BCOR FINAL Flashcards

Terms Definitions
channel functions
social costs
private costs+externalities
basic research methods
anticompetitive behavior, price fixing
Generally Accepted Accounting Principles GAAP are guidelines/rules and procedures governing the form and content of financial reports and they are formulated by the Financial Accounting Standards Board Measured in dollarsEntity-basedThe business is a going concernRecord at costDual-aspect (double-entry bookkeeping)Based on an accounting period (usually one year) ConservatismRealizationMatchingConsistencyMaterialityFull Disclosure and Transparency
control, risk, investment, profit
Adam Smith
1723-1790, author, political economist, moral philosopher. father of free trade and capitalism competition fosters efficiency and low prices by forcing producers to offer the best products at the most reasonable price
value = ?
perceived benefits/perceived price
psychological influences (on consumer purchase decision process) MPPLVL
motivationpersonalityperceptionlearningvalues, beliefs, and attitudeslifestyle
Elastic demand
lots of alternatives, varying prices
ex: clothing, furniture
Global trade
Provides positive opportunities and Negative Consequences 
Organizational structures 
i love fun cuz jews ski fucking madly 
forensic accounting
accounting fit for legal reviewinvolves analyzing financial documents in search of fraudulent entries or financial misconduct
economic indicators
GUPI GDP Unemployment Rate Productivity Inflation Rate
a condition characterized by a continuing rise in prices -Widespread increases in prices (too much money chasing the SAME amount of goods)-Measured by Consumer Price Index (CPI) -Value a “basket” of ~400 goods/services MONTHLY-Government tries to reduce inflation -HOW DOES INFLATION IMPACT PURCHASING POWER?-Costs increase when wages do not-HYPERINFLATION- can’t hold currency, wages don’t adjust
a time-ordered list of account transactions
payments, gifts, or special favors intended to influence the outcome of a decision
marketing mix influences (on consumer purchase decision process)
data mining
extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions
involves giving each product a distinct name (useful when each brand is intended for a different segment)
evaluative criteria
represent both the objective attributes of a brand (such as display) and the subjective ones (such as prestige) you use to compare different products and brands
strategic alliance
a partnership formed to create competitive advantage on a worldwide basis
S corporation
a unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships Most popular form of corporationEstablished in 1958 (effective corporate tax rates were 96% then)Limited liability Single taxation limitationsMust be a domestic U.S. enterpriseShareholders must be U.S. citizens (no foreign ownership)Limited number of shareholders (100)Limitations on who shareholders may be: individuals, estates, trustsOne class of stock to qualify must have: no more than 100 shareholders have shareholders that are individuals or estates and are citizens or permanent residents of the U.S Have only one class of outstanding stockNot have more than 25% of income derived from passive sources
Enlightened self interest
Engaging in responsible conduct because it is in the best interest of your business
Taking into account the interests of stakeholders because it benefits your business motive is key
limited liability
the responsibility of a business's owners for losses only up to the amount they invest; limited partners and shareholders have limited liability You are ONLY responsible for the amount you Invested into the business, CANNOT be taken from personal assets
accounting equation
assets equal liabilities plus owners' equity assets=liabilities+owner's equity
a firm's economic resources, or items of value that it owns, such as cash, inventory, land, equipment, buildings, and other tangible and intangible things
countertrade agreements
foreign trade agreements that involve bartering products for other products instead of for currency
the physical facilities that support a country's economic activities, such as railroads, highways, ports airfields, utilities, and power plants, schools hospitals, communication systems, and commercial distribution systems
World Bank
an organization established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries; formally know as the international bank for reconstruction and development
the market structure that exists when there is only one business providing a product in a given market 
ex: electricity, water, cable 
trade protectionism
TRADE PROTECTIONISM: The use of government regulation to limit the import of goods and services (to protect your own domestic industry) Trade protectionism can be a POLITICAL action as well as anECONOMIC oneTariffsQuotasEmbargoSubsidies -Trade Protectionism PROTECTS domestic industries BUT reducescompetition and restricts free trade
manufacturing economy
devoted to manufacturing goods and providing services rather than producing agricultural products
ethical issue
an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong. ethical or unethical
most common issue is a conflict of interest, exists when a person must choose whether to advance his or her own personal interests or those of others 
2nd most common issue is abusive or intimidating behavior  
another is fairness and honesty, communications, business relationships 
main focus is to satisfy customers, includes all the activities designed to provide goods and services that satisfy customers needs plan and develop products and make decisions about how much to charge for their products and when and where to make them available use promotion- advertising, personal selling, sales promotion, and publicity- to communicate the benefits and advantages of their products to consumers and increase sales
the difference between what it costs to make and sell a product and what a customer pays for it
Nonprofit organizations
organizations that may provide goods or services but do not have the fundamental purpose of earning profits
the market structure that exists when there are very few businesses selling a product 
ex: iphones, airplanes
output per person per hour -What affects productivity? -Computers -Education -Machinery -Competition -Fertilizers
business ethics
principles and standars that determine acceptable conduct in business 
an individual's or a work group's decisions that society evaluates as right or wrong 
decisions influenced by three main factors: individual moral standards, influence of managers and co-workers, and the opportunity to engage in misconduct 
legal and political barriers
Laws and regulationsTrade Restrictions/ProtectionismPolitical instability, sanctions
economic contraction
a slowdown of the economy characterized by a decline in spending a during which businesses cut back on production and lay off workers
Financial accounting
External UsersUsed to report financial performance to any group outside the business Government – SEC, IRSLendersInvestorsSuppliersCustomersLabor Unions
marketing channel
consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users
government tax on goods or services entering a country; primarily serve to raise prices on imports
sociocultural influences (on consumer purchase decision process) PRFSC
personal influencereference groupsfamilysocial classculture and subculture
situational influences (on consumer purchase decision process) PSPTA
purchase tasksocial surroundingsphysical surroundingstemporal effectsantecedent states
transnational firms
uses a global marketing strategy, adapting where needed
a business owned and controlled by the people who use it- producers, consumers, or workers with similar needs who pool their resources for mutual gain
Prices go down – less money chasing same goods Less money needed to buy an item Consumers wait for price to go down, so, they delay purchases
the lack of funds to operate a business normally
Governing bodies of Accounting
SEC- securities and exchange commision
PCAOB-public company accounting oversight board
FASB-financial accounting standards board
IASB-international accounting standards board 
leveraged buyout
an attempt by employees management, or a group of investors to purchase an organization primarily through borrowing
comparative advantage
A country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items
the state or quality of being equal; correspondence in quantity, degree, value, rank, or ability.
per capita income
indicates the income level of "average" americans. useful in determining how much "average" consumers spend and how much money Americans are earning
double-entry bookkeeping
a system of recording and classifying business transactions that maintains the balance of the accounting equation
industrialized nations// less developed countries
economically advanced countries such as USA, Japan, Great britain, Canada africa, asia, south america are the opposite
a prohibition on trade in a particular product
the result of two firms forming one company
Economic system
a description of how a particular society distributes its resources to produce goods and services unlimited demand, limited resources ownership and control of resources three main issues 1. what goods and services, and how much of each, will satisfy consumers' needs? 2. how will goods and services be produced, who will produce them, and with what resources will they be produced? 3. how are the goods and services to be distributed to consumers? 
how a society allocates its resources to provide goods and services- unlimited demand
-limited resources 
a good or service with tangible and intangible characteristics that provide satisfaction and benefits
the condition in which a percentage of the population wants to work but is unable to find jobs Measures population over 16yrs who are ACTIVELY looking for work-Frictional- people in between jobs- Cyclical- seasonal jobs-Structural- people are laid off, mismatch in supply and demand for jobs
a group of firms or nations that agrees to act a as a monopoly and not compete with each other, in order to generate a competitive advantage in world markets
limited liability partnership
a partnership that limits partners' risk of losing their personal assets to only their own acts and omissions and to the acts and omissions of people under their supervision
a legal entity with authority to act and have liability separate from its owners Advantages:Limited liabilityTransfer of ownershipPerpetual lifeAccess to sources of funds and creditExpansion potential more money for investment sizeperpetual lifeease of ownership changeease of drawing talented employees separation of ownership from management Disadvantages:Double taxationForming a corporationDisclosure of informationEmployee-owner separationGovernment regulationextensive paperwork two tax returns sizedifficulty of oftermination (hard to end)possible conflict with stockholders and board of directors initial cost
general partnership
a partnership in which all owners share in operating the business and in assuming liability for the business's debts AdvantagesSingle Taxation Ease of organizationAvailability of capital and creditCombined knowledge and skillsDecision makingRegulatory controls DisadvantagesUnlimited liabilityDistribution/Sharing of profitsLimited sources of fundsDecision makingLife of the partnershipChallenges to friendships
selective comprehension
interpreting information so that it is consistent with your attitudes and beliefs
restriction placed on the amount of a product allowed to enter or leave the country
code of ethics
formal statement of ethical principles and rules of conduct
equilibrium price
the price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time
limited partnership
a partnership with one or more general partners and one or more limited partners
right to be heard
assures consumers that their interests will receive full and sympathetic consideration when the government formulates policy fair treatment for consumers who complain about purchased product
consumer price index
measures changes in prices of goods and services purchased consumption by typical urban households
Free market system
pure capitalism, in which all economic decisions are made without government intervention self-interest behavior- producers, consumers, labor force, investors, entrepreneurs regulated by competition, justice to earn profits by providing tangible and intangible products free to pursue profit, succeed or fail, make choices all resources are allocated to their most efficient uses
absolute advantage
A rare monopoly exists when a country is theOnly source of an itemOnly producer of an itemMost efficient producer of an item
a legal form of business with two or more owners Advantagesmore financial resources shared management and pooled/ complementary skills and knowledge longer survivalno special taxes Disadvantages unlimited liability division of profits disagreements among partners difficulty of termination
certified public accountant
an individual who has been state certified to provide accounting services ranging from the preparation of financial records and the filing of tax returns to complex audits of corporate financial records 
professional who provides accounting services to the public for a fee
sole proprietorship
a business that is owned, and usually managed, by one person DisadvantagesUnlimited liability- risks of personal lossLimited sources of fundsLimited skillsLimited ability to attract & retain talentLack of permanence/
continuity management difficulties overwhelming time commitment few fringe benefitslimited growth and life span AdvantagesSingle Taxation- taxed as a personal income of the ownerEase and cost of formationControl of the businessSecrecyDistribution and use of profitsGovernment regulationEasy to open and close the business being your own boss, pride of ownership, leaving a legacy, retention of company profit
communication: elements of process
(1) source(2) message(3) channel of communication(4) receiver(5) encoding(6) decoding
consideration set
the group of brands that a consumer would consider acceptable from among all the brands of which he or she is aware in the product class
reference groups
people to whom an individual looks as a basis for self-appraisal or as a source of personal standards; affect consumer purchases because they influence the information, attitudes, and aspiration levels that help set a consumer's standards
international financial reporting standards
GAAP – Maintained by FASB (Financial Accounting Standards Board)
IFRS – Maintained by IASB (International Accounting Standards BoardIncreasing need for convergence / standardization / uniformity / comparability
market failures
The market may fail to allocate or account for all of the costs and benefits of a product
 Externalities are over-produced Public goods are under-produced
trial balance
a summary of the balances of all the accounts in the general ledger
import tariff
a tax levied by a nation on goods imported into the country fixed tariff- a specific amount of money levied on each unit of a product brought into the country ad valorem tariff is based on the value of the item critics say: inhibits free trade, and competition supporters: insulate domestic industries, particularly new ones, against well-established foreign competitiors
north american free trade agreement (NAFTA)
agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among Canada, the United States, and Mexico
Taking a firm private
involves the efforts of a group of stockholders or management to obtain all the firm's stock for themselves
ethics vs the law
The Law is an external guide, and ethics is an internal guide. The lawis limited and written in generalities and doesn’t cover ALL circumstances.Laws can contradict your own ethics.
ways to enter a foreign market (from low to high risk/profit)
export (direct and indirect)licensejoint venturedirect investments
General agreement on tariffs and trade (GATT)
a trade agreement, originally signed by 23 nations in 1947, that provided a forum for tariff negotiations and a place where international trade problems could be discussed and resolved
marketing research process (5 steps) DDCDT
(1) define the problem or identify the opportunity(2) develop the research plan(3) collect relevant information(4) develop findings(5) take marketing action
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