Chp. 8 Flashcards
Unlimited Liability
A requirement that an owner is personally and fully responsible for all losses and debts of a business; applies to proprietorships and general partnerships.
Partnership
An unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm.
Corporation
A form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and sue and be sued.
Stock
A certificate of ownership in a corporation; can be either common or preferred stock.
Dividend
A check paid to stockholders, usually quarterly, representing a portion of corporate profits.
Bond
A formal contract to repay borrowed money and interest on the borrowed money at regular future intervals.
Interest
Payment made for the use of borrowed money; usually paid at periodic intervals for long-term bonds or loans.
Limited Liability
A requirement in which a corporation, but not its owners, is responsible for all losses and debts of the business.
Franchise
A business investment that involves renting or leasing another successful business model.
Net Income
A measure of business profits determined by subtracting all expenses, including taxes, from total revenue.
Cash Flow
Total amount of new funds the business generates from operations; broadest measure of profits for a firm because it includes both net income and non-cash charges.
Horizontal Merger
A combination of firms producing the same kind of product.
Vertical Merger
A combination of firms involved in different steps of manufacturing, marketing, or sales.
Conglomerate
A firm with four or more businesses making unrelated products, with no single business responsible for the majority of its sales.
Venture Capitalist
A provider of investment funds to a start-up business in exchange for partial ownership of the business.
Crowdfunding
Using social networking to appeal to potential investors.
Nonprofit Organization
An economic institution that operates like a business but does not seek financial gain; schools, churches, and community-service organizations are examples.
Credit Union
A nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services.
Collective Bargaining
The process of negotiation between union and management representatives over pay, benefits, and job-related matters.
Chamber of Commerce
A nonprofit organization of local businesses whose purpose is to promote their interests.
