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30 Cards in this Set
- Front
- Back
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Sole Propriertorship |
a business owned and run by one person |
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Unlimited Liability |
owner is personally and fully responsible for all losses and debts of the business |
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Limited Life |
Firm legally ceases to exist once the owner dies. |
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Inventory |
A stock of finished goods. |
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Partnership |
Business owned by two or more people |
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Limited Partnership |
Limited by the size of the one's investment in the firm. |
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Bankruptcy |
Granted permission to a business to cease or delay payments. |
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Corporation |
Business where recognized by law as a seperate legal entity having all rights of an individual. |
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Charter |
A government document that gives permission to create a corporation. |
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Stock |
Ownership certificates in the firm. |
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Stockholders |
Shares sold to investors. |
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Dividend |
Check representing a portion of the corporate earnings. |
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Bond |
Promise to repay an amount borrowed. |
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Principal |
Amount borrowed |
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Interest |
Price paid for use of another's money. |
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Double Taxation |
Taxation of both corporate profit and personal income. |
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Merger |
A combination of two or more businesses to form a single firm. |
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Income Statement |
Report showing a business' endevers. |
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Net income |
Subtract all expenses from reveneues |
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Depreciation |
Noncash charge a firm takes for wear and tear on goods. |
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Cash Flow |
Sum of net income and non-cash charges. |
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Horizontal Merger |
Two or more firms produce same product and join. |
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Vertical Merger |
Different manufactures or marketing join. |
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Conglomerate |
Firms with at least 4 businesses with unrelated products. |
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Multinational |
Corp. that has manufacture or service operations in different countries. |
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Name two advantages of a Corporation. |
- Capital is easy to raise by selling stock - Owners have limited liability |
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Name two disadvantages of a Corporation. |
- Subject to more government regulation - Obtaining a charter is expensive |
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Name 3 advantages of a sole proprietorship: |
- Easy to start - Owner doesn't have to share profits -Personal satisfaction |
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Name 5 disadvantages of a sole proprietorship: |
-Financial capital may be difficult to raise -Difficult to attract qualified employees -Lack of managerial experience -Limited capital and inventory -Owners have unlimited liability |
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Why do mergers take place? |
-Grow faster -More efficient -Better image -No rival -Better or more product |
