REFERENCE CHANNELS

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H  I  J  K  L  M  N  

H

Hardware:  A computer and associated physical equipment (as opposed to "software").

Hard Disk (or Hard Drive): The "file cabinet" of the machine. This is the memory that your computer will use to store the results from the programs (and to store those programs). Hard Disk is currently specified in Gigabytes (billions of characters). Single disk drives are currently from 6 Gigabytes to 40 Gigabytes, and you can usually have more than one disk drive in your computer (but, if this is your first computer, stick with just one drive).

I

Internal Control:  Policies and procedures designed to provide reasonable assurance that a company's objectives will be achieved. It consists of control environment, risk assessment, control activities, information and communications and monitoring. (That which you need to exercise to avoid kicking the idiot in front of you who desperately deserves it.)

Interest:  The cost of the use of money.

Interest Rate:  The cost of money expressed as an annual percentage.

Inventory:  Goods held for sale or resale.

Inventory Turnover Ratio:  A measure of the management of inventory computed by dividing cost of goods sold (COGS) by the average inventory for a period of time.

Invoice:  An itemized list of goods shipped or services rendered with cost.

J

Journal:  A book or original entry in a double-entry bookkeeping system. The journal lists all transactions and indicates the accounts to which they are posted.

Journal Entry:  A recording of a transaction where debits equal credits.

Just-in-time Inventory:  An inventory system that minimizes inventory costs. It arranges for suppliers to deliver small quantities of raw materials just before those units are needed in production. Storing, insuring, and handling raw materials are costs that add no value to the product, and so are minimized in a just in time system.

K

Kiting:  Drawing a bank check on insufficient funds to take advantage of the lag time (time interval) required for collection. Certainly not ethical, and under some circumstances very illegal!

L

Laptop Computer: A computer designed specifically to operate without being plugged into a wall for power. These are commonly used by business people who are an the road a lot. Expect a laptop computer to cost 50% - 200% more than an equivalent desktop computer. See also Palmtop Computer.

Leases:  Long-term non-cancelable commitments. In a lease, the lessee acquires the right to use property owned by the lessor. Even though no legal transfer of title occurs, many leases transfer substantially all the risks and ownership benefits.

LIFO:  "Last In First Out" assumption of inventory valuation.

Limited Liability:  The legal protection given to stockholders of a corporation. A stockholder's liability extends only to the total of his capital contribution.

Limited Partnership:  A limited partnership is one in which one or more partners (but not all) have limited liability up to their investment to creditors in the event of the failure of the business. The general partner manages the business. Limited partners are not involved in daily activities.

Liquidation:  The process of dissolving a business by selling the assets, paying the debts, and distributing the remaining equity to the owners.

Liquidity:  The availability of cash or ability to obtain it quickly. Also used to determine debt repayment ability

Long-term Liabilities:  These a liabilities in your business that are due in more than one year. For example mortgage payable.

Lower Cost or Market:  LCM. A method of valuing assets at the lower of its original cost or current market value.

M

Memory: See RAM

Minimum Wage:  The lowest compensation you are allowed to pay an employee for hourly work. It is defined by Federal and state laws. State laws may be more restrictive than Federal law, and certainly may differ.

Modem: A device used to connect your computer to other computers by using telephone lines. Modems are rated at their transfer rate (rated in Kilobytes per second (KBPS)). Current designs are 28.8 KBPS, 33.6 KBPS, and 56 KBPS. While faster may seem better, the higher speed is only available when a very good connection is made between your computer and the one you are calling. Most modems sold today are 56 KBPS, and automatically slow down for poor phone connections.

Modified Accrual:  An accounting method that is a combination of cash and accrual basis. Recognition is given to revenue when it is available and measurable. Expenditures are usually reflected in the accounting period in which the liability is incurred.

Monitor: See Video Monitor.

Mouse: A small pod-shaped device used to move the "pointer" or cursor on your screen. A variation of this device is a "rollerball", which has a small ball inset on the top of the device; the user moves the cursor by moving the ball around, usually with one's thumb.

Mutual Agency:  The right of all partners in a partnership to act as agents for the normal business operations of the partnership, with the authority to bind it to business agreements.

N

Net Assets:  Owners Equity. The ownership interest in the assets of an entity. Total assets minus Total liabilities.

Net Income:  The difference between your business' total revenues and its total expenses. This caption and amount is usually found at the bottom of a company Income Statement (also known as "The Bottom Line").

Net Operating Loss:  A net operating loss results when business expenses exceed business income for the operating period.

Nonprofit Organization:  An entity without a profit objective, oriented toward providing services efficiently and effectively.

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