Current Ratio: A Valuable Formula for Bookkeepers

A type of short-term operating liability of a business, in which you record the amounts owed to vendors or suppliers for the purchase of products, supplies, parts, and services that you buy on credit.

The short-term asset in which you record the amounts owed to your business from sales of products and services on credit to your customers.

The process of adding periodically to an asset or debt, usually as a percentage over time.

An audit opinion (usually presented by a CPA) that says that accounting statements as a whole don't present results fairly or don't conform with the generally accepted accounting principles (GAAP) of the United States.

An agreement by which you contract to place ads on another business's Web site and pay that business when a visitor to the business's site clicks through to or purchases something from your site.

A style of men's suit that has two or three buttons, a center-vented jacket with natural shoulders, and pants with a straight line.

The allocation of the cost of an intangible asset over its expected useful life to the business.

The relationship between your business and your brand that forms a single, understandable entity.

All things owned by the business, such as cash, buildings, vehicles, furniture, and any other item that's used to run the business.

A formal, often periodic examination and checking of accounts or financial records to verify their correctness.

1. An equal amount of debits and credits in an account. 2. The remainder in an account when debits are paid.

A record of the financial situation of a business on a particular date that lists the business's assets and the claims against those assets.

A graphical Web advertising unit, usually measuring 468 pixels wide by 60 pixels tall.

A form of online advertising that's similar to direct-mail collateral advertising; anti-spam regulations apply.

1. An interest-bearing certificate issued by a business, promising to pay the holder a specified sum on a specified date. 2. A strong, durable white writing paper of high quality.

1. (noun) A promise about what your business is and what benefits it delivers that gets reinforced every time people come in contact with any facet of your business. 2. (verb) The process of building a positive collection of perceptions in your customers' minds.

A style of men's suit that has a side-vented or unvented jacket with square shoulders and a tapered waist, and pants that are relatively narrow.

A written summary of the positive difference you deliver to all who deal with your business.

A form of marketing that uses high-profile entertainment or news to get people to talk about your brand.

The ratio of your business's debt to assets or equity.

Money spent to replace and improve business facilities, not for operating expenses.

The transfer of funds from a central account to diverse accounts to effect more efficient cash management.

The cash generated by a business's operations to produce and sell its products.

A designation of professional accounting achievement sponsored by the Institute of Management Accountants (IMA), which isn't regulated by the government.

An accountant who has met educational and experience requirements and has passed a national uniform exam to qualify for a state license.

A situation in which a Web user sees your online ad and clicks on it to take him or her directly to your business's Web site.

1. (verb) Capitalizing on the benefits of two compatible brands that present similarly desirable attributes to consumers by combining those brands. 2. (noun) The combined brands of two separate businesses.

A stand-alone advertising vehicle, such as brochures, newsletters, and electronic direct mail.

An employee who works in your business on a temporary basis.

1. A business designed so that customers who purchase from it actually own a portion of the business. 2. An agreement in which many suppliers, manufacturers, and distributors of various major products and goods offer advertising money to their retailers.

The actual words in an advertisement, distinct from the layout, picture, music, and so on.

1. (noun) Protection provided by the government to the creators of original works, giving the owners of the copyright the exclusive right to reproduce the work and protect its use. 2. (verb) To apply government protection to original work you created.

A business structure that establishes the business as a separate legal entity, which protects its owners' personal assets from claims against the business.

A brand that consumers have adopted, taking ownership of that brand, and its product or service.

The characteristics of a population (such as age, gender, income, and so on) collected or used for market research.

To allocate a fixed asset's cost over three or more years, based on its estimated useful life to the business.

A business format in which you sell consumer products or services in a person-to-person manner, away from a specific retail location.

Information provided in a financial report, in addition to the information in the financial statements.

A business that buys products from wholesalers (and sometimes from manufacturers) and resells them to direct-sales organizations, brokers, and dealer.

A form of fraud that involves the illegal use of funds by a person who controls those funds.

All the money and assets invested in a business by its owners.

Based on the religion, culture, and social norms of one's own environment without consideration of the many differences between cultures and ethnicities.

The number of times a consumer has the opportunity to see an advertisement.

A U.S. federal agency whose duty is to investigate unfair methods of competition in business, fraudulent advertising, and so on, and to restrain or prosecute those charged with such practices.

An informal term for the long-lived physical resources used by a business in conducting its operations, which include land, equipment, furniture, and vehicles.

Expenses or costs that remain unchanged over the short run and don't vary with changes in sales volume or sales revenue.

A gathering of customers or prospective customers who share input about a product or marketing idea with a professional moderator who guides the conversation and prompts input.

An agreement in which one business grants another business the right to distribute its products or services.

The authoritative standards and approved accounting methods that businesses in the United States should use when drafting their financial statements.

A currently operating business that's expected to continue to function as such and remain viable for the foreseeable future.

Sales revenue minus the costs of goods sold for a certain period.

To violate the terms of an agreement or disregard others' rights, such as with a copyright or patent.

Any asset a business owns that has value but can't be touched, such as licenses, patents, and trademarks.

A style of men's suit that has an unvented jacket with padded shoulders and relatively full pants.

A debt your business owes, such as vendor bills and bank loans.

A business structure in which has ownership and IRS tax rules similar to that of a sole proprietorship or partnership, but the owners can't be held personally liable if the business is sued.

A product or service that a business sells cheaply or below cost in order to attract customers.

A business's sales revenue minus the cost of goods sold expense and minus all variable expenses; in other words, margin is profit before fixed expenses are deducted.

A written summary of your business's goals and values.

High-quality paper that's slightly smaller than standard-size paper, used for personal business letters, with the employee's name and the business's address printed on it.

The period of time between the acquisition of goods and the revenue resulting from sales and subsequent collections.

A business owned by more than one person in which each partner in the business is equally liable for the activities of the business.

1. (noun) An official document that grants the exclusive right to produce, sell, or get profit from an invention or process for a certain number of years. 2. (verb) To obtain this official document.

A meeting with an employee in which you review that employee's performance over the past period (usually a year) and give feedback.

A discounted rate for ad placement in a newspaper, which newspapers give in return for running the same ad two or more times in the same week.

Sales revenue (and other sources of income) minus expenses (and losses) for a period.

The study of how people use and structure space or spatial arrangements.

All the activities — including employee, community, industry, and government relations; customer and prospect communications; publicity; and even crisis management — that marketers use to build and develop a favorable image of a brand.

A fraudulent direct-selling organization which only recruits distributors — and collects fees from them — without also selling products so that the creators can unlawfully take all the distributors' money.

An audit opinion that states that, except for the effect of a matter to which a qualification relates, the financial statements are fairly presented in accordance with generally accepted accounting principles (GAAP).

A Chinese phrase that means the quality and integrity of a business relationship.

All money collected in the process of selling a business's goods and services.

A wide-ranging U.S. corporate reform legislation act that lays down stringent procedures regarding the accuracy and reliability of corporate disclosures, places restrictions on auditors providing non-audit services, and obliges top executives to verify their accounts personally.

A financial instrument that shows ownership, such as stocks or bonds.

An advertising campaign that encourages immediate sales.

Any unwelcome physical, visual, or verbal sexual advance, or a request for sexual favors, that interferes with the victim's job performance.

Evidence of ownership that represents an equal proportion of a business's capital.

A vertical banner ad.

An ability, such as conflict management or team building, that's defined in terms of expected outcomes rather than as a specific method or technique.

A person who owns a business individually and who is personally liable for the activities of the business.

The ability of a business to pay its liabilities on time.

Evidence (such as a deposit slip or invoice) of a business dealing; critical in constructing an audit trail.

A particular emphasis or slant imparted to information in order to create a desired effect.

A share of a particular publicly traded business, which gives the stockholder a proportionate share in ownership of that business.

A memorable phrase that provides consumers with a quick indication of your business's product, brand, and market position.

An asset owned by the business that can be touched, such as cash, inventory, or vehicles.

A word, phrase, symbol, design, or a combination of these used to identify and distinguish a business and its products or services.

When employees leave a business to work elsewhere.

A detailed disclosure statement that the FTC requires franchisers to provide to the franchisees.

An audit opinion that the auditor may issue only when the business being audited has no identified material weaknesses and the scope of the auditor's work hasn't been restricted.

Official permission to bypass regulations, usually in regards to zoning laws.

Funds invested or available for investment at considerable risk of loss in potentially highly profitable enterprises.

A form of marketing that creates entertaining or informative messages that are designed to be passed along by "wor of mouth," often electronically.

A written definition of your business's long-term aspirations.

A business opportunity in which you buy products directly from manufacturers, mark up the price, and sell them to retailers.

To reduce the book value of an asset, usually because of depreciation or a decline in market value.

How the government regulates the approved uses for land.