Economics chapter 3

limited life

A firm that legally ceases to exist when the owner dies, quits, or sells the business

professional association

A group of people in a specialized occupation that works to improve the working conditions, skill levels, and public perceptions of the profession.

better business bureau

A non-profit organization sponsored by local businesses to provide general information on companies, is one of these. It maintains records on consumer inquiries and complaints and sometimes offers various consumer education programs.

cooperative

A nonprofit organization owned and operated by its members for the purpose of saving money on the purchase of goods and services.

interest

A sum paid or charged for the use of money or for borrowing money, usually paid at periodic intervals for long term bonds or loans

net income

Also called profit. Calculated as the Revenue - Expenses, measure of profits determined by subtracting all expenses, including taxes, from revenues

nonprofit organizations

Business organizations that provide goods and services without seeking to earn a profit. examples churches, schools, community service organizations, etc.

vertical merger

The joining of two companies involved in different stages of related businesses

unlimited liability

The owner is personally and fully responsible for all losses and debts of the business

dividend

The portion of corporate profits paid out to stockholders

double taxation

The taxing of stockholders' dividends as corporate profit and again as personal income

corporation

a business owned by stockholders who share in its profits but are not personally responsible for its debts, can buy and sell property enter into legal contests and sue and be sued

stock

a certificate documenting the shareholder's ownership in the corporation

bond

a certificate that promises to repay the money loaned, plus interest, on a certain date

partnership

a contract between two or more persons who agree to pool talent and money and share profits or losses

multinational

a corporation that has manufacturing or service operations in a number of different countries

charter

a document incorporating an institution and specifying its rights

income statement

a financial statement that gives operating results for a specific period

conglomerate

a group of diverse companies under common ownership and run as a single organization, four or more businesses

bankruptcy

a legal process to get out of debt when you can no longer make all your required payments

credit union

a nonprofit financial institution that is owned by its members and organized for their benefit

labor union

an organization of workers that tries to improve working conditions, wages, and benefits for its members

public utility

an organization that supplies a service or product vital to all people. This includes companies that provide local telephone service, water, and electricity. A public utility is selected to serve a community

proprietorship

an unincorporated business owned by a single person who is responsible for its liabilities and entitled to its profits

sole proprietorship

business owned by ONE person

depreciation

decrease of capital goods during production

limited partnership

form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business

inventory

making an itemized list of merchandise or supplies on hand

collective bargaining

negotiation between an employer and trade union

chamber of commerce

nonprofit organization of local businesses whose purpose is to promote their interests

stock holder

person who owns a share or shares of a stock in a corporation

co-op

shortened name for cooperative

shareholder

someone who holds shares of stock in a corporation

principal

the amount of money borrowed when getting a loan or issuing a bond

merger

the combination of two or more commercial companies

horizontal merger

the combination of two or more firms competing in the same market with the same good or service

cash flow

total amount of new funds a business generates from operations