What is a Proprietor? Definition: A proprietor is a person who creates and runs a business intending to make consistent profit from the business activities of that business. That is why such a business is usually described as a sole proprietorship. A sole proprietorship can thus be described as a single, unincorporated business operation that
What is a Purchase Requisition? Definition: Purchase requisition is a form that departments in big organizations fill to indicate they wish to purchase some materials or merchandise. The requisition form notifies relevant authorities, more so purchasing departments, that some materials or merchandise are needed for the smooth running of a given department. Understanding Purchase Requisition
What is a Production Budget? Definition: Production budget is a budgetary plan that details the total number of products that will be manufactured over a given period along with the costs. The plan is derived from sales forecast as it is an estimate of the total units a production plant intends to produce. A production
What Are Product Costs? Definition: Product cost is a term used to denote the total costs or expenses necessary to produce a good. The costs, in this case, can be direct labor costs, raw material costs as well as factory overhead costs. These costs are essential if a factory or a manufacturer is to turn
What Is Vouching? Definition: Vouching is a technique that auditors use to establish the accuracy of transactions that an accountant recorded in a company’s books of account. Since the goal of auditing to verify that the information in the books of account is true, then vouching is simply the essence of the whole task. The
What is Unlimited Liability? Definition: Unlimited liability refers to the uncapped responsibility of business owners to cover the liabilities of a business. A business owner of a sole proprietorship or a general partner of a partnership has the obligation to cover the liabilities of the business in case the business runs out of money. By
What is a Trade Discount? Definition: Trade discount in the business world is a common term that is used to describe the price reduction that a manufacturer is usually willing to give to wholesalers. It is a discount that lowers the price from the initial price at which the manufacturer is willing to supply its
What is Throughput Time? Definition: Throughput is also called flow rate and it is the data amount that is transferable from point A to point B in a specific amount of time. It is thus used to measure the inputs and outputs moving through the production process. Companies use throughput as a metric to identify
What is Tax Evasion? Definition: Tax evasion is where businesses and individuals use illegal practices through which they avoid fulfilling their tax obligations. Every country that has an elaborate economic system and governance system requires its working citizens and businesses to pay tax. The tax money is then used to fund government activities such as
What Is Tax Law? Definition: The tax law is a set of regulatory guidelines that have been created to provide a structure for tax collection. Every country has an economy that is guided by the country’s government and each government has a budget which it funds mainly through the tax law. Taxes are a natural