Business Plans For Dummies®, 2nd Edition

Appendix A. Glossary of Business and Accounting Terms

Account(s):

Usually annual financial records of a business.

Accrual:

A system of accounting in which revenues and expenses are recorded as they are earned and incurred, not necessarily when cash is received or paid.

Added value:

The difference between sales revenue and material costs. See also value added.

Adoption curve:

A graphic representation of the classification of users or buyers of an innovation according to the time of adoption. These categories are as follows: innovators, first 2.5 per cent; early adopters, next 13.5 per cent; early majority, next 34 per cent; late majority, next 34 per cent; laggards, last 16 per cent. Research has shown that these adopter groups have different characteristics, for example social class, age, education, and attitudes. Those launching new products or businesses have to pay particular attention to the characteristics and behaviour of the innovator group in order to identify the most likely early customers, and so focus initial marketing on them.

Advertising:

The central purpose of all advertising activity is to secure as many favourable buying decisions as possible. As a concept, advertising has been around too long for its origins to be precisely traced. As an institutionalised business it has existed in the UK since the 1700s, when newspapers began to feature advertisements. The UK's oldest advertising agency, Charles Baker, was founded in 1812. The most surprising fact about advertising is ...