MGT 302 Test 3

Fair Credit reporting act-

U.S. federal legislation specifying consumers rights vis a vis credit report agencies.

design patent-

a 14 year patent for a new, original, and ornamental design for an article of manufacture

plant patent-

a 20 year patent that covers new strains of living plant organisms, algae, and macro fungi

interest-

a charge for the use of money, usually figured as a percentage of the principal

capital lease-

a lease in which at the end of the lease period the asset becomes the property of the lessee, possibly with an additional payment

corporation-

a legal "artificial" entity that is formed by filing specific documents with a state government

liquidation-

a popular term for a chapter 7 bankruptcy in which a bankrupt firms assets are sold by the bankruptcy trustee and the proceeds used to pay the firms debts

Age Discrimination in Employment Act-

an act of congress that makes it illegal to discriminate against people who are older that 40 years of age

Rehabilitation Act of 1973-

an act of congress that provides training for workers who are injured on the job

Americans with Disabilities Act of 1990-

an act of congress that requires that businesses make provisions for access by disabled people

deductible-

an amount of loss that will not be paid by the insurance company

capital assets-

assets that are expected to provide economic benefits for periods of time greater than one year

fidelity bonds-

bonds, also called dishonesty bonds, that repay employers for losses caused by dishonest or negligent employees

walkaways-

business terminations in which the entrepreneur ends the business with its obligations met

open-book policy-

concept that key employees should be able to see and understand a firms financials, that they should have a part in moving the numbers in the right direction, and that they should have a direct stake in the strategy and success of the firm

trade secret-

confidential information within a company that gives that company a competitive advantage

coverages-

contractual provisions of insurance policies that specify what risks the insurance company is assuming

costs of owning-

cost incurred in financing, insuring, taxing, or tracking an asset

cost of disposition-

cost incurred in the activities necessary to get rid of an asset

job description-

defines and discusses all the essential knowledge, skills, and abilities that are needed to fill a position

on-the-job training-

delivered to employees while they perform their regular jobs; techniques include orientations, job instruction training, apprenticeships, internships and assistantships, job rotation, and coaching

trademark-

distinctive word, slogan, or image that identifies a product and its origin

articles of organization-

document setting forth information about a limited liability company that is filed with the state to establish an LLC

key employees-

employees whose experience and skills are critical to the success of a business

copyright-

exclusive right given to the creator of a literary or artistic work to make use of that work

outflow-

funds being paid by others to others by the firm

grants-

gifts of money made to a business for a specific purpose

pledging receivables-

giving a third party legal rights to debts owed your business in order to provide assurance that borrowed money will be repaid

3 types of profits

gross, operating, net

regulation of the work place-

laws and governmental rules that limit the freedom of business owners to manage their businesses as they please

tax codes-

laws and regulations that specify the requirements of taxation

internet recruiting-

method of recruiting that allows you to search a resume database or post a job description to the web

employee theft-

misappropriation of business property by employees of that business

debt capital-

money borrowed for the purposes if investment in a business

waiver-

part if a contract in which a party intentionally gives up legal rights or claims

noncompete clause-

part of a contract in which a person agrees not to open a certain type of business or seek employment doing certain things in a particular area for a period of time

small business investment companies-

private businesses that are authorized to make SBA insured loans to start-ups and small businesses

inventory-

products that are held for sale to customers

harvest-

recover value through a sale of a firm or its assets

supplemental profits-

returns above costs intended as a secondary income for entrepreneurs

factoring-

selling the rights to collect accounts receivable to an entity outside your business

infringer-

someone who uses intellectual property without the permission of the owner

profit, profitability-

the amount that revenues exceed expenses

cost of operating-

the direct cost incurred in using an asset for the purpose for which it was intended

piercing the veil-

the dissolution of a corporate firm, making it back into a sole proprietorship or general partnership, if the court finds that the owner carelessly mixed up personal and business assets or finances

weighted average cost of capital-

the expected average future cost of funds

just-in-time inventory-

the practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer

acquisition cost-

the total cost of acquiring an asset, including such costs as purchase price, transportation, installation, testing, and calibrating in order to ready it for its first productive use

partnership-

two or more people cooperating to conduct a business enterprise

gift-

valuable assets or services donated to the business without any obligation to repay or give up any ownership interest

straight line for a useful like of 10 years-

depreciation is computed using a straight line method over 10 years, so an asset would lose 10% of its value each year

inventory valuation-

determination of the amount of assets held by the firm for sale or production

tax credits-

direct reductions in the amount of taxes that must be paid, dependent upon meeting some legal criteria

buyout insurance-

insurance that provides money to owners of a business to buy the shares of any deceased owner from that owners heirs

supply chain-

like the value chain, the line of distribution of a product form its start as materials outside the target firm to its handling in the target form to its handling by sellers into the hands of customers

equipment-

machinery, tools, or materials used in the performance of the work of the business

equity capital-

money contributed to the businesses in return for part ownership of the business

accounts receivable-

money owed to your business by customers who purchased your product on credit

dividends-

payments of profits to the owners of corporations

intellectual property-

property coming rom some sort of original thought, for example, patents, trade secrets, trademarks, and copyrights

success profits-

returns at levels higher than the entrepreneur could make working for others

book value-

the difference between the original acquisition cost and the amount of accumulated depreciation

inputs-

the materials, labor, and energy put into the production of a good or service

trade name or assumed name or a doing business as-

the name under which a business is operated

disposal value-

the net amount realized after subtracting the costs of getting rid of an asset from its selling price

feedback-

the process of communicating within or to the organization about how the outputs worked or were received

capital budgeting-

the process of deciding among various investment opportunities to create a specific spending plan

periodic inventory-

the process of physically counting business assets on a set schedule

operations-

the process of transforming materials, labor, and energy into goods or services

return on equity-

the ratio of profits to owner investment in a business

business life cycle-

the sequence or pattern of developmental stages any business goes through during its life span

outputs-

the service or product that is produced for sale

liability of newness-

the set of risks faced by firms early in their life cycles that comes from a lack of knowledge by the owners about the business they are in and by customers about the new business

whole of life costs-

the sum of all costs of capital assets, including acquisition, ownership, operation, and disposal

replacement cost-

the total cost of replacing an asset with an essentially identical asset

off-the-job training

Employee training at a site away from the actual work environment. It often utilizes lectures, case studies, role playing, simulation, etc

hourly fees-

a basis for legal charges in which the rate is based on a price per hour. Often lawyers will charge for fractions of an hour

legal entity-

a being, human or nonhuman, such as a corporation, that is recognized as having rights and duties, such as the right to own property

arm's length transaction-

a business deal where parties have a prior relation of affiliation, but where the business is conducted as if they were unrelated. This approach is done to help guard against potential conflicts of interest

sole proprietorship-

a business owned by a single individual who is responsible for all debts and claims against the business

litigation-

a formal dispute resolution method that operates using the court system, typically with a lawyer representing each party

employee stock ownership plan-

a formalized legal method to transfer some or all of the ownership of a business to its employees

tax abatement-

a legal reduction in taxes by a government

financial leverage-

a measure of the amount of debt relative to total investment

financial management-

a set of theories and techniques used to optimize the receipt and use of capital assets

surety bonds-

an agreement with an insurance or bonding company that will pay a specified amount in the event that the entity bonded fails to comply with specified contractual requirements

safety stock-

an amount of inventory carried to ensure that you will not run out of inventory because of fluctuating levels of sales

employee referral-

an underused, low-cost method for finding workers that rewards your employees for recommending potential candidates that would be a great employee fit

credit reporting agency-

a business that collects, collates, and reports information concerning an entity's use of debt

return on investment-

a capital budgeting equation used to measure the relationship between initial investment and the profits that are expected to be received from making the investment

check the box taxation-

a choice LLCs can make on their tax return to be taxed as a corporation or a partnership

EEOC-

a commission established to enforce the provisions of the equal employment opportunity act

insurance-

a contract between two or more parties in which one party agrees, for a fee, to assume the risk of another

subcontract-

a contract by which a new party agrees to perform a duty that one of the original parties to a contract was already legally obligated to perform

co-insurance-

a contract stipulation that requires a policyholder to carry insurance in an amount equal to a stated minimum percentage of the market value of the property insured

physical inventory-

a count of all the inventory being held for sale at a specific point in time

arbitration-

a dispute resolution process held instead of court cases in which both sides present their case to a legal professional

Sarbanes-Oxley Act-

a federal law describing the steps publicly traded businesses must take to protect and provide their key financial information

retainer-

a fee paid by a client to an attorney to engage the attorney's services

traditional small business-

a firm intended to provide a living income to the owner, and operating in a manner and on a schedule consistent with other firms in the industry and market

high-performing small business-

a firm intended to provide the owner with a high income through sales or profits superior to those of the traditional small business

high-growth venture-

a firm started with the intent of eventually going public, following the pattern of growth and operations of a big business

workout-

a form of business termination in which the firms legal or financial obligations are not fully met at closing

plant-

a general term for the facilities of a business

OSHA-

a government agency created to enforce safety in the workplace protected classes-states of being that are expressly prohibited from suffering discrimination: race, color, religion, sex, national origin, gender, age, or disability

economic development agency-

a government organization that works to increase economic activity in the form of job opportunities within a specific geographic region

limited partnership-

a legal form of business organization that is created by filing required documentation with a state government; with a limited partnership, one or more partners may have no liability for the debts and actions of the partnership

debt-

a legal obligation to pay money in the future

articles of partnership-

agreement between the partners of a firm on matters pertaining to the formation and operation of the partnership

joint venture-

an agreement between two or more entities to pool resources in order to complete a project

transfer-

an endgame strategy in which ownership is moved from one person or group to another

termination-

an endgame strategy in which the owner closes down a business

liquidity enhancement-

an estate planning method in which cash is generated (usually through a life insurance policy) to cover the estate taxes

estate freeze-

an estate planning strategy which focuses on transferring assets to heirs when the asset costs are low

tax management-

an estate planning strategy which uses structured transfers of the business to make tax payments as small as possible

bankruptcy-

an extreme form of business termination which uses a legal method for closing a business and paying off creditors when debts are substantially greater than assets

foundation-

an institution to which private wealth is contributed and from which private wealth is distributed for public purposes

community development organization-

an organization authorized by the SBA to make insured loans to small businesses that are expected to increase economic activity within a specified geographic region

accelerator-

an organization that supports start-up technology businesses by providing inexpensive office space, a variety of support services, and resources; most accelerators are associated with universities

B2B-

business to business transactions

B2C-

business to consumer transactions

pass through (taxation)-

earning of the business are distributed to the business owners and those owners (rather than the business) pay individual tax on the earnings

double taxation-

earning of the business are taxed twice with the business as well as its owners being subject to tax

single taxation-

earnings of the business are taxed once with the owners paying the taxes

contingency fee-

fee paid by a client to an attorney for legal services that is dependent upon the outcome of the case

assumed name filing or a fictitious name filing-

filing made with a state(s) in which the business operates disclosing the trade name or assumed name of the business along with the owners of the business

point-of-sale system-

hardware and software combinations that integrate inventory management directly into accounting software

existence stage of emergence-

having the business in operation, but not yet stable in terms of markets, operations, or finances

virtual employees-

independent contractors who provide specialized business services or support from a distance, through the internet, telephone, fax, or other method of communication

vicarious (indirect) liability-

indirect liability or responsibility for the actions of another

outside equity-

money from selling part of your business to people who are not and will not be involved in the management of the business

serial entrepreneurs-

people who open multiple businesses throughout their career

defendant-

person or other entity being sued

plaintiff-

person or other entity filing a lawsuit

independent contractors-

persons working to achieve a certain goal without being subjected to substantial controls by another

slack resources-

profits that are available to be used to satisfy the preferences of the owner in how the business is run

intangible property-

property that has no value of its own but that represents value, such as stock certificate

collateral-

something of value given or pledged as security for payment of a loan;collateral may consist of financial instruments, such as stocks, bonds, and negotiable paper, or of physical goods, such as trucks, machinery, land, or buildings

accredited investors-

the SECs term for individuals with a net worth great that 1 million or a personal annual income of at least 200,000 in each of the two most recent years, who are therefore qualified to make private equity investments in businesses

insurable value-

the amount of an asset for which a company will write an insurance policy

business risk-

the level of profitability that the future economic state of the business will be worse that expected

employee fit-

the match between the needs, expectations, and culture of the small business with the expectations and the skills of the individual employee

gain on investment-

the percentage amount that the payout of an investment differs from original cost: calculated as (payout-investment+dividends)/investment

cost of capital-

the percentage cost of obtaining future funds

reorganization-

the popular term for a chapter 13 bankruptcy in which a bankrupt firm continues to operate while paying off debts identified by the bankruptcy trustee

fair market value-

the price at which goods and services are bought and sold between willing sellers and buyers in an arm's length transaction

productivity-

the ratio measure of how well a firm does in using its inputs to create outputs. Literally, productivity is outputs divided by inputs

optimum capital structure-

the ratio of debt to equity that provides the maximum level of profits

diversify-

to invest in multiple investments of differing risk profiles for the purpose of reducing overall investment risk

probationary period-

trail period in which an employee has temporary status before a formal offer to work full time is presented

initial public offering-

transfer method describing the first-time public sale of a stock listed on a public stock exchange

financial risk-

uncertainty of returns; the probability of losing money

property-

a general term for real estate, but it can also be applied as a legal term for anything owned or possessed

patent-

a grant by the US government to an inventor for an idea that is new, useful, and nonobvious, giving the inventor the exclusive right to make, use, or sell his or her idea

LLC-

a legal form of business organization that is created by filling required documentation with a state government. LLCs have a choice, under federal tax law, of being taxed as either corporations or partnerships

lock box-

a locked receptacle for money, the keys to which are not available to those who physically handle the receptacle; a common example of a lock box is the coin receptacle for parking meters which cannot be opened by the workers who are responsible for collecting the deposited coins

operating lease-

a long-term rental in which ownership of the asset never passes to the person paying for the lease

meritocracy-

a management philosophy of selecting a promoting people based solely on their being the most capable person for the job

nepotism-

a management philosophy of selecting and promoting people based on family ties

flat fees-

a method of billing for lawyers in which a fixed amount is paid for a certain task

quality-

a products or services fitness for use, measured as durability, reliability, serviceability, style, ease of use, and dependability

Civil Rights Act of 1991-

a series of acts by congress that prohibit discrimination on the basis of race, color, sex, religion, or national origin

internal control-

a set of rules and procedures that work to limit the opportunity for employee theft or malfeasance

economic order quantity-

a statistical technique that determines the quantity of inventory that a business must hold to minimize total inventory cost

perpetual inventory-

a system of recording the receipt and sale of each item as it occurs

pull-through system-

a term for just in time inventory systems in which a product is orders an placed into production only after a sale has been completed

consolidation-

a transfer method in which a small business is bought by a larger firm for the purpose of quickly growing the larger firm

best practices-

activities identified by authoritative bodies as examples of optimal ways to get things done in a particular industry, profession or trade

bar coding-

obtaining a universal product code number and scan ready visual tag and printing it on the product or its packaging. Bar codes can then be scanned and recognized by others

psychological contract-

refers to employees beliefs about the promises between the employee and the firm. These beliefs are based on the perception that promises have been made (competitive wages, promotional opportunities, job training) in exchange for certain employee obligations such as giving their energy, time, and technical skills

substitution profits-

returns intended to equal and replace the salary or wages the entrepreneur could draw working for someone else

living wage-

the amount needed for a person (or family of a particular size) to meet the basic necessities of life from a single job

optimum stocking level-

the amount of inventory that results in the minimum cost, when considering the cost of lost sales resulting from running out of stock, the number of units sold per day, and the number of days required to receive inventory

payback period-

the amount of time it takes a business to earn back the funds it paid out to obtain a capital asset

efficiency-

the comparison of productivity ratios to see the extent that an organization has generated more outputs than fewer inputs

replacement value-

the cost incurred to replace one asset with an identical asset

risk-

the level of profitability that investment will not produce expected gains

microinventory-

the purchase of inventory only after a sale is made, very typical with internet firms

lifestyle or part-time firm-

a small business primarily intended to provide partial or subsistence financial support for the existing lifestyle of the owner, most often through operations that fit the owners schedule and way of working

separation of duties-

a type of internal control that separates the physical control of an asset from the person accounting for that asset

hold harmless-

a type of waiver in which a party agrees not to hold another party responsible for certain events