OSAT Business Education key terms

A bookkeeping system in which every transaction is recorded in at least two accounts, with total debits equaling total credits, so that the accounting equation stays balanced and errors are easier to detect.

The fundamental relationship stating that assets equal liabilities plus owners' equity. Every recorded transaction changes at least two elements while keeping this equality intact, which underpins the balance sheet.

The initial record of a business transaction showing the date, affected accounts, amounts debited and credited, and a brief explanation. Entries are later posted to ledger accounts.

A listing of all ledger account balances at a point in time, used to verify that total debits equal total credits before preparing financial statements. It does not catch every type of error.

A financial statement reporting assets, liabilities, and owners' equity at a specific date. It shows what a business owns, owes, and is worth at that moment.

A financial statement summarizing revenues, expenses, and the resulting net income or loss over a period. It measures profitability rather than financial position at a point in time.

An accounting method that records revenue when earned and expenses when incurred, regardless of when cash changes hands. It gives a more accurate picture of performance than cash basis.

The guideline that expenses should be recorded in the same period as the revenues they helped generate. It supports accrual accounting and accurate period-by-period profit measurement.

The systematic allocation of a long-lived asset's cost to expense over its useful life. It reflects wear, obsolescence, and use rather than a market valuation of the asset.

Policies and procedures designed to safeguard assets, ensure reliable financial reporting, and promote compliance with laws. Examples include segregation of duties and required approvals.

An internal control practice of dividing tasks so that no single person controls all stages of a transaction. It reduces the risk of errors and fraud going undetected.

The sales volume at which total revenue equals total costs, producing neither profit nor loss. It is calculated by dividing fixed costs by the contribution margin per unit.

The amount remaining from sales revenue after variable costs are subtracted. It contributes toward covering fixed costs and then generating profit, and is often expressed per unit or as a ratio.

Expenses that stay roughly constant in total regardless of changes in activity level within a relevant range, such as rent or salaried management. They are not zero when production stops.

Expenses that change in total in direct proportion to changes in activity volume, such as raw materials or sales commissions. Per-unit variable cost is assumed constant within a relevant range.

The economic model in which price is determined by the interaction of how much buyers want and how much sellers offer. Shifts in either curve change equilibrium price and quantity.

A measure of how responsive quantity demanded is to a change in price. Demand is elastic when quantity changes proportionally more than price, and inelastic when it changes less.

The price and quantity at which the quantity buyers want equals the quantity sellers offer. At this point there is no inherent pressure for price to rise or fall.

The value of the next best alternative given up when a choice is made. It is central to economic reasoning about scarcity and to sound personal and business decision making.

The condition in which human wants exceed the limited resources available to satisfy them. It forces individuals, businesses, and governments to make choices with trade-offs.

The coordinated set of controllable elements a firm uses to reach its target market, commonly described as product, price, place, and promotion. Decisions in one element affect the others.

Dividing a broad market into smaller groups of buyers with similar needs, traits, or behaviors so that marketing efforts can be tailored. Common bases include demographic, geographic, psychographic, and behavioral.

The specific group of consumers a business chooses to serve with its product and marketing efforts. Selecting it guides decisions about positioning, pricing, and promotional channels.

The stages a product passes through over time: introduction, growth, maturity, and decline. Marketing strategies and pricing typically change at each stage.

The added value a brand name gives to a product beyond its functional benefits, reflected in customer loyalty, recognition, and willingness to pay more. It is built through consistent positioning.

A legally enforceable agreement between parties that generally requires an offer, acceptance, consideration, and mutual intent. Some contracts must also be in writing to be enforceable.

Something of legal value exchanged by each party to a contract, such as money, goods, or a promise. Without it, an agreement is typically not enforceable as a contract.

Failure to perform a contractual duty without a legal excuse. The non-breaching party may seek remedies such as damages, specific performance, or cancellation of the agreement.

A civil wrong, other than breach of contract, that causes harm and leads to legal liability, such as negligence or defamation. Remedies usually involve money damages.

A failure to exercise the degree of care a reasonable person would under similar circumstances, resulting in harm. It generally requires duty, breach, causation, and damages.

The legal structures available for organizing a business, such as sole proprietorship, partnership, corporation, and limited liability company. Each differs in liability, taxation, and management.

A legal protection in which owners are generally not personally responsible for the debts and obligations of the business beyond their investment. It is a key advantage of corporations and LLCs.

The process of identifying an opportunity, assembling resources, and taking on risk to create and grow a new venture. It involves innovation, planning, and adapting to market feedback.

A written document describing a venture's concept, target market, operations, marketing strategy, management, and financial projections. It guides the founders and is used to attract financing.

A decision tool that compares the expected costs of an action with its expected benefits, often in monetary terms. It helps justify choices among alternatives with limited resources.

An independent examination of financial records and controls to determine whether statements are fairly presented and procedures are followed. Internal and external audits serve different purposes.

The ability to find, evaluate, create, and communicate information using digital tools responsibly. In business education it includes productivity software, online collaboration, and data privacy awareness.

Using spreadsheet software to organize data, apply formulas, and build what-if scenarios for business decisions. It supports budgeting, forecasting, and financial analysis.

Buying and selling goods or services over electronic networks, including online stores and marketplaces. It raises distinct issues in payment security, shipping, and consumer protection.