A

AA RATING

In advertising, media and publishing, the Average Audience Rating.

ABUNDANCE OF CAUTION

In banking, a lender’s requirement that the borrower’s collateral equal more than the asset to be purchased with the loan and that the borrower have enough money invested to insure the borrower cannot back out without significant loss of personal finances. If the borrower has his or her own money invested, the borrower will be more committed to succeed.

ACCELERATED COST RECOVERY SYSTEM (ACRS)

An ACCELERATED DEPRECIATION method of FIXED ASSET write-off as an expense faster than the STRAIGHT-LINE DEPRECIATION method. Sometimes called the 3-5-10 RULE that describes the duration in years of the time periods for depreciating different classes of assets.

ACCELERATED DEPRECIATION

Any method of cost recovery of a FIXED ASSET that is faster than using the STRAIGHT-LINE DEPRECIATION method. Traditional rationale supports higher maintenance and repair costs in later years. These costs are offset in the early years by the higher depreciation expense, resulting in a level effect on earnings throughout the useful life of the asset. Sometimes accelerated depreciation is used as a tax shelter because of large up-front write-offs with no reduction of cash flow. See several methods of accelerated depreciation described: ACCELERATED COST RECOVERY SYSTEM; SUM-OF-THE-YEARS-DIGITS; DOUBLE-DECLINING BALANCE.

ACCELERATION CLAUSE

A provision in a NOTE, BOND or MORTGAGE that states that, in the event of a default by the debtor, the entire balance outstanding shall become due and payable.

ACCEPTANCE

In contracting, an agreement by a buyer to accept an offer by a seller, often preceded by negotiation of price, scope, terms and conditions. In general financial transactions, the free act of assuming a risk. Some examples include: commercial paper issued by a sales finance company; an agreement on a TIME DRAFT promising payment; a BANKER’S ACCEPTANCE; a time draft drawn by the seller of goods on the buyer (a TRADE ACCEPTANCE).

ACCEPTANCE COMPANY

A company that purchases consumer loans (PAPER) from others. When sales are made, small businesses can make loans to customers then sell the loans to an acceptance company to obtain cash, but less cash than waiting for payment. Also known as sales finance company; factoring company. See FINANCE COMPANY.

ACCOUNT

In general, the contractual relationship between buyer and seller under which payment is made at a later time. The term OPEN ACCOUNT is used for commercial transactions whereas CHARGE ACCOUNT is used to describe personal transactions. In accounting and bookkeeping, an historical record of transactions, as shown on a STATEMENT OF ACCOUNT. Each account is an individual sub-classification of 1) an asset; 2) a liability; 3) equity; 4) income; or 5) an expense as represented by ledger pages to which debit and credit entries are chronologically posted to record changes in value. Guidance for typical account types can be found in a CHART OF ACCOUNTS. In banking, a relationship established at a bank in the name of a client where deposits and withdrawals are made. Usually deposits are on-hand against which withdrawals can be made. Administrative responsibility is handled by an ACCOUNT OFFICER.

ACCOUNT AGING

See AGING.

ACCOUNTANT

A practitioner of ACCOUNTING as a profession after having attained a level of financial knowledge. A person whose work is to inspect, keep and adjust accounts. See also BOOKKEEPER; CERTIFIED PUBLIC ACCOUNTANT.

ACCOUNTANT’S OPINION

A statement signed by an independent public accountant that describes the scope and accuracy of an examination of the financial books and records of a business. Because financial reporting involves considerable discretion, the accountant’s opinion is an important assurance of integrity.

ACCOUNT EXECUTIVE

A professional person in a firm who is responsible for a customer’s ACCOUNT; the person at the firm who is contacted for discussion about the account.

ACCOUNTING

The system for recording, verifying and reporting financial information. Also, the profession performing these functions. See also ACCOUNT.

ACCOUNTING CONTROL

Procedures and systems used to maintain accurate financial records and to safeguard the assets of the company.

ACCOUNTING CYCLE

The routine steps in processing accounting data during an accounting period. In sequence, 1) occurrence of the transaction, 2) classification of each transaction in chronological order (journalizing), 3) recording the classified data in ledger accounts (posting), 4) preparation of financial statements and 5) closing of nominal accounts.

ACCOUNTING EQUATION

The mathematical formula that defines the relationships of accounting arithmetic. At a given point in time, the BALANCE SHEET reflects the results of the accounting equation, wherein ASSETS equal LIABILITIES plus NET WORTH. To account for changes in financial condition over a period of time, the equation must also consider the INCOME STATEMENT effects of operations, wherein ASSETS equal LIABILITIES plus NET WORTH plus INCOME less EXPENDITURES.

ACCOUNTING FIRM

A business that provides professional financial and accounting services.

ACCOUNTING PERIOD

The normal calendar duration for reporting of financial information. The time for closing accounts when accounting data are summarized into financial statements. In most businesses, this is done monthly, quarterly and annually.

ACCOUNTING PRACTICES

Basic concepts, assumptions, policies, methods and practices used by a company for maintaining the BOOKS OF ACCOUNT and summarization into FINANCIAL STATEMENTS. The principles should be consistent with GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. In larger companies, accounting policy, practices and principles may each have more precise definitions.

ACCOUNTING PRINCIPLES

Basic concepts, assumptions, policies, methods and practices used by a company for maintaining the BOOKS OF ACCOUNT and summarization into FINANCIAL STATEMENTS. The principles should be consistent with GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. In larger companies, accounting policy, practices and principles may each have more precise definitions.

ACCOUNT PAYABLE

See ACCOUNTS PAYABLE.

ACCOUNT RECEIVABLE

See ACCOUNTS RECEIVABLE.

ACCOUNTS PAYABLE

Money owed by the business to suppliers; amounts owed to others (creditors) on an open account for goods and services purchased by a business. Analysts look at the relationship of accounts payable compared to purchases for indications of sound day-to-day financial management. See TRADE CREDIT.

ACCOUNTS RECEIVABLE

Money owed by customers to the business; amounts owed to a business for goods and services sold by the business but not yet collected. A key factor in analyzing LIQUIDITY of a business is the ability to meet current obligations without additional revenues.

ACCOUNTS RECEIVABLE AGING

Classification of customer ACCOUNTS RECEIVABLE according to the date of sale. The aging schedule reveals patterns of delinquency and shows where collection efforts should be concentrated. The longer accounts are left unpaid, the more likely they become uncollectible. Aging evaluations can help prevent losses on future sales, since old customers who fail to pay may begin buying from other sources of supply and will leave bad debts on the aged accounts in your business. See AGING; AGING SCHEDULE.

ACCOUNTS RECEIVABLE FINANCING

Short-term loans made to obtain cash using ACCOUNTS RECEIVABLE as COLLATERAL. The cash received will be less than the amount of the accounts receivable.

ACCRUAL BASIS

An accounting method whereby income and expense items are recognized and entered in the books as they are earned or incurred, even though they may not have been received or actually paid. Many small businesses use the alternative CASH BASIS or MODIFIED CASH BASIS accounting method. Opposed to CASH BASIS.

ACCRUAL METHOD

See ACCRUAL BASIS.

ACCRUALS

See ACCRUED EXPENSE.

ACCRUE

To accumulate over a period of time, such as ACCRUED INTEREST, ACCRUED EXPENSE or ACCRUED DEPRECIATION. As an example, accrued expenses have been incurred but are not yet payable. See also ACCRUED.

ACCRUED

That which has accumulated over a period of time and is an obligation that must be satisfied at some point in the future.

ACCRUED DEPRECIATION

See ACCUMULATED DEPRECIATION.

ACCRUED EXPENSE

A debt that has been incurred or has accumulated over a period of time and must be paid but has not yet been paid.

ACCRUED INCOME

Sales or revenue that has been earned or accumulated over a period of time but has not yet been collected.

ACCRUED INTEREST

INTEREST that has accumulated over a period of time and is obligated to be paid but has not yet been paid. Accrued interest can either be income, such as interest from investments, or it can be an expense, such as payment of interest on a debt.

ACCUMULATED DEPRECIATION

An accounting term for the amount of DEPRECIATION accrued over a period of time.

ACCUMULATED DIVIDEND

Payment to stockholders due to be paid.

ACID TEST

See QUICK RATIO.

ACID TEST RATIO

See QUICK RATIO.

ACQUISITION

To purchase a business or buy another business. Also, the process of obtaining a loan, obtaining other forms of financing or the purchase of property by the business.

ACQUISITION COST

The amount of money expended to obtain title to property, usually relating to fixed assets.

ACRS

See ACCELERATED COST RECOVERY SYSTEM.

ACTUAL

That which has occurred, as opposed to that which was previously expected, budgeted, estimated or planned.

ACTUAL COSTS

The expenses that have been incurred and recorded in the books; as opposed to forecasted or anticipated expenses. Also, production expenses that are incurred by production activities during an accounting period.

ACTUAL PERFORMANCE

In accounting, the financial amounts recorded as a result of operations; demonstrating the manner in which a product operates; the results of decisions.

ADDENDUM

Additional material attached to and made part of a document. Often an addendum is the result of information learned after the original document was prepared.

ADD-ON INTEREST

A method of computing interest whereby interest charges are made for the entire principal amount for the entire term, regardless of any repayments of principal made. The result is an interest charge that is almost double that of the stated SIMPLE INTEREST RATE.

ADJACENCIES

In retail, adjoining merchandise-category areas in store layouts.

ADJUSTED BASIS

The original COST BASIS of property reduced by depreciation and increased by improvements.

ADJUSTING ENTRY

An accounting entry to record an internal transaction on an account that is usually made at the end of an accounting period, such as an allocation or correction of an error.

ADJUSTMENT ASSISTANCE

Financial and technical assistance by a government to companies, workers and communities designed to help them adjust to rising import competition.

ADMINISTRATIVE EXPENSE

Costs associated with staff and supporting personnel who are involved in managing the activities of the business; indirect expenses. As opposed to direct or production personnel expenses.

AD VALOREM EQUIVALENT

In international trade, a “specific” duty imposed as a percentage of the value of the imported goods, usually applied during a tariff adjustment.

AD VALOREM TARIFF

In international trade, a duty (tariff) assessed by customs as a percentage of the value of the imported goods.

AD VALOREM TAX

A tax that is proportionate to the value of the property being taxed, such as sales tax; a tax calculated as a flat percentage of sales price. As opposed to a specific tax per unit based on quantity, such as excise tax per package of cigarettes.

ADVANCE

To give an amount before it is due, such as an advance payment of salary to an employee.

ADVANCE PAYMENT

In international trade, payment for goods by a foreign customer prior to receiving the goods. This method of payment is beneficial to the supplier but is very risky for the foreign customer because the goods may not get shipped as planned, the goods may get lost or the goods could be damaged during shipment.

ADVENTURE CAPITAL

A speculative investment, sometimes by another entrepreneur who was previously successful in a new business venture, sometimes by another business looking for new avenues of growth. Adventure capital is a more risky investment than venture capital. In 1987, it was estimated that about $27 billion was invested as adventure capital, as compared to about $1 billion invested in VENTURE CAPITAL. See also ADVENTURE CAPITALIST; VENTURE CAPITAL.

ADVENTURE CAPITALIST

A speculative investor who invests for the excitement of the venture, based on faith and trust that the vision of the person, new company, product or service will be successful; the decision is not based on solid financial analysis, but with the hope financial rewards will result. An adventure capitalist is more speculative than a VENTURE CAPITALIST. Also see ADVENTURE CAPITAL.

ADVERTISE

The act of providing information to the public concerning products and services for sale.

ADVERTISEMENT

A paid message, in a public medium, designed to influence the purchasing behavior or thought pattern of an audience.

ADVERTISING

Providing information to the public concerning the products and services for sale through written or spoken media, such as newspapers, handbills, television and mail. An enticement to encourage people to buy.

ADVERTISING MEDIA

The public means for distribution of an advertising message. The most common media include newspapers, magazines, radio, television, direct mail and computer bulletin boards.

ADVERTISING SUCCESS FORMULA

The seven essential steps that are the keys to pay-off of advertising money spent: 1) get attention, 2) hold attention, 3) create desire, 4) make the message credible, 5) provide the value, 6) make it easy and 7) cause action now.

ADVISING BANK

In international trade, a bank, operating for the exporter in the exporter’s country, who handles letters of credit for foreign banks. An advising bank informs the exporter of the conditions of the letter of credit without necessarily bearing responsibility for payment.

AFFIDAVIT

A written statement that is sworn under oath before a notary public or other official authorized by law to administer an oath.

AFFILIATE

Two companies are affiliated when one owns less than a majority of the voting stock of the other, or when both are subsidiaries of a third company, which is the parent company. See also SUBSIDIARY; PARENT COMPANY.

AFFIRMATIVE ACTION PROGRAM

A program designed to ensure that all parties are being treated equally regardless of color, sex, race, creed, age, disability, etc., particularly so that minorities are not discriminated against.

AFTERMARKET

The sale of goods, services or securities by another company after the original manufacture or original issue.

AGENCY

A legally established relationship (often a business firm) whereby one party (the PRINCIPAL) delegates to another party (the AGENT) the right to act on behalf of the principal in business transactions and to exercise some degree of discretion while acting. For example in the insurance industry, an agency represents an insurance company (the PRINCIPAL).

AGENT

One who is authorized to represent and act on behalf of another person or business (called the PRINCIPAL) in transactions involving a third party. Unlike an employee who merely works for the principal, an agent works in place of the principal. Agents have three basic characteristics: 1) they act on behalf of and are subject to control of the principal; 2) they do not have title to the principal’s property; 3) they owe their duty of allegiance to the principal’s orders.

AGING

In business, the process of determining the length of time since a financial transaction occurred on an account. A listing of the accounts (an AGING SCHEDULE) showing time periods, past due amounts, customer names, etc. See ACCOUNTS RECEIVABLE AGING; INVENTORY AGING.

AGING RECEIVABLES

See ACCOUNTS RECEIVABLE AGING.

AGING SCHEDULE

A listing of items showing time periods along with amounts, names, titles, actions, etc. Examples: a list of ACCOUNTS according to the length of time they have been outstanding; a list of maintenance actions according to the length of time since the last maintenance was performed. See AGING.

AGREEMENT

An understanding or arrangement between two or more businesses or business people; a CONTRACT. An agreement may be verbal or written; if only verbal, the agreement is subject to a greater amount of misunderstanding.

ALIEN

A person born outside the United States, that has not been naturalized and is not a citizen of the United States.

ALLOCATE

To set funds apart for a specific purpose. Also, to distribute proportionate shares according to a plan.

ALLOCATED COSTS

Expenses that are proportionately assigned to costs that result from a cause/effect basis. Example: Indirect costs are often proportioned to direct costs when establishing a bid posture. Also, expense proportioned to different areas of operation on an operating statement.

ALLOWANCE

In retail, any means by which the seller reduces the effective cost of goods purchased by a retailer. Common allowances are for advertising, freight or markdowns.

ALLOWANCE FOR BAD DEBTS

An account established to record a subtraction from ACCOUNTS RECEIVABLE, to allow for those accounts that will not be paid.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

An account established to record a subtraction from ACCOUNTS RECEIVABLE, to allow for those accounts that will not be paid.

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

An account established to record a subtraction from ACCOUNTS RECEIVABLE, to allow for those accounts that will not be paid.

ALLOWANCES

Deductions from the price of previously sold merchandise for merchandise not received or received in damaged condition.

AMORTIZATION

See AMORTIZE.

AMORTIZATION SCHEDULE

A table for an AMORTIZED ASSET that shows the term, time periods, principal amount, interest rate, payment amounts that are due, payable or paid. See AMORTIZE.

AMORTIZE

Repayment of a loan by installments; an accounting procedure allowing gradual repayment (retirement) of a debt by means of systematic payments of principal and interest over a period of the estimated life of the asset on which the loan is made or secured. For FIXED ASSETS, DEPRECIATION is the allowance for wear-out. For natural resources, DEPLETION is the allowance for the wasting away of the asset.

AMORTIZED ASSET

See AMORTIZE.

AMOUNT

A numerical representation of quantity. In finance, amount usually refers to quantity of money. Also refers to a sum, i.e., “That amounts to -.”

ANCHOR

In retail, a large well known store in a shopping mall that usually attracts customers to smaller stores.

ANNUAL

Occurring on a yearly basis; each 12-month period.

ANNUAL BASIS

See ANNUALIZE.

ANNUAL DEBT SERVICE

The amount of money on a total yearly basis required for the payment of interest and principal on a long-term debt. Also called DEBT SERVICE.

ANNUAL INTEREST RATE

See INTEREST; SIMPLE INTEREST.

ANNUALIZE

To normalize data to a yearly basis, usually for comparison with other periods. A statistical technique whereby figures covering a period of less than one year are extended to cover a 12-month period to adjust for seasonal or other variations, called an ANNUAL BASIS.

ANNUAL MEETING

A once-a-year meeting of stockholders where the managers of a company report the year’s results; the board of directors stand for election for the next year; and those present provide a forum for discussion or voting on pivotal issues of the company. Usually presided by the Chairman of the Board of Directors or the Chief Executive Officer.

ANNUAL PERCENTAGE RATE

The yearly INTEREST RATE; an expression of the relationship of the total finance charge (interest) to the total amount to be financed (the loan) as required by the Truth-in-Lending Act. See INTEREST; SIMPLE INTEREST.

ANNUAL RATE OF INTEREST

Same as ANNUAL PERCENTAGE RATE.

ANNUAL REPORT

A document prepared annually. The document prepared by a company’s management for submittal to the owners (stockholders) summarizing the activities of the business for the previous year.

ANSWERING MACHINE

An electronic device that is attached to a telephone line for the purpose of recording a message from a caller when the telephone is not answered by the called party.

ANTI-DUMPING DUTY

In international trade, a DUTY levied against all entries of a product that was found to have been dumped, sometimes levied retroactively. See DUMPING.

ANTITRUST

Federal laws designed to prevent monopolies and restraint of trade.

ANTITRUST LAWS

See ANTITRUST.

A/P

An accountant’s abbreviation of ACCOUNTS PAYABLE.

APPLIED TARIFF RATE

In international trade, the TARIFF rate actually used to determine the amount of DUTY owed on a particular import transaction. Differs from BOUND RATE.

APPRAISAL

The process of formulating and supporting an opinion of value; a written document by a professional appraiser stating the value of an asset; an estimate of the amount for which an asset could be sold. Also, an evaluation of performance, i.e., an employee performance appraisal. See also APPRAISAL REPORT.

APPRAISAL REPORT

The document prepared by an appraiser that presents an estimate of value along with information substantiating the methods, assumptions and conditions of the APPRAISAL. In evaluating personnel, the document contains a review of goals met and critical incidents, (good and bad) influencing the future performance of the individual.

APPRAISER

A person professionally qualified by education, experience and ability to conduct an opinion of the value of real or personal property; one who estimates value. Often an appraiser may be certified by a professional organization, government or other means. Also, a supervisor is an appraiser of the performance of an employee. See APPRAISAL.

APPRECIATION

An increase in value of an asset due to economic or related causes. The opposite of DEPRECIATION.

A/R

An accountant’s abbreviation of ACCOUNTS RECEIVABLE.

ARBITRAGE

The difference between interest rates; the simultaneous purchase and sale of debt securities in different markets to profit from the interest rate differentials.

ARBITRATION

A nonjudicial submission of a controversy to selected third parties for settlement of the controversy in a manner provided by law or by agreement among the parties.

ARM’S LENGTH TRANSACTION

A transaction in which the parties are dealing from equal bargaining positions, neither party is subject to the other’s control or dominant influence, and the transaction is treated with fairness, integrity and legality. If discovered by a taxing authority, the absence of an arms length transaction may result in additional taxes incurred resulting from transfer at less than fair market value.

ARRANGER OF CREDIT

A person who regularly arranges for consumer credit by another person if a finance charge is imposed.

ARREARS

The state of being delinquent by not paying a debt when due; past due. In lending, a loan on which interest is paid at the end of the period; as opposed to interest paid in advance (the beginning of the period).

ARTICLES OF INCORPORATION

A document filed with a state of the United States by the founders of a corporation. Upon approval of the articles, the state issues a CERTIFICATE OF INCORPORATION that legally establishes the corporation as a business entity. The two documents together (Articles of Incorporation and Certificate of Incorporation) are sometimes called the CHARTER of the corporation, embodying such information as the corporation’s name, officers’ names, the incorporator, purpose, amount of authorized shares, and number of directors. The charter and the laws of the state give rise to the powers of the corporation. Rules governing the internal management of the corporation are set forth in the BYLAWS as drawn up by the founders/officers.

ASKED

Same as ASKING PRICE.

ASKING PRICE

The price at which someone who owns something is willing to sell it or where negotiation between seller and buyer can begin to reach agreement on the exchange price for the transaction. Asking price differs from FIRM PRICE in that asking price implies some degree of flexibility for negotiation before reaching the agreed price at sale. As opposed to a BID price made by the prospective buyer to begin the negotiation process.

AS OF

The calendar date from which terms begin; the STATEMENT DATE.

ASSESSED VALUE

The value of real property established for the purpose of computing real property taxes. The assessed value may differ from the APPRAISED VALUE and MARKET VALUE.

ASSESSMENT

An official valuation of real property for the computation of real property taxes. Same as ASSESSED VALUE.

ASSET

Anything of value that is owned by a business or an individual. Assets are either financial, such as cash; physical, such as real property; tangible, such as a patent; or intangible, such as goodwill. An asset embodies probable future benefit and the ability to contribute directly or indirectly to future income. In accounting, assets are listed on the left hand side of a balance sheet statement showing the things owned. Things owed are listed on the right side (liabilities and equity).

ASSET-BASED FINANCING

A loan that is secured by a specific ASSET of a small business, especially ACCOUNTS RECEIVABLE or INVENTORY.

ASSETS

The sum, accumulation or list of each ASSET; the total of all amounts owned. On a BALANCE SHEET, a summary list of the property and things owned.

ASSETS TURNOVER

Same as TOTAL ASSETS TURNOVER.

ASSIGNMENT

The transfer of right, title and interest in the property of one person (the assignor) to another person (the assignee). Assignments are made for things such as sales contracts, mortgages, leases and options. Most contracts consist of rights and duties. Of these, the duties can be delegated or assigned unless prohibited in the contract.

ASSOCIATION

People who join together for a common business purpose, sometimes treated as a corporation under tax law. An association can be a “for-profit” or a “not-for-profit” organization. A poorly drafted partnership agreement could be judged by taxing authorities as an association and taxed as a corporation.

AT PAR

At a price equal to the PAR value of the security; the original issue price of a security.

AT-RISK RULES

Special rules (practices) established by the Internal Revenue Service to restrict leverage opportunity by limiting an individual taxpayer’s deductible losses to the amount he or she is “at risk,” generally the sum of amounts contributed (invested) plus amounts borrowed and liable for payment from personal assets.

ATTACH

In business language, to seize or get control of. Usually used in the sense of recovering from a bad debt, such as to attach collateralized assets to recoup the money not repaid.

ATTACHMENT

See ATTACH.

ATTORNEY

Any person legally empowered to act as agent for or on behalf of another person; a lawyer. See LAWYER.

ATTORNEY AT LAW

See LAWYER.

ATTORNEY-IN-FACT

A competent and disinterested person who is authorized by another person to act in his or her place.

ATTRACTION PRINCIPLE

The pulling force of a commercial business center due to existing merchandising factors. A shopping center made up of many diverse businesses holds cumulative attraction for customers.

AUDIT

A professional examination and verification (usually by an independent CERTIFIED PUBLIC ACCOUNTANT) of a company’s accounting documents and other papers; a review by a disinterested accountant for the purpose of rendering an opinion of fairness.

AUDITED STATEMENT

A FINANCIAL STATEMENT that has been the subject of an AUDIT by an independent CERTIFIED PUBLIC ACCOUNTANT.

AUDITOR

An outside or independent CERTIFIED PUBLIC ACCOUNTANT who examines the financial records in accordance with the GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; a person who performs an AUDIT.

AUDITOR’S CERTIFICATE

See ACCOUNTANT’S OPINION

AUDIT REPORT

A document that contains the results of an examination by an independent CERTIFIED PUBLIC ACCOUNTANT and usually signed by the accountant; the published results of an AUDIT. An audit report often includes AUDITED STATEMENTS.

AUDIT TRAIL

A step-by-step record review by which accounting data are traced to the source. Thereby, the validity and accuracy of accounting data can be verified by reviewing the sequence of events leading to the stated data.

AUTHORIZED SHARES

The number of shares of each class of stock that is allowed by the ARTICLES OF INCORPORATION, and that represents the maximum capital investment in the corporation as permitted by the CHARTER. The books of the corporation will show the number of shares ISSUED AND OUTSTANDING, the number of shares of TREASURY STOCK and the number of shares of UNISSUED STOCK comprising the total authorized shares. Also called authorized stock.

AUTHORIZED STOCK

See AUTHORIZED SHARES.

AVERAGE COST

A method of valuing the cost of INVENTORY; a specialized costing method that combines beginning inventory costs with the current-period production costs less the ending inventory. The result is then divided by the equivalent number of units of production to create a measure of AVERAGE COST PER UNIT of output.

AVERAGE COSTING

A method of valuing the cost of INVENTORY; a specialized costing method that combines beginning inventory costs with the current-period production costs less the ending inventory. The result is then divided by the equivalent number of units of production to create a measure of AVERAGE COST PER UNIT of output.

AVERAGE COST PER UNIT

The approximate expenses incurred to produce a single unit of production as calculated by dividing the total costs incurred by the total number of units produced during an accounting period.

AVERAGE FIXED COST

Cost determined by dividing total fixed cost by the number of units of output.

AVERAGE REVENUE

Total revenue divided by the number of units sold.

AVERAGE TOTAL COST

The cost determined by dividing total cost (fixed and variable) by the number of units of output.

AVERAGE VARIABLE COST

Cost determined by dividing total variable cost by the number of units of output.

AXIAL GROWTH

City expansion that occurs outward along main transportation routes and provides opportunity for business development.

 

All definitions were taken from www.small-business-dictionary.org.