Business Law Terms and Definitions

Current liabilities Current liabilities debts that must be repaid in one year or less. Balance sheet Statement, which gives a picture of the business position at a given point in time. It shows what a business owns (assets) and what the business owes (liabilities). Accounting Method Any number of approaches for calculating the income of an entity. Usually applied to the general means of recognizing income and expenses, e.g., cash or accrual. But it can also apply to method of keeping inventories, etc. Articles of Incorporation Legal document filed with the state, which sets forth the purposes and regulations for a corporation. Each state may have different rules/requirements. First Degree of Consanguinity A near relative of an employer who is exempt from Worker's Compensation coverage. For more information, see Worker's Compensation exemptions. 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 Equity Business owners investment in the company. Equity investment Equity investment the cash that business owners invest in the business. Profit Profit the excess of revenues over expenses. Accountant Accountant one whose work is keeping or examining accounts or business records.

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	Did You Know?
	Torts relate to business activities Tort is an area of the law concerned with injuries to people or property that come about because of a breach of a duty imposed by the law rather than by some contractual arrangement between people. Individual torts include trespass, defamation, nuisance, negligence and passing off. Each tort has its own rules.