
| stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets |
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Term
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Definition
| organization whose members can buy and sell (exchange) securities for companies and individual investors |
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Term
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Definition
| most basic form of ownerhsip in a firm; it confers voting rights and the right to share in the firm's profits through dividends, if approved by the firm's board of directors |
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Term
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Definition
| organization whose members can buy and sell (exchange) securities for companies and individual investors |
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Term
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Definition
| exchange that provides a means to trade stocks not listed on the national exchanges |
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Term
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Definition
| nationawide electronic system that links dealers across the nation so that they can buy and sell securities electronically |
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Term
| Securities and Exchange Commission (SEC) |
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Definition
| federal agency that has responsibility for regulating the various exchanges |
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Term
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Definition
| condensed version of economic and financial info that a company must file with the SEC before issuing stock; the prospectus must be sent to prospective investors |
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Term
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Definition
| register representative who works as a market intermediary to buy and sell securities for clients |
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Term
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Definition
| positive difference between the purchase price of a stock and its sale price |
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Term
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Definition
| action by a company that gives stockholders two or more shares of stock for each one they own |
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Term
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Definition
| organization that buys stocks and bonds and then sells shares in those securities to the public |
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Term
| exchange-traded funds (ETFs) |
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Definition
| collections of stocks that are traded on exchanges but are traded more like individual stocks than like mutual funds |
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Term
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Definition
| buying several different investments alernatives to spread the risk of investing |
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Term
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Definition
| high-risk, high-interest bonds |
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Term
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Definition
| purchasing stocks by borrowing some of the purchase cost from the brokerage firm |
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Term
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Definition
| securities exchange that specializes in the buying and selling of precious metals and minerials (i.e. silver, foreign currencies, gasoline) and agricultural goods (e.g. wheat, cattle, sugar) |
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Term
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Definition
| commodities markets that invovle the purchase and sale of goods for delivery sometime in the future |
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Term
| Dow Jones industrial Average (the Dow) |
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Definition
| average cost of 30 selected industrial stocks, used to give an indication of the direction (up or down) of the stock market over time |
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Term
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Definition
| giving instructions to computers to automatically sell if the price of a stock dips to a certain point to avoid potential losses |
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Term
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Definition
| branch of gov't chosen to oversee the legal system through the court system |
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Term
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Definition
| rules, statutes, codes, regualtions that are established to provide a legal framework within which business may be conducted and that are enforceable by court action |
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Term
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Definition
| state and federal constitutions, legislative enactments, treaties of the fed gov't and ordinances--in short, WRITTEN LAW |
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Term
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Definition
| bod of law that comes from decisions handed down by judges; also referred to as unwritten law |
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Term
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Definition
| decisions judges have made in earlier cases that guide the handling of new cases |
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Term
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Definition
| federal or state institutions and other gov't organizations created by Congress or state legislatures with delegated power to pass rules and regulations within their mandated area or authority |
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Term
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Definition
| wrongful act that causes injury to another person's body, property, or reputation |
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Term
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Definition
| in tort law, behavior that causes unintentional harm or injury |
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Term
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Definition
| part of tort law that holds businesses liable for harm that results from the production, design, sale, or use of products tehy market |
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Term
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Definition
| legal responsibility for harm or injury caused by a product regardless of fault |
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Term
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Definition
| document that gives inventors exclusive rights to their inventions for 20 yrs |
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Term
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Definition
| document that protects a creator's rights to materials such as books, articles, photos, and cartoons |
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Term
| Uniform Commercial Code (UCC) |
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Definition
| comprehensive commercial law, adopted by every state in the U.S., that covers sales laws and other commercial laws |
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Term
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Definition
| specific representations by the seller that buyers rely on regarding the goods they purchase |
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Term
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Definition
| specific representations by the seller that buyers rely on regarding the goods they purchase |
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Term
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Definition
| guarantees legally imposed on the seller |
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Term
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Definition
| forms of commercial paper (such as checks) that are transferable among businesses and individuals and represent a promises to pay a specified amount |
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Term
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Definition
| legally enforceable agreement between two or more parties |
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Term
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Definition
| something of value; consideration is one of the requirements of a legal contract |
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Term
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Definition
| when one party fails to follow the terms of a contract |
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Term
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Definition
| monetary settlement awarded to a person who is injured by a breach of contract |
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Term
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Definition
| social movement that seeks to increase and strengthen the rights and powers of buyers in relation to sellers |
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Term
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Definition
| how the gov't (federal, state, and local) raises money |
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Term
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Definition
| legal processes by which a person, business, or gov't entity unable to meet financial obligations is relieved of those obligatons by a court that divides any assets among creditors, allowing creditors to get at least part of their money and freeing the debtor to begin anew |
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Term
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Definition
| legal procedures initiated by a debtor |
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Term
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Definition
bankruptcy procedures filed by a debtor's creditors |
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Term
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Definition
| gov't withdrawal of certain laws and regulations that seem to hinder competition |
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