Inventory is a current asset because it will be sold during that business year.

Bankrupt: unable to pay one's debts and legally released from the liability.

His business went bankrupt because of poor management and bad financial decisions.

Bills: debts; money which must be paid to someone for a service or product received.

The bill for my telephone service arrives today.

Most suppliers want you to pay the bill within thirty days.

Board of directors: a group of persons elected by stockholders to run a corporation.

The board of directors has decided to pay a dividend of $5 per share. Capital: the money which owners or stockholders invest in a business.

We need some capital in order to purchase new production equip­ment.

Chief executive officer (CEO): the top manager or director of a company.

The board of directors has hired a new chief executive officer tor the corporation.

Comply: obey

The corporation must comply with all the regulations which pertain to it.

Corporation: a group of persons granted a charter to do business as a separate unit with its own rights and responsibilities.

Large businesses are operated as corporations because capital can be easily raised and liability is limited.

Dissolve: to break up a partnership or corporation.

The partnership was dissolved because the two partners wanted to have their own businesses.

Dividends: a share of the profits of a corporation which is given to the stockholders.

The dividend will be paid to owners of record on June 30.

Enterprise: a business, particularly one privately owned.

If the sole proprietor wants to quit, he can simply find someone to purchase his enterprise.

Entity: a separate unit for ownership or legal purposes.

As a separate entity a corporation can own property apart from the individual stockholders.

Equipment: machinery or tools which a business uses for production and operation.

By using new equipment, the company hopes to be able to increase production and reduce costs.

Expertise: special knowledge or ability.

This accountant has expertise in financial planning.

Financial: refers to money or the management of money.

This company is in good financial condition.

The sole proprietor makes all his own financial decisions.

Income tax: a tax which is based on the amount of money a person or company receives for labor, services, or products, and which cannot be added to the price of the labor, services, or products.

The owner of a sole proprietorship pays personal income tax on the profit he receives. The business itself pays no tax.

Inventory: the amount of goods, merchandise, or materials on hand.

Once each year the owners of the store must record all their inventory in order to know which goods they have on hand.

Some new computerized cash registers are able to keep track of inventory.

Liability: (often plural) debt or legal responsibility.

The assets and liabilities of the company must be listed on the balance sheet.

The liability of a corporation is limited to its assets.

The sole proprietor has all the liabilities of his business.

Limited: restricted; not allowed to exceed a certain amount.

A corporation's liability is limited to the value of its assets.

Ownership: refers to a right a person has to things that belong to him.

The ownership of a sole proprietorship can be transferred if the proprietor wants to sell it.