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| Absolute Advantage |
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| The situation in which a country has a monopolistic advantage |
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| Accounting |
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| The process of measuring, interpreting and communicating financial information to enable others both internal and external to make informed decisions |
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| Accounting Equation |
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| The concept upon which financial accounting is based: Assets (value of things owned) + Liabilities (Monies owing ) = Owners Equity (Amounts claimable by the owners) |
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| Accounting Process |
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| The procedural cycle used by accountants to convert individual transactions into accounting statements |
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| Accounts Receivable |
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| Sales to customers on credit, which have not yet been paid. See also Debtors |
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| Acid Test Ratio |
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| A financial ratio, which measures the ability of a firm to meet its current short-term debt. Quick Assets (Debtors, Stock etc) / Current Liabilities (Creditors less than 1 year) The higher the figure for the acid test is, the less likely is a company to suffer rapid decline and possible failure with or without sound managerial skills. This cannot be deduced simply from the sets of figures themselves, hence the need for the Acid test for analytical comfort. An acid test ratio of 2.5:1 is generally considered to be comfortable |
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| Activity Based Costs |
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| A method of costing to apportion costs better by breaking them down into cost drivers, ie. the cost of products based on the underlying drivers. An example would be in customer service where a cost driver might be the cost of communications with the customer; in the costing process this cost would be apportioned on the basis of the expected level of communication with the customer. |
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| Activity Ratio |
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| A financial ratio which measures the effectiveness of a firm’s use of resources |
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| Adaptability |
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| The ability of a business, as a manufacturer or as a service provider, to adjust the products being provided to the market, within the lead times dictated by the shifts that are current in that market. In fact, the measurement of this attribute of a company is complex and includes factors like decision-making, process capability, supply chain performance, as well as the ability of the Board to respond. |
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| Advertising |
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| The broadcast or distribution of information through any media aimed at creating awareness and exposure to a product or service. |
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| Advocacy Advertising |
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| Advertising that supports a specific viewpoint on a public issue and designed to influence public opinion and any legislative processes |
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| Affirmative Action |
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| Programmes that are set up by businesses, which are centred around equal opportunities with regard to jobs for women, ethnic and minority groups |
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| Agency Agreement |
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| A legal relationship between two parties who agree that one of them will act as a representative of another. |
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| Agent |
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| The name of the person who is nominated to act as the representative of the other in an agency agreement |
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| Agent Wholesaler |
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| An independent wholesaler who takes possession of goods for sale but does not hold legal title to them until sold |
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| Analog Computer |
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| A computer that uses continuous data such as pressure, temperature or voltage in scientific and engineering applications |
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| Analytical System |
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| A system in which a raw material is reduced to its component parts in order to extract one or more products |
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| Appellant |
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| A party in a lawsuit (Plaintiff or Defendant) who makes an appeal to a higher court to review a case |
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| Appellate Courts |
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| Courts that hear appeals from the general trial courts |
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| Apprenticeship Training |
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| An employee-training programme designed to transfer skills and knowledge from a mentor through application and hands on experience |
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| Arbitration |
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| The process of bringing an impartial third party, called an arbitrator, into a dispute, to render a binding and legally enforceable decision |
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| Arithmetic Logic Unit |
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| A section of a computer where all the calculations takes place |
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| Array |
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| A categorised list of items in ascending or descending order which can be used as a data source for processing further information or as a source of general information itself |
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| Artificial Intelligence |
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| A branch of computer science devoted to the study of computers to solve problems though innovation, abstract reasoning, imagination and common sense, which are currently solved by humans |
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| Assembly Line |
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| The process of placing products on a conveying system, which facilitates the manufacture of a product as it passes through several workstations. The process intervention may be automated or manually applied by process workers. |
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| Assessment Centre |
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| A testing centre for job applicants who have usually been short-listed for a job position designed to determine the best applicant and facilitate decision-making through simulation techniques. See also Psychometrics |
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| Asset Management |
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| A system used by a company for managing its assets; these may include physical assets as well as intellectual property |
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| Assets |
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| The range of items both tangible and intangible that are considered to have value in and are owned by the business. |
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| Atmospherics |
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| The image, amenities and impression of a retail environment that influence shoppers’ behaviour |
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| Authority |
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| The power to act and make decisions in performing duties and carrying out assignments |
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| Autocratic |
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| A style of leadership where the leader makes unilateral decisions without consulting others |
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| Automatic Teller Machine (ATM) |
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| An electronic banking device with 24 hours access availability, which allows bank account holders to make cash deposits, withdrawals and transfers through the use if a credit or debit card. |
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| Automation |
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| The performance of activities or processes using machinery that require little or no human intervention |
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| Balance of Payments |
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| The net flow of money into or out of a country which influences the balance of trade and is affected by additional factors such as military expenditure, overseas investment and foreign aid |
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| Balance of Trade |
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| The flow of money coming in and going out of a country through importing and exporting of products and services |
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| Balance Sheet |
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| A statement of the financial position of a company at a given date |
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| Bankruptcy |
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| A legal condition of an individual whereby the person is unable to fulfil the payment obligations of his or her debtors. |
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| Base Rate |
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| The rate of interest set by the Bank of England, which is used as a base parameter for rates charged by commercial banks for short-term loans to major business firms with high credit standing. See also Prime Interest Rate. |
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| Batch Processing |
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| A method of collecting and scheduling data for computer processing over a given time period |
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| Bears |
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| Investors who expect the stocks and share prices to decline and sell the securities in expectation of declining market prices. See also Bulls |
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| Bill of Materials |
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| A detailed listing of parts and materials needed to produce a product or service |
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| Binary Arithmetic |
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| A method of counting using the digits 0 and 1 |
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| Binary Number |
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| Zero (0) or 1 |
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| Bit |
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| A binary digit 0 or 1. See also Byte |
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| Blue-Collar |
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| The term used to operative employees in a manufacturing organisation |
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| Board of Directors |
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| The governing authority of the company or institution elected by its members or shareholders |
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| Bond |
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| A certificate of indebtedness sold to raise long-term funds for corporations or government agencies |
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| Bonus |
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| An addition to a salary based on a scheme of reward for excellent performance |
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| Book Value |
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| The purchase cost or value of an asset less its depreciation |
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| Bottom Line |
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| The overall profit or loss of a company |
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| Boycott |
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| An attempt to keep people from purchasing goods and services from a company |
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| Brand |
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| A name, term, sign, symbol, design or some combination used to identify a company’s products or service and differentiate it from competitors’ similar products |
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| Brand Name |
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| A part of the brand which consists of words and letters which, make up the name of a company’s product or service that differentiates it from competitors’ similar products |
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| Brand Preference |
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| The stage of brand loyalty at which the consumer will be loyal to the brand as long as the brand is available |
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| Brand Recognition |
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| The stage of brand loyalty at which the consumer becomes familiar with the product or service offering |
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| Breach of Contract |
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| Violation of a valid contract by a party or parties the contract |
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| Breakeven Analysis |
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| The method of determining the breakeven point, which identifies the sufficient sales level required to cover the fixed and variable cost outlays of the company at a certain price point |
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| Breakeven Point |
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| The sales level at which the amount of revenue generated is sufficient to cover the fixed and variable cost outlays of the company at a certain price point |
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| Budget |
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| The financial blue print of a company for a future time period that reflects expected sales revenues, cash flows, operating costs and profits; and used as a planning and monitoring tool |
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| Bulls |
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| Investors who expect stock and share prices to rise and buy securities in anticipation of increased market prices – see also Bears |
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| Burglary Insurance |
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| Insurance coverage for losses of property incurred by thieves using forced entry or other forcible means |
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| Business |
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| An enterprise primarily structured for profit, but includes non-profit institutions that provide goods and services to an economic system fulfilling the needs of a market |
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| Business Critical Mass |
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| A measure of the size that a business needs to attain in order to achieve financial stability in its current market. Once at this level, the business will have developed sufficient market share and acceptance to be resilient to unforeseen normal market fluctuations. |
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| Business Interruption Insurance |
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| A type of insurance designed to cover losses resulting from temporary closure of the business as a result of fire or other specified property damage; typically purchased as an additional provision to normal fire insurance |
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| Business Law |
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| The aspects of law that most directly and specifically influence and regulate the management of various types of business activities |
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| Business Resilience |
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| A measure of the capability of the company to survive financially under conditions brought about by market forces which create the need for the business to remodel restructure or reassess its strategies |
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| Buyer’s Market |
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| A market condition characterised by an adequate or excess supply of a particular good or service |
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| Byte |
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| A character of data made up of bits to form an alpha or numeric character. See also Bit |
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| Callable Bonds |
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| Bonds that have provisions, which allow the issuing company to redeem them prior to maturity usually at a premium. See also Bonds |
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| Canned Sales Presentation |
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| A stereotyped sales talk designed to provide all the information that a prospect needs to make a sales decision. See also Prospect |
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| Capability Chain |
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| A measure of the capability of the supply network, as identified by the client company, to respond to shifts in the market that is being supplied. |
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| Capital |
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| The necessary funds required to finance the operation of a business |
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| Capital Items |
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| Those items purchased with capital funds that are required by a company to manufacture or produce a product or service. The items are usual designated to be over a certain value for accounting purposes and are generally identified as having some long term application and value |
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| Capitalism |
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| The economic system founded on the principle that competition among business institutions best serves the needs of society |
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| Cartel |
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| A conglomeration of business institutions designed to control the markets in which they participate so that they maintain a monopolistic position. Illegal in some countries. |
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| Cash Surrender Value |
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| The savings portion of a life insurance policy that can be borrowed by the policyholder at low interest rates or paid to the policyholder upon termination of a policy |
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| Census |
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| A primary data survey in which all possible data sources are contacted |
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| Central Processing Unit (CPU) |
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| The heart of a computer system, which contains the memory storage, arithmetic logic unit and the control unit |
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| Centralisation |
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| The style of business management whereby many activities arew coordinated and managed from a central point eg Head Office. Branches are not given powers to manage or control certain activities |
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| Certified Management Accountant (CMA) |
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| An accountant who has met specific educational and professional requirements and has passed appropriate examinations laid down by an authorised examining institution allowing him or her to perform management accounting activities for business organisations, but not the public |
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| Certified Public Accountant (CPA) |
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| An accountant who has met specific educational and professional requirements and has passed appropriate examinations laid down by an authorised examining institution allowing him to carry out accountancy work for the public and business organisations |
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| Chain Cell |
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| A measure of the extent to which business cell teams or units have developed in the network of supply. |
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| Chain Information Transfer |
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| The extent to which information is disseminated and shared between members of the same supply network. |
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| Chain Product Development |
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| The mechanism, and its level of maturity, for product development through the supply network to provide a response to the market. |
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| Chain Quality |
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| A measure of the ability of the supply network to control quality attributes relating to product, service, timing, contingencies, tolerances, and market response. |
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| Closed Loop |
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| The measure of controls at business, process and manufacturing environment that operate with feedback systems to ensure planned activities are achievable. |
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| Closed Shop |
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| A place of employment in which management cannot hire non-union workers |
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| Coaching |
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| A management development programme designed to transfer the skills and develop experience from a mentor |
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| Collective Bargaining |
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| A process of negotiation between management and union representatives for the purpose of arriving at a mutually acceptable wage level and conditions for employees |
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| Commercial Bank |
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| A profit making business which holds deposits of individuals and businesses in the form of cheque or savings accounts and uses those funds to make loans to other businesses and individuals |
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| Commercial Finance Company |
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| A financial institution that supplies short-term funds to business borrowers who pledge security against non-payment in the form of tangible items such as debtors, stock, property, machinery etc. |
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| Commercial Paper |
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| A short-term note issued by a major corporation with high credit standing and backed solely by the reputation of the issuing firm |
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| Common Carrier |
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| A transportation company that performs logistical services for a business or individual but has limited liability regarding the value of the goods carried |
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| Common Law |
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| The body of law arising out of judicial decisions related to the unwritten law which operates throughout England and inherited by other countries |
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| Common Market |
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| A basic format for economic integration that maintains a customs union and seeks uniformity and consistency across the government trade rules of its members |
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| Common Stock |
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| Stocks or shares whereby the owners have only a residual claim to the firm’s assets, after preferential stockholders and creditors have been paid, but who have voting rights in the corporation |
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| Communism |
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| An economic theory developed by Karl Marx under which private property is eliminated and goods are owned in common |
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| Comparative Advantage |
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| A country’s ability to supply a good or service more efficiently and at a lower cost than other goods and services |
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| Competition |
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| The race for supremacy among businesses who share the same market with similar products |
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| Compressed Workweek |
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| A work-scheduling practice where workers work the specified number hours across a period of less than a week |
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| Compulsory Arbitration |
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| A arbitration process which union and management are summoned to a compulsory meeting often required by a third party |
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| Computer Chip |
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| A small electronic component, which maintains microscopic integrated circuitry and provides processing logic for the transmission of data |
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| Computer Program |
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| A set of instructions that tells the computer what is to be done, how and when to do it and the sequence of steps it must take |
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| Computer Programmer |
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| A specialist who writes the computer programs which are based on an analysis of the problem, a breakdown of its component parts and an outline of the steps to be taken to provide a solution |
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| Conceptual Skills |
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| The ability of a person to view a situation as unified whole whilst understanding its component parts and how they interact and integrate with each other |
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| Concurrency |
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| A measure of the ability of the organisation, and its supply network where appropriate, to perform tasks at the same time in the development of products and services that are being brought to the market, eg. the ability to develop a product, its packaging, and its marketing programme at the same time. |
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| Conglomerate |
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| A corporation, which has grown through merger or acquisition of other corporations, and which are unrelated in their strategies and types of business |
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| Consent Order |
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| An order under which an accused firm agrees voluntarily to cease conduct, which the Government considers or alleges to be inappropriate |
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| Consideration |
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| The value or benefit that each party renders to the other to satisfy a contractual condition to make to valid and enforceable |
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| Consumer Behaviour |
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| The acts of individuals who acquire and use goods and services in an economic system |
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| Consumer Finance Company |
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| A financial institution that supplies short-term finance to borrowers for the acquisition of consumer goods. Sometimes security may be required and pledged in the form og tangible items that are owned by the person requiring the funds |
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| Consumer Goods |
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| Products and services acquired but the ultimate consumer or4 end user for their own use |
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| Consumer Price Index |
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| A government measurement of a “basket of goods” designed to represent the average price changes for selected products and services from month to month which are used as economic indicators of the shifts that occur in an economic system |
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| Contingency |
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| A provision made during a planning process to estimate or accommodate unforeseen events and expenditure. Used in budgeting and forecasting and especially in the development on new products and services |
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| Continuous Process |
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| A manufacturing operation in which long production runs turn out finished products over a specified period of time |
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| Contract |
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| A legally enforceable agreement between two or more parties regarding a specific act or thing |
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| Contract Carrier |
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| A transportation company that carries goods for hire and reward by individual contract or agreement and not for the general public. Their services tend to meet the special needs of customers |
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| Contract Law |
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| The Legal foundation on which normal business dealings are made |
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| Control Focus |
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| The focus applied by management in a particular area to ensure that objectives are met eg Quality Assurance methods |
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| Control Unit |
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| The part of a computer responsible for directing the sequence of operations, interpreting coded instructions and guiding the computer |
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| Controlling |
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| A management function involved with evaluating the performance of an organisation to determine whether or not it is accomplishing its objectives |
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| Convenience Goods |
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| Products that consumers seek to purchase frequently, immediately and with minimum effort |
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| Convertible Bonds |
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| Bonds that offer the option of being converted in to a specific number of ordinary shares or common stock |
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| Cooling-Off Period |
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| A specified period in a contractual agreement which allows the one or both parties to withdraw from the contract without any recourse or claim against the other |
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| Cooperative |
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| An organisation whose owners band together to operate collectively all or part of their company or industry |
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| Cooperative Advertising |
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| A sharing of advertising costs for a product or service or range of products between the manufacturer and/or wholesaler and retailer |
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| Copyright |
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| The protection of an individual’s exclusive right to materials such as books, photos, works of art, songs |
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| Corporate Advertising |
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| The promotion of a concept, idea, philosophy, or the good will of an industry, business enterprise or government entity |
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| Corporation |
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| An association of persons created by statute as a legal entity with authority to act and have liability separate and apart from its owners |
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| Correlation Analysis |
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| A statistical technical used to measure the relationship between two or more variables which can be positive, negative or non-existent |
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| Costing |
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| The ability of the organisation to identify the costs of its business activities. |
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| Countertrade |
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| Used in international bartering agreements, which requires the seller to reciprocate a purchase with the buyer |
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| Coupons |
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| A type of sales promotion that uses advertising inserts or package inclusions that are redeemable for cash and offer purchase discounts |
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| Craft Union |
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| A labour union consisting of skilled workers in a specific craft or trade |
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| Creative Selling |
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| A persuasive type of promotional presentation used when the benefits of the product are not readily apparent and/or its purchase requires the analysis of alternatives |
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| Credit |
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| A bookkeeping entry which records the decrease in an asset or an increase of a liability, or an increase in owner’s equity |
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| Credit Card |
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| A small plastic card used in place of cash to acquire goods and services from a seller whereby the Bank who issues the card allows the buyer an extended period of time in which to pay for the goods |
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| Credit Insurance |
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| Insurance designed to protect lenders against losses caused by the insolvency of customers to whom credit has been extended |
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| Credit Union |
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| A member-owned financial cooperative that pays interest to member depositors, offers share draft accounts, offers short-term loans and some mortgage loans to its members |
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| Critical Path |
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| The sequence of operations in a PERT of GANTT chart, which requires the longest time for completion. If a task on the critical path is delayed then the completion time of the whole project is also delayed |
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| Currency |
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| A tangible component of money supply (coins and paper) which enable transactions to take place |
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| Current Assets |
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| Items of value specified on a balance sheet that can or will be converted into cash within one year. eg cash, stock, debtors |
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| Current Liabilities |
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| Claims by creditors that are usually paid within one year |
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| Current Ratio |
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| A financial ratio that measures the company’s ability to pay its current debts as they mature. Calculation: Current Assets / Current Liabilities. A ratio of .75 would be in the danger zone. Ideally the ratio should be 1 to 1.5 or higher |
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