Glossary

1. Advertising a paid, nonpersonal message communicated to a select audience through a

mass medium.
2. Advertising media the various forms of communication through which advertising
reaches its audience.
3. Accounting the process of systematically collecting, analyzing and reporting financial
information.
4. Business the organized effort of individuals to produce and sell, for a profit, the goods
and services that satisfy societys needs.
5. Business ethics the application of moral standards to business situations.
6. Board of directors the top governing body of a corporation, the members of which are
elected by the stockholders.
7. Business plan a carefully constructed guide for the person starting ones own business.
8. Brand a name, term, symbol, design, or any combination of these that identifies a
sellers products and distinguishes them from competitors products.
9. Bookkeeping the routine, day-to-day record keeping that is a necessary part of
accounting.
10. Balance sheet (or statement of financial position) a summary of a firms assets,
liabilities, and owners equity accounts at a particular time, showing the various dollar
amounts that enter into the accounting equation.
11. Barter system a system of exchange in which goods or services are traded directly for
other goods and/or services without using money.
12. Competition a rivalry among business for sales to potential customers.
13. Consumers individuals who purchase goods or services for their own personal use
rather than to resell them.
14. Corporation an artificial person created by law, with most of the legal rights of a real
person, including the right to start and operate a business, to own or dispose of property,
to borrow money, to sue or be sued, and to enter into binding contracts.
15. Credit immediate purchasing power that is exchanged for a promise to repay it, with or
without interest, at a later date.
16. Contract a legally enforceable agreement between two or more parties who promise to
do, or not to do, a particular thing.
17. Demand the quantity of a product that buyers are willing to purchase at each of various
prices.
18. Database a single collection of data that are stored in one place and can be used by
people throughout the organization to make decisions.
19. Entrepreneur a person who risks time, effort, and money to start and operate a
business.
20. Economics the study of how wealth is created and distributed.
21. Economy the system through which a society answers the three economic questions
what, how, and for whom.
22. Ethics the study of right and wrong and of the morality of choices made by individuals.
23. Free-market economy - an economic system in which individuals and firms are free to
enter and leave markets at will.
24. Information data that are presented in a form that is useful for a specific purpose.
25. Income statement a summary of a firms revenues and expenses during a specified
accounting period.
26. Insurance the protection against loss that is afforded by the purchase of an insurance
policy.
27. International business all business activities that involve exchanges across national
boundaries.
28. Liquidity the ease with which an asset can be converted into cash.
29. Law a rule developed by a society to govern the conduct of, and relationship among, its
members.
30. Market price in pure competition, the price at which the quantity demanded is exactly
equal to the quantity supplied.
31. Management the process of coordinating the resources of an organization to achieve
the primary goals of the organization.
32. Motivation the individual, internal process that energizes directs, and sustain behavior;
the personal force that causes one to behave in a particular way.
33. Marketing the process of planning and executing the conception, pricing, promotion,
and distribution of ideas, goods, and services to create exchanges that satisfy individual
and organizational objectives.
34. Middleman (or marketing intermediary) a marketing organization that links a producer
and user within a marketing channel.
35. Marketing channel is a sequence of marketing organizations that directs a product
from producer to ultimate user.
36. Money anything used by a society to purchase goods and services or resources.
37. Objective a specific statement detailing what an organization intends to accomplish as it
goes about its mission.
38. Partnership an association of two or more persons to act as co-owners of a business for
profit.
39. Pure-competition the market situation in which there are many buyers and sellers of a
product, and no single buyer or seller is powerful enough to affect the price of that
product.
40. Profit what remains after all business expenses have been deducted from sales revenue.
41. Product everything that one receives in an exchange, including all tangible and
intangible attributes and expected benefits; it may be a good, service, or idea.
42. Promotion communication that is intended to inform, persuade, or remind an
organizations target markets of the organization or its products.
43. Retailer a middleman that buys from producers or other middlemen and sells to
consumers.
44. Risk the possibility that a loss or injury will occur.
45. Risk management the process of evaluating the risks faced by a firm or an individual
and then minimizing the costs involved with those risks.
46. Stock the shares of ownership of a corporation.
47. Stockholder a person who owns a corporations stock.
48. Sole proprietorship a business that is owned (and usually operated) by one person.
49. Social responsibility the recognition that business activities have an impact on society,
and the consideration of that impact in business decision making.
50. Supply a) an item that facilitates production and operations but does not become part of
the finished product. b) the quantity of a product that producers are willing to sell at each
of various prices.
51. Strategy an organizations broadest set of plans, developed as a guide for major policy
setting and decision making; it defines what business the is in or wants to be in and the
kind of company it is or want to be.
52. Statistic a measure of a particular characteristic of a group of numbers.