Business Law Terms and Definitions

Bookkeeping The act of keeping a systematic account of financial transactions. Breakeven analysis The point at which the business will neither make a profit nor lose money and where revenues equal expenses. Factoring A method of raising working capital by selling your business's accounts receivables to a bank at a discounted rate. The bank then manages and collects the money due. Employment Taxes All employers are required to withhold certain taxes from employee's wages, including: Federal Income Tax,Social Security and Medicare Taxes (FICA),Federal Unemployment (FUTA) Taxes Profit Profit the excess of revenues over expenses. Cash disbursements Cash disbursements money paid out by the business owner for goods and services received. Cash flow Measure of how well a business manages its inflows and outflows of cash for a given period of time. It shows the borrower's ability to repay the loan. Costs Money obligated for goods and services received during a given period of time, regardless of when ordered or whether paid for. Accounts Payable A liability arising when a vendor provides goods or services that are not immediately paid for and where the liability is not formalized in writing but backed by the reputation and credit worthiness of the debtor. Annual Budget For an existing business, this is a realistic budget for the current fiscal year based on past income and expenditures. It includes anticipated changes in income and spending that may occur during the year.

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	Did You Know?
	Annual Budgets are a component in small business For an existing business, this is a realistic budget for the current fiscal year based on past income and expenditures. It includes anticipated changes in income and spending that may occur during the year. For a start-up business, this is a realistic projection of the income and costs of doing business for a year.