Essentials of Contemporary Business

Glossary

absolute advantage the ability to produce more goods using fewer resources than other providers.

accounting process of measuring, interpreting, and communicating financial information to enable people inside and outside the firm to make informed decisions.

accounting cycle set of activities involved in converting information and individual transactions into financial statements.

accounting equation formula that states that assets must equal liabilities plus owners' equity.

accrual accounting accounting method that records revenues and expenses when they occur, not necessarily when cash actually changes hands.

acquisition agreement in which one firm purchases another.

advertising paid nonpersonal communication, usually targeted at large numbers of potential buyers.

affective conflict disagreement that focuses on individuals or personal issues.

affinity program marketing effort sponsored by an organization that solicits involvement by individuals who share common interests and activities.

angel investor a wealthy individual who invests money directly in new ventures in exchange for equity.

application service provider (ASP) outside supplier that provides both the computers and the application support for managing an information system.

asset anything of value owned or leased by a business.

balance of payments overall flow of money into or out of a country.

balance of trade difference between a nation's exports and imports.

balance sheet statement of a firm's financial position ...