Test 4 Study Guide

Sole proprietorship

A business owned and operated by a single individual

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

Small claims court

A court that handles civil cases involving small amounts of money

General Partnership

A partnership in which all partners have unlimited liability for the debts and obligations of the partnership

Limited Partnership

A partnership in which there are one or more general partners and one or more limited partners

Infringer

A person or entity that violates someone else's intellectual property rights

Mediation

A process in which a neutral third party helps the disputing parties reach a mutually acceptable resolution

Safety Stock

An amount of inventory carried to ensure that you will not run out of inventory because of fluctuating levels of sale

Deductible

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

Executive Order No. 11246

An executive order that prohibits federal contractors and subcontractors from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin

Inventory valuation

Determination of the number of assets held by the firm for sale or production

Vicarious Liability

Indirect liability or responsibility for the actions of another

Errors and omissions insurance

Insurance that protects professionals from liability for mistakes or negligence in their work

Unemployment Insurance

Insurance that provides temporary financial assistance to individuals who are unemployed through no fault of their own

Regulation in the workplace

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

Employee Theft

Misappropriation of business property by employees of that business

Burglary

The act of illegally entering a building with the intent to commit a crime

Payback Period

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

Replacement value

The cost incurred to replace one asset with an identical asset

Adverse possession

The legal concept that allows a person to gain ownership of another person's property through continuous possession

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

Job Description

A document that defines all the knowledge, skills, and abilities needed to fill a position, including personality, experience, and education

Exempt

A federal government descriptor of employees who are exempt from the Fair Labor Standards Act and are generally paid salaries

Age Discrimination in Employment Act

A federal law that makes it illegal to discriminate against people who are older than 40 years of age

Americans with Disabilities Act

A federal law that requires businesses to make provisions for access for people with disabilities

Worker Adjustment and Retraining Notification Act

A federal law that requires employers to provide advance notice of plant closings and mass layoffs

Contingency Fee

A fee paid by a client to an attorney for legal services that are dependent on the outcome of a case

Plant

A general term for the facilities of a business

Nepotism

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

Internal Control

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

Perpetual Inventory

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

Point-of-sale system

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

Virtual Employees

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

Crime Insurance

Insurance that covers losses resulting from criminal acts such as theft, fraud, or embezzlement

Accounts receivable

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

Inventory

Products that are held for sale to customers

Just-in-time inventory

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

Periodic Inventory

The process of physically counting business assets on a set schedule

Factoring

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

Litigation

The process of using small-claims court or the regular court to settle legal disputes

Probationary Period

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

On-the-job Training

Training delivered to employees while they perform their regular jobs

Insurance

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