Business Fundamentals
stock of goods held in reserve; includes finished goods waiting to be sold and raw materials to be used in production
inventory
feature of taxation that allows stockholders' dividends to be taxed both as corporate profit and as personal income
double taxation
unit or being
entity
combination of two or more business enterprises to form a single firm
merger
formal contract to repay borrowed money and interest on the borrowed money at regular future intervals
Bond
report showing a business’s sales, expenses, and profits for a certain period, usually three months or a year
income statement
certificate of ownership in a corporation; can be either common or preferred stock
stock
unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States
sole proprietorship
places where entrepreneurs can receive the training and other assistance to build a successful start-up business
incubators
requirement that an owner is personally and fully responsible for all losses and debts of a business; applies to proprietorships, and general partnerships
unlimited liability
measure of business profits determined by subtracting all expenses, including taxes, from revenues
net income
people who own a share or shares of stock in a corporation; same as shareholders
stockholders
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
partnership
using social networking to appeal to potential investors
crowdfunding
situation in which a firm legally ceases to exist when an owner dies or quits, or a new owner is added; applies to sole proprietorships and partnerships
limited life
gradual wear on capital goods
depreciation
written government approval to establish a corporation; includes company name, address, purpose of business, number of shares of stock, and other features of the business
charter
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 to sue and be sued
corporation
informal and usually affluent investors who provide funds to less-promising start-ups
angel investors
amount borrowed when getting a loan or issuing a bond
principal
total amount of new funds the business generates from operations; broadest measure of profits for a firm because it includes both net income and noncash charges
cash flow
check paid to stockholders, usually quarterly, representing a portion of corporate profits
dividend
business investment that involves renting or leasing another successful business model
franchise
provider of investment funds to a start-up business in exchange for partial ownership of the business
venture capitalist
payment made for the use of borrowed money; usually paid at periodic intervals for long-term bonds or loans
interest