encyclopedia of business and finance (ed 2, thomson gale, 2006) (0028660617)

Encyclopedia of Business and Finance
SECOND EDITION
eobfv1fm 7/5/06 3:07 PM Page I
Editorial Board
II
EDITOR IN CHIEF
Burton S. Kaliski
Southern New Hampshire University, retired
ASSOCIATE EDITORS
G. W. Maxwell
San Jose State University, retired
Dorothy A. Maxwell
Sacopee Valley High School
Mary Ellen Oliverio
Pace University
Allen D. Truell
Ball State University
eobfv1fm 7/5/06 3:07 PM Page II
Encyclopedia of Business and Finance
SECOND EDITION
VOLUME 1
A–I
Burton S. Kaliski
EDITOR IN CHIEF
eobfv1fm 7/5/06 3:07 PM Page III
Encyclopedia of Business and Finance
SECOND EDITION
VOLUME 2
J–Z
Burton S. Kaliski

EDITOR IN CHIEF
eobfv2fm 7/5/06 3:08 PM Page III
Encyclopedia of Business and Finance, Second Edition
Burton S. Kaliski, Editor in Chief
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LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA
Encyclopedia of business and finance / Burton S. Kaliski, editor-in-chief.— 2nd ed.

p. cm.
Includes bibliographical references and index.
ISBN 0-02-866061-7 (set hardcover : alk. paper) — ISBN 0-02-866062-5 (volume 1 : alk.
paper) — ISBN 0-02-866063-3 (volume 2 : alk. paper)
1. Business—Encyclopedias. 2. Commerce—Encyclopedias. 3. Finance—Encyclopedias. 4.
North America—Commerce—Encyclopedias. 5. Finance—North America—Encyclopedias. I.
Kaliski, Burton S. II. Macmillan Reference USA.
HF1001.E466 2007
650.03—dc22 2006005185
eobfv1fm 7/5/06 3:07 PM Page IV
Contents
V
VOLUME 1
Preface VII
List of Articles IX
Contributors XV
ENCYCLOPEDIA OF BUSINESS AND
FINANCE
A-I
1
VOLUME 2
ENCYCLOPEDIA OF BUSINESS AND
FINANCE
J-Z
441
Index 779
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Editorial and Production Staff
PROJECT EDITOR
Miranda H. Ferrara

EDITORIAL SYSTEMS
IMPLEMENTATION SPECIALISTS
Luann Brennan
Mike Weaver
MANUSCRIPT EDITORS
Heidi H. Denler
Amy L. Unterburger
PROOFREADERS
Heidi H. Denler
John K. Krol
Gina Misiroglu
INDEXER
Barbara A. Koch
PRODUCT DESIGN
Jennifer Wahi
Tracey Rowens
IMAGING
Dean Dauphinais
Lezlie Light
GRAPHIC ART
Christine O’Bryan
RIGHTS ACQUISITION AND
MANAGEMENT
Margaret Abendroth
Margaret Chamberlain-Gaston
COMPOSITION
Evi Seoud
Mary Beth Trimper
COMPOSITOR
Datapage Technologies International

MANUFACTURING
Rhonda Dover
PRODUCT MANAGER
Jennifer Bernardelli
eobfv1fm 7/5/06 3:07 PM Page VI
Preface
VII
Business is the backbone of American society and is one of the keys to making our system
work as well as it has for over two hundred years. Yet as a body of knowledge, business is
much younger, and in its brief history, there have been few attempts to present the disci-
pline of business in a single place. The major purpose of the Encyclopedia of Business and
Finance, Second Edition is to summarize the body of knowledge that we know as business in
one place and in language appropriate to the layperson.
This two-volume collection of over 315 articles presents a wealth of information about
the major functional areas of business: accounting, economics, finance, information sys-
tems, law, management, and marketing. Articles vary in length and depth, in bibliographic
support, and in writing style. Thus, the reader will encounter a variety of approaches to and
perspectives about business. Some articles are quantitative, since some aspects of business
are numerically based. Other articles tend more toward the qualitative to accommodate the
more descriptive aspects of business. Some of the articles present an historical perspective,
incorporating long-validated knowledge, while other articles focus on current concepts and
more recent data. Other articles provide “how-to” advice. Regardless of the approach, avail-
able data are accurate to the best of each writer’s knowledge as of 2006. All articles have the
same goal: to provide useful knowledge about the business and financial world.
Because of their importance, special treatment has been given to two subject areas:
careers and ethics. In each area, an overview article is followed by an article about that topic
in each functional area of business. Thus, there are articles about careers in accounting,
careers in economics, and so forth. There is a similiar series of articles about ethics.
There is also a strong emphasis on organizations in the fields of business and govern-
ment. Wherever an organization is discussed, the article provides contact information about

it, including a Web site.
Relevant business-related federal legislation is included in this work. Articles on all acts
that have had a major impact on business and the government agencies that regulate them
are included in the Encyclopedia.
Encyclopedia of Business and Finance, Second Edition includes 32 new articles. The major
areas of these new contributions are in the applications of technology to business (such as
cyber crime, e-marketing, identity theft, and online education), new areas of business
knowledge (including agency theory, earnings management, forensic accounting, green
eobfv1fm 7/5/06 3:07 PM Page VII
VIII ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
PREFACE
marketing, intellectual capital, and social marketing), international topics (such as interna-
tional business and international marketing), and new organizations and legislation. Fur-
ther, all articles in the Encyclopedia have been thoroughly reviewed and updated in content
and references to 2006.
Entries are arranged in alphabetical order. The Encyclopedia includes extensive cross-
referencing of two types: “See” and “See Also” references. “See” references fall within the
body of the work and refer the reader to articles diuscussing that topic. For example, if one
wanted to find information about bait-and-switch advertising and looked under “Bait and
Switch,” there would not be an article, but rather the instruction to “
SEE Ethics in Market-
ing; Ethics in Law for Business; Government Role in Business.” “See Also” cross-references fall
at the end of articles and direct the reader to one or more other articles that may shed more
light on the topic. At the conclusion of the article on Insurance, for example, you will find
“S
EE ALSO Investments; Personal Financial Planning.” At the end of Volume 2, there is an
extensive Index to terms and concept in the articles.
Is the knowledge contained in this work the definitive and final word on each topic?
The answer is “most certainly not!” In this day and age of dynamic and rapidly growing
knowledge, a positive answer would be quite inappropriate. However, this is not necessarily

a negative. The information contained in this edition of Encyclopedia of Business and Finance
is valid and reliable and enables readers to do further research by going to easily accessible
sources. Today’s technology offers a unique opportunity to extend one’s knowledge of every
topic presented, an opportunity not available so easily to previous generations.
This work was designed for different types of users. The middle school student may be
looking for a starting point for a paper on careers. The high school student may be seeking
background information on a major research topic, such as international trade. The busi-
nessperson may be seeking a summary of antitrust laws. The business teacher may be
preparing a lesson on the history of computing. The interested layperson may simply want
to learn something new about such topics as the No Child Left Behind legislation or invest-
ments.
Encyclopedia of Business and Finance, Second Edition can serve as a survey document for
the many aspects of business or as a guide to those aspects. It can be the starting point for
a lengthy secondary research project, or the ending point for a specific item covered within
its pages. It can be used to help ask questions or to find answers. It can be used as a sum-
mary of existing knowledge or the basis for acquiring new knowledge.
A number of individuals deserve special mention for their contributions to this project.
First I must thank the four associate editors: Dorothy Maxwell, Jim Maxwell, Mary Ellen
Oliverio, and Allen Truell. Without their tireless efforts at securing quality writers, we
would have a very small work. Second, great appreciation goes to Miranda Ferrara, the edi-
tor at Macmillan Reference USA/Thomson Gale in charge of this project, for her organiza-
tion, efficiency, and human kindness throughout this entire project. In addition special
thanks go to Mike Weaver and Luann Brennan also at Thomson Gale, who handled many
of the technical details of the Encyclopedia. Lastly, I must thank all of the contributors for
the best effort that each put forth to codify and record knowledge in each article. Writing
for an encyclopedia is hardly a financially rewarding activity; however, it is a contribution
to posterity, so what each contributor has written is of great value to current and future
scholars. And, speaking for all of us, thanks to our families for their encouragement and
support.
Burton S. Kaliski

eobfv1fm 7/5/06 3:07 PM Page VIII
List of Articles
IX
VOLUME 1
A
ACCOUNTING
Harvey S. Hendrickson
ACCOUNTING CYCLE
Allie F. Miller
ACCOUNTING INFORMATION
SYSTEMS
Theodore J. Mock
ACCOUNTING: HISTORICAL
PERSPECTIVES
Carol J. Normand
Charles W. Wootton
ACTIVITY-BASED MANAGEMENT
Clifford Brown
Lawrence A. Klein
ADVERTISING
Michael Milbier
Allen D. Truell
ADVERTISING AGENCIES
John A. Swope
Scott Williams
AGENCY THEORY
Mary Ellen Oliverio
AMERICAN INSTITUTE OF
CERTIFIED PUBLIC
ACCOUNTANTS

Barry C. Melancon
AMERICAN MANAGEMENT
ASSOCIATION
Nikole M. Pogeman
AMERICAN MARKETING
ASSOCIATION
Val Hinton
Mary Jean Lush
AMERICANS WITH DISABILITIES ACT
OF
1990
Nikole M. Pogeman
ANALYTICAL PROCEDURES
Jean C. Bedard
James J. Maroney
ANTITRUST LEGISLATION
Janel Kupferschmid
ARTIFICIAL INTELLIGENCE
Lisa E. Gueldenzoph
Mark J. Snyder
ASSOCIATION OF CERTIFIED FRAUD
EXAMINERS
Bernard H. Newman
ASSURANCE SERVICES
Don M. Pallais
AUDIT COMMITTEES
Louis Braiotta, Jr.
AUDITING
Mohammad J. Abdolmohammadi
Jay C. Thibodeau

B
BALANCE OF TRADE
Gary P. Tripp
BANKRUPTCY
Roy J. Girasa
BEHAVIORAL SCIENCE MOVEMENT
Marcia Anderson
BONDS
Allie F. Miller
Mary Ellen Oliverio
BUDGETS AND BUDGETING
Roger K. Doost
BUREAU OF LABOR STATISTICS
Bernard H. Newman
BUSINESS CYCLE
David A. Bowers
Anand G. Shetty
BUSINESS MARKETING
Thomas Baird
BUSINESS PROFESSIONALS OF
AMERICA
Jewel E. Hairston
C
CAPITAL INVESTMENTS
Douglas R. Emery
John D. Finnerty
CAPITAL MARKETS
Surendra K. Kaushik
CAREERS: AN OVERVIEW
Judith Chiri

CAREERS IN ACCOUNTING
Bernard H. Newman
Mary Ellen Oliverio
CAREERS IN ECONOMICS
Wendy Rinholen
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CAREERS IN FINANCE
Mark D. Wilson
CAREERS IN INFORMATION
PROCESSING
Lisa E. Gueldenzoph
Mark J. Snyder
CAREERS IN LAW FOR BUSINESS
Craig A Bestwick
G. W. Maxwell
CAREERS IN MANAGEMENT
Thaddeus McEwen
CAREERS IN MARKETING
Randy L. Joyner
CERTIFICATIONS, LICENSURES, AND
DESIGNATIONS
Randy L. Joyner
CERTIFIED INTERNAL AUDITOR
Charles H. Calhoun
CERTIFIED MANAGEMENT
ACCOUNTANT
(CMA)/CERTIFIED
IN FINANCIAL MANAGEMENT
(CFM)
Priscilla Payne

CHANGE PROCESS
Cheryl L. Noll
CHANNELS OF DISTRIBUTION
Louis E. Pelton
David Strutton
Allen D. Truell
CHIEF FINANCIAL OFFICERS ACT OF
1990 AND FEDERAL FINANCIAL
MANAGEMENT ACT OF
1994
Jean E. Harris
CIRCULAR FLOW
Roger L. Luft
CIVIL RIGHTS ACT OF 1964
Lawrence F. Peters, Jr.
CLASSIC BRANDS
Karen J. Puglisi
COLLECTIVE BARGAINING
Paula Lee Luft
COMMUNICATION CHANNELS
Marie E. Flatley
COMMUNICATIONS IN BUSINESS
Heather Bigley
Jerry S. Evans
Sharon Lund O’Neil
COMPETITION
Marcy Satterwhite
COMPILATION AND REVIEW
SERVICES
Vicky B. Hoffman

COMPUTER GRAPHICS
Marty Maxwell
CONSUMER ADVOCACY AND
PROTECTION
Laurie Collier Hillstrom
CONSUMER AND BUSINESS
PRODUCTS
Thomas Baird
Earl C. Meyer
Sharon K. Slick
CONSUMER BEHAVIOR
Lauren G. Block
Patricia Williams
CONSUMER BILL OF RIGHTS
Val Hinton
Mary Jean Lush
CONSUMER PRICE INDEX
G. W. Maxwell
CONSUMER PRODUCT SAFETY ACT
OF
1972
Laurie Barfitt
Phyllis Bunn
CONSUMER PROTEST
Mary Jean Lush
CONTRACTS
Keith A. Bice
COOPERATIVE
Marcy Satterwhite
COPYRIGHTS

Randy L. Joyner
CORPORATE EDUCATION
Diane M. Clevesy
Lisa E. Gueldenzoph
Mark J. Snyder
CORPORATIONS
G. W. Maxwell
COST ALLOCATION
Clifford Brown
Lawrence A. Klein
COST-BENEFIT ANALYSIS
Mary Michel
Mary Ellen Oliverio
COST-VOLUME-PROFIT ANALYSIS
G. Stevenson Smith
COSTS
Roman L. Weil
COTTAGE INDUSTRIES
Julie A. Watkins
CREDIT/DEBIT/TRAVEL CARDS
Burton S. Kaliski
CRIME AND FRAUD
Michael Milbier
Allen D. Truell
CURRENCY EXCHANGE
Denise Woodbury
CUSTOMER SERVICE
Thomas Baird
Barry L. Reece
CYBER CRIME

Jensen J. Zhao
D
DATABASES
Gary Hansen
Dorothy A. Maxwell
DECA
Robert G. Berns
Jewel E. Hairston
DECISION MAKING
Marcy Satterwhite
DEREGULATION
Jeffrey J. Pompe
James R. Rinehart
DERIVATIVES
Patrick Casabona
DESKTOP PUBLISHING
Ray L. Young
DIGITAL DIVIDE
Dorothy A. Maxwell
DISCOUNT STORES
Thomas Baird
Winifred L. Green
Earl C. Meyer
DIVERSITY IN THE WORKPLACE
Patrick J. Highland
DIVISION OF LABOR
Donna L. McAlister-Kizzier
DOCUMENT PROCESSING
K. Virginia Hemby-Grubb
E

EARNINGS MANAGEMENT
Robert J. Sack
ECONOMIC ANALYSIS
Ralph D. Wray
ECONOMIC DEVELOPMENT
Ellen Jean Szarleta
X ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
LIST OF ARTICLES
eobfv1fm 7/5/06 3:07 PM Page X
ECONOMIC SYSTEMS
Denise Woodbury
ECONOMICS
Roger L. Luft
ECONOMICS: HISTORICAL
PERSPECTIVES
Roger L. Luft
ELECTRONIC COMMERCE
Michael Alles
Miklos A. Vaserhelyi
ELECTRONIC MAIL
Marsha L. Bayless
E-MARKETING
Jensen J. Zhao
EMPLOYEE ASSISTANCE PROGRAMS
Patrick J. Highland
EMPLOYEE BENEFITS
Marcy Satterwhite
EMPLOYEE COMPENSATION
Lee Wonsick Lee
EMPLOYEE DISCIPLINE

Marcia Anderson
ENTREPRENEURSHIP
Robert G. Berns
Jewel E. Hairston
ENVIRONMENTAL PROTECTION
AGENCY
Val Hinton
Mary Jean Lush
EQUAL EMPLOYMENT
OPPORTUNITY ACT OF
1972
Lawrence F. Peters, Jr.
EQUALPAYACTOF1963
Lawrence F. Peters, Jr.
ERGONOMICS
Patricia R. Graves
ETHICS: AN OVERVIEW
Keith Goree
ETHICS IN ACCOUNTING
Jan Sweeney
ETHICS IN ECONOMICS
Roger L. Luft
ETHICS IN FINANCE
Anand G. Shetty
ETHICS IN INFORMATION
PROCESSING
Melanie A. Meche
Annette Vincent
ETHICS IN LAW FOR BUSINESS
Carson Varner

ETHICS IN MANAGEMENT
Thomas Haynes
ETHICS IN MARKETING
John A. Swope
EUROPEAN UNION
Lawrence F. Peters, Jr.
F
FACSIMILE REPRODUCTION
Dorothy A. Maxwell
FACTORS OF PRODUCTION
Michael Brun
FADS
Jennifer L. Scheffer
FAIR PACKAGING AND LABELING
ACT OF
1966
Laurie Barfitt
Phyllis Bunn
FEDERAL RESERVE SYSTEM
Melvin Morgenstein
FEDERAL TRADE COMMISSION ACT
OF
1914
Laurie Barfitt
Phyllis Bunn
FINANCE
Surendra K. Kaushik
Lawrence M. Krackov
Massimo Santicchia
FINANCE: HISTORICAL

PERSPECTIVES
Mary Ellen Oliverio
FINANCIAL ACCOUNTING
STANDARDS BOARD
Dennis R. Beresford
FINANCIAL FORECASTS AND
PROJECTIONS
Bernard H. Newman
FINANCIAL INSTITUTIONS
Surendra K. Kaushik
FINANCIAL LITERACY
Betty J. Brown
FINANCIAL STATEMENT ANALYSIS
Mary Brady Greenawalt
FINANCIAL STATEMENTS
Victoria Shoaf
FISCAL POLICY
G. W. Maxwell
FOOD AND DRUG ADMINISTRATION
Val Hinton
Mary Jean Lush
FOOD, DRUG, AND COSMETIC ACT
OF
1938
Laurie Barfitt
Phyllis Bunn
FORECASTING IN BUSINESS
Roger L. Luft
FOREIGN CORRUPT PRACTICES ACT
OF

1977
Charles H. Calhoun
FORENSIC ACCOUNTING
Richard O. Hanson
FRANCHISING
Patricia A. Spirou
FRAUDULENT FINANCIAL
REPORTING
Gerard A. Lange
FUTURE BUSINESS LEADERS OF
AMERICA
Jill T. White
G
GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES
Edmund L. Jenkins
Cheri Reither Mazza
GLOBAL ECONOMY
G. W. Maxwell
GOODS AND SERVICES
Matthew F. Hazzard
Earl C. Meyer
GOVERNMENT ACCOUNTING
Mary L. Fischer
GOVERNMENT AUDITING
STANDARDS
Bernard H. Newman
Mary Ellen Oliverio
GOVERNMENT FINANCIAL
REPORTING

Robert J. Muretta, Jr.
GOVERNMENT ROLE IN BUSINESS
Michael Milbier
Allen D. Truell
GOVERNMENTAL ACCOUNTING
STANDARDS BOARD
Jesse W. Hughes
GREEN MARKETING
Allen D. Truell
GROSS DOMESTIC PRODUCT (GDP)
Gregory P. Valentine
ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION XI
LIST OF ARTICLES
eobfv1fm 7/5/06 3:07 PM Page XI
H
HARDWARE
Armand Seguin
Cynthia Shelton (Anast) Seguin
HEALTH ISSUES IN BUSINESS
Brenda J. Reinsborough
HUMAN RELATIONS
Patrick J. Highland
HUMAN RESOURCE MANAGEMENT
Christine Jahn
I
IDENTITY THEFT
Jensen J. Zhao
INCOME
Gregory P. Valentine
INCOME TAX: HISTORICAL

PERSPECTIVES
Jean E. Harris
INDEPENDENCE STANDARDS BOARD
C. Richard Baker
INFORMATION PROCESSING
Mary Nemesh
INFORMATION PROCESSING:
HISTORICAL PERSPECTIVES
Ronda B. Henderson
INFORMATION SYSTEMS
Douglas C. Smith
INFORMATION TECHNOLOGY
Charlotte J. Boling
INSTITUTE OF INTERNAL AUDITORS
Trish W. Harris
INSTITUTE OF MANAGEMENT
ACCOUNTANTS
Robert F. Randall
Kathy Williams
INSURANCE
Edward J. Keller, Jr.
Anand G. Shetty
INTELLECTUAL CAPITAL
Bernard H. Newman
INTERACTIVE TECHNOLOGY
Philip D. Taylor
INTEREST RATES
Henry H. Davis
INTERNAL CONTROL SYSTEMS
Audrey A. Gramling

INTERNATIONAL ACCOUNTING
STANDARDS
Mahendra Gujarathi
INTERNATIONAL ASSOCIATION OF
ADMINISTRATIVE PROFESSIONALS
Dorothy A. Maxwell
INTERNATIONAL BUSINESS
Dorothy A. Maxwell
INTERNATIONAL FEDERATION OF
ACCOUNTANTS
Frederick D.S. Choi
INTERNATIONAL INVESTMENT
Masaaki Kotabe
INTERNATIONAL MARKETING
Shaheen Borna
INTERNATIONAL MONETARY FUND
Bernard H. Newman
INTERNATIONAL TRADE
Michael Milbier
Allen D. Truell
INTERNET
Lisa E. Gueldenzoph
Mark J. Snyder
INTERSTATE COMMERCE
Patricia A. Spirou
INTERSTATE COMMERCE
COMMISSION
Val Hinton
Mary Jean Lush
INTRANET/EXTRANET

Armand Seguin
Cynthia Shelton (Anast) Seguin
INVENTORY CONTROL
Mark Lefebvre
INVESTMENTS
Joel Lerner
VOLUME 2
J
JOB ANALYSIS AND DESIGN
Richard F. Bortz
JOB ENRICHMENT
Marcy Satterwhite
JOB SATISFACTION
G. W. Maxwell
L
LABOR UNIONS
G. W. Maxwell
LAW IN BUSINESS
Carson Varner
LEADERSHIP
Lee Wonsick Lee
LIFESTYLES
Michelle Voto
LISTENING SKILLS IN BUSINESS
Jan Hargrave
M
MACROECONOMICS/
MICROECONOMICS
Lisa S. Huddlestun
MANAGEMENT

Roger L. Luft
MANAGEMENT: AUTHORITY AND
RESPONSIBILITY
Cheryl L. Noll
MANAGEMENT: HISTORICAL
PERSPECTIVES
Roger L. Luft
MANAGEMENT INFORMATION
SYSTEMS
Lloyd W. Bartholome
MANAGEMENT/LEADERSHIP STYLES
Thomas Haynes
MANUFACTURING
Thomas Haynes
MARKET SEGMENTATION
Patrick M. Graham
Earl C. Meyer
MARKETING
Allen D. Truell
MARKETING CONCEPT
Thomas Baird
Winifred L. Green
Earl C. Meyer
MARKETING: HISTORICAL
PERSPECTIVES
James E. Stoddard
MARKETING MIX
Allen D. Truell
MARKETING RESEARCH
Christine F. Latino

MASS MARKETING
Lori A. Dailey
Earl C. Meyer
MEETING MANAGEMENT
Brenda J. Reinsborough
MERGERS AND ACQUISITIONS
Bernard H. Newman
Mary Ellen Oliverio
MONETARY POLICY
Edward Wei-Te Hsieh
XII ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
LIST OF ARTICLES
eobfv1fm 7/5/06 3:07 PM Page XII
MONEY
Denise Woodbury
MONEY SUPPLY
Hassan Mohammadi
MONOPOLY
G. W. Maxwell
MOTIVATION
Patricia R. Graves
MULTIMEDIA SYSTEMS
George A. Mundrake
MUTUAL FUNDS
Anand G. Shetty
N
NATIONAL ASSOCIATION OF STATE
BOARDS OF ACCOUNTANCY
Louise Dratler Haberman
NATIONAL BUSINESS EDUCATION

ASSOCIATION
Dorothy A. Maxwell
NATIONAL LABOR RELATIONS
BOARD
Tod W. Rejholec
NATIONAL RETAIL FEDERATION
Val Hinton
Mary Jean Lush
NATIONAL TRANSPORTATION
SAFETY BOARD
Val Hinton
Mary Jean Lush
NEGOTIATION
Donna L. McAlister-Kizzier
NETWORKING
Dennis J. LaBonty
NO CHILD LEFT BEHIND
LEGISLATION
Dorothy A. Maxwell
NORTH AMERICAN INDUSTRY
CLASSIFICATION SYSTEM
Mary Michel
NOT-FOR-PROFIT ACCOUNTING
Janet S. Greenlee
G. Stevenson Smith
O
OCCUPATIONAL SAFETY AND
HEALTH ADMINISTRATION
(OSHA)
Val Hinton

Mary Jean Lush
OFFICE LAYOUT
Zane K. Quible
OFFICE TECHNOLOGY
Anna Nemesh
OLIGOPOLY
Rajeev K. Goel
ONLINE EDUCATION
Carol Larson Jones
OPERATIONS MANAGEMENT
Janel Kupferschmid
OPPORTUNITY COST
Denise Woodbury
ORGANIZATIONAL BEHAVIOR AND
DEVELOPMENT
Cheryl L. Noll
ORGANIZATIONAL STRUCTURE
Christine Jahn
OUTSOURCING IN THE BUSINESS
ENVIRONMENT
Carolyn H. Ashe
P
PACKAGING
Thomas Baird
PARTNERSHIPS
Anna Nemesh
PATENTS
Randy L. Joyner
PERFORMANCE APPRAISAL
Lee Wonsick Lee

PERFORMANCE AUDITS
Mary Ellen Oliverio
PERSONAL FINANCIAL PLANNING
Joel Lerner
PERSONAL SELLING
Joseph D. Chapman
POLICY DEVELOPMENT
Marie E. Flatley
PRICE FIXING
Patricia A. Spirou
PRICING
Michael Milbier
Allen D. Truell
PRIVACY AND SECURITY
Lisa E. Gueldenzoph
Mark J. Snyder
PRODUCT LABELING
Thomas Baird
Michael Milbier
PRODUCT LINES
Michael Milbier
PRODUCT MIX
Michael Milbier
PRODUCTIVITY
John W. Hansen
Sharon Lund O’Neil
PROFESSIONAL EDUCATION
Connie Anderson
PROGRAMMING
Ronda B. Henderson

PROMOTION
Michael Milbier
Allen D. Truell
PUBLIC COMPANY ACCOUNTING
OVERSIGHT BOARD
Bernard H. Newman
PUBLIC RELATIONS
Jensen J. Zhao
PUBLICITY
Jennifer L. Scheffer
Q
QUALITY MANAGEMENT
Roger L. Luft
R
READING SKILLS IN BUSINESS
B. June Schmidt
RECORDS MANAGEMENT
Carolyn H. Ashe
REENGINEERING
Nashwa George
RESEARCH IN BUSINESS
Jensen J. Zhao
RETAILERS
Patricia A. Spirou
RISK MANAGEMENT
C. Richard Baker
ROBINSON-PATMAN ACT OF 1936
Laurie Barfitt
Phyllis Bunn
S

SCHOOL TO CAREER MOVEMENT
Jill T. White
SCIENTIFIC MANAGEMENT
Marcia Anderson
SECURITIES ACTS: REQUIREMENTS
FOR ACCOUNTING
Samir Fahmy
Laurence Mauer
ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION XIII
LIST OF ARTICLES
eobfv1fm 7/5/06 3:07 PM Page XIII
SECURITIES AND EXCHANGE
COMMISSION
Val Hinton
Mary Jean Lush
SERVICE INDUSTRIES
Amy Lynn DeVault
Alan G. Krabbenhoft
SEXUAL HARASSMENT
Clarice P. Brantley
Rita Shaw Rone
SHERMAN ANTITRUST ACT OF
1890
Phyllis Bunn
SHOPPING
Audrey E. Langill
SINGLE AUDIT ACT OF 1984 WITH
AMENDMENTS
Mary L. Fischer
SKILLSUSA

Dorothy A. Maxwell
SMALL BUSINESS ADMINISTRATION
Val Hinton
Mary Jean Lush
SOCIAL MARKETING
Allen D. Truell
SOCIAL RESPONSIBILITY AND
ORGANIZATIONAL ETHICS
Thomas Haynes
SOFTWARE
Douglas C. Smith
SOLE PROPRIETORSHIP
G. W. Maxwell
SPEAKING SKILLS IN BUSINESS
Jan Hargrave
SPREADSHEETS
Betty J. Brown
STAGGERS RAIL AND MOTOR
CARRIER ACTS OF
1980
Laurie Barfitt
Phyllis Bunn
STANDARD COSTING
Bernard H. Newman
Mary Ellen Oliverio
STANDARD METROPOLITAN
STATISTICAL AREAS
Val Hinton
Mary Jean Lush
STANDARD-BASED WORK

PERFORMANCE
Wanda L. Stitt-Gohdes
STATE SOCIETIES OF CPAS
Kathleen Simons
STATEMENTS ON MANAGEMENT
ACCOUNTING
B. Douglas Clinton
STOCK EXCHANGES
Ian Domowitz
Anand G. Shetty
STOCK INDEXES
Joel Lerner
STOCKS
Joel Lerner
STRATEGIC MANAGEMENT
Norman S. Wright
STRESS
Jim D. Rucker
SUPPLY AND DEMAND
John L. Conant
T
TARGET MARKETING
Tatum Krause
TAXATION
Jeffrey L. Jacobs
TELECOMMUNICATIONS
Mary Nemesh
TELECOMMUTING
Carol Larson Jones
TELEMARKETING

Thomas Baird
Winifred L. Green
Earl C. Meyer
TELEPHONE SKILLS
Dorothy A. Maxwell
TEMPORARY EMPLOYMENT
Dorothy A. Maxwell
TIME MANAGEMENT
Carrie Foley
TIME VALUE OF MONEY
Roman L. Weil
TRADE SHOWS
Winifred L. Green
Earl C. Meyer
TRADEMARKS
Randy L. Joyner
TRADING BLOCS
Masaaki Kotabe
TRAINING AND DEVELOPMENT
David J. Hyslop
TRANSFER PAYMENTS
Michael Nelson
TRANSPORTATION
Betty J. Brown
TRIPLE BOTTOM LINE REPORTING
John Vann
U
UNIFORM CERTIFIED PUBLIC
ACCOUNTANT EXAMINATION
Bernard H. Newman

Mary Ellen Oliverio
UNITED STATES GOVERNMENT
ACCOUNTABILITY OFFICE
Jean E. Harris
V
VIDEOCONFERENCING
James E. Miles
VOICE MESSAGING
Christine M. Irvine
W
WHOLESALERS
Patricia A. Spirou
WORD PROCESSING
Ray L. Young
WORK GROUPS (TEAMS)
Tena B. Crews
WORK MEASUREMENT
Nashwa George
WORKERS’ COMPENSATION
Dorothy A. Maxwell
WRITING SKILLS IN BUSINESS
G. W. Maxwell
XIV ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
LIST OF ARTICLES
eobfv1fm 7/5/06 3:07 PM Page XIV
Contributors
XV
Mohammad J. Abdolmohammadi
Bentley College
AUDITING

Michael Alles
Rutgers University
ELECTRONIC COMMERCE
Connie Anderson
PROFESSIONAL EDUCATION
Marcia Anderson
Southern Illinois University,
Carbondale
BEHAVIORAL SCIENCE MOVEMENT
EMPLOYEE DISCIPLINE
SCIENTIFIC MANAGEMENT
Carolyn H. Ashe
University of Houston Downtown
OUTSOURCING IN THE BUSINESS
ENVIRONMENT
RECORDS MANAGEMENT
Thomas Baird
Ball State University
BUSINESS MARKETING
CONSUMER AND BUSINESS PROD
-
UCTS
CUSTOMER SERVICE
DISCOUNT STORES
MARKETING CONCEPT
PACKAGING
PRODUCT LABELING
TELEMARKETING
C. Richard Baker
Adelphi University

INDEPENDENCE STANDARDS BOARD
RISK MANAGEMENT
Laurie Barfitt
Delta State University
CONSUMER PRODUCT SAFETY ACT
OF
1972
FAIR PACKAGING AND LABELING
ACT OF
1966
FEDERAL TRADE COMMISSION ACT
OF
1914
FOOD, DRUG, AND COSMETIC ACT
OF
1938
ROBINSON-PATMAN ACT OF 1936
STAGGERS RAIL AND MOTOR CAR-
RIER ACTS OF 1980
Lloyd W. Bartholome
Utah State University
MANAGEMENT INFORMATION SYS-
TEMS
Marsha L. Bayless
Stephen A. Austin State University
ELECTRONIC MAIL
Jean C. Bedard
Bentley College
ANALYTICAL PROCEDURES
Dennis R. Beresford

University of Georgia
FINANCIAL ACCOUNTING STAN-
DARDS BOARD
Robert G. Berns
Bowling Green State University
DECA
ENTREPRENEURSHIP
Craig A. Bestwick
San Francisco, California
CAREERS IN LAW FOR BUSINESS
Keith A. Bice
Bingham McHale LLP
CONTRACTS
Heather Bigley
University of Houston
COMMUNICATIONS IN BUSINESS
Lauren G. Block
Baruch College
CONSUMER BEHAVIOR
Charlotte J. Boling
University of Western Florida
INFORMATION TECHNOLOGY
Shaheen Borna
Ball State University
INTERNATIONAL MARKETING
Richard F. Bortz
Southern Illinois University,
Carbondale
JOB ANALYSIS AND DESIGN
David A. Bowers

Case Western Reserve University
BUSINESS CYCLE
eobfv1fm 7/5/06 3:07 PM Page XV
Louis Braiotta, Jr.
SUNY, Binghampton
AUDIT COMMITTEES
Clarice P. Brantley
Pensacola, Florida
SEXUAL HARASSMENT
Betty J. Brown
Ball State University
FINANCIAL LITERACY
SPREADSHEETS
TRANSPORTATION
Clifford Brown
Bentley College
ACTIVITY-BASED MANAGEMENT
COST ALLOCATION
Michael Brun
Illinois State University
FACTORS OF PRODUCTION
Phyllis Bunn
Delta State University
CONSUMER PRODUCT SAFETY ACT
OF
1972
FAIR PACKAGING AND LABELING
ACT OF
1966
FEDERAL TRADE COMMISSION ACT

OF
1914
FOOD, DRUG, AND COSMETIC ACT
OF
1938
ROBINSON-PATMAN ACT OF 1936
SHERMAN ANTITRUST ACT OF 1890
STAGGERS RAIL AND MOTOR CAR-
RIER ACTS OF 1980
Charles H. Calhoun
Englewood, Colorado
CERTIFIED INTERNAL AUDITOR
FOREIGN CORRUPT PRACTICES ACT
OF
1977
Patrick Casabona
St. John’s University
DERIVATIVES
Joseph D. Chapman
Ball State University
PERSONAL SELLING
Judith Chiri
Colorado Springs, Colorado
CAREERS: AN OVERVIEW
Frederick D.S. Choi
New York University
INTERNATIONAL FEDERATION OF
ACCOUNTANTS
Diane M. Clevesy
CORPORATE EDUCATION

B. Douglas Clinton
Northern Illinois University
STATEMENTS ON MANAGEMENT
ACCOUNTING
John L. Conant
Indiana State University
SUPPLY AND DEMAND
Tena B. Crews
University of South Carolina
WORK GROUPS (TEAMS)
Lori A. Dailey
MASS MARKETING
Henry H. Davis
Eastern Illinois University
INTEREST RATES
Amy Lynn DeVault
Roosevelt University
SERVICE INDUSTRIES
Ian Domowitz
Investment Technology Group, Inc.,
STOCK EXCHANGES
Roger K. Doost
Clemson University
BUDGETS AND BUDGETING
Douglas R. Emery
University of Miami
CAPITAL INVESTMENTS
Jerry S. Evans
University of Houston
COMMUNICATIONS IN BUSINESS

Samir Fahmy
St. John’s University
SECURITIES ACTS: REQUIREMENTS
FOR ACCOUNTING
John D. Finnerty
Fordham University
CAPITAL INVESTMENTS
Mary L. Fischer
University of Texas at Tyler
GOVERNMENT ACCOUNTING
SINGLE AUDIT ACT OF
1984
Marie E. Flatley
San Diego State University
COMMUNICATION CHANNELS
POLICY DEVELOPMENT
Carrie Foley
Baldwin School, Hiram, Maine
TIME MANAGEMENT
Nashwa George
Montclair State University
PUBLIC OVERSIGHT BOARD
REENGINEERING
WORK MEASUREMENT
Roy J. Girasa
Pace University
BANKRUPTCY
Rajeev K. Goel
Illinois State University
OLIGOPOLY

Keith Goree
St. Petersburg College
ETHICS: AN OVERVIEW
Patrick M. Graham
MARKET SEGMENTATION
Audrey A. Gramling
Georgia State University
INTERNAL CONTROL SYSTEMS
Patricia R. Graves
Eastern Illinois University
ERGONOMICS
MOTIVATION
Winifred L. Green
DISCOUNT STORES
MARKETING CONCEPT
TELEMARKETING
TRADE SHOWS
Mary Brady Greenawalt
Greensboro, North Carolina
FINANCIAL STATEMENT ANALYSIS
Janet S. Greenlee
University of Dayton
NOT-FOR-PROFIT ACCOUNTING
Lisa E. Gueldenzoph
North Carolina A&T State University
ARTIFICIAL INTELLIGENCE
CAREERS IN INFORMATION PRO
-
CESSING
CORPORATE EDUCATION

INTERNET
PRIVACY AND SECURITY
Mahendra Gujarathi
Bentley College
INTERNATIONAL ACCOUNTING
STANDARDS
XVI ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
CONTRIBUTORS
eobfv1fm 7/5/06 3:07 PM Page XVI
Louise Dratler Haberman
NASBA
NATIONAL ASSOCIATION OF STATE
BOARDS OF ACCOUNTANCY
Jewel E. Hairston
Virginia State University
BUSINESS PROFESSIONALS OF AMER-
ICA
DECA
ENTREPRENEURSHIP
Gary Hansen
Brigham Young University
DATABASES
John W. Hansen
PRODUCTIVITY
Richard O. Hanson
Southern New Hampshire University
FORENSIC ACCOUNTING
Jan Hargrave
Jan Hargrave & Associates
LISTENING SKILLS IN BUSINESS

SPEAKING SKILLS IN BUSINESS
Jean E. Harris
Pennsylvania State University,
Harrisburg
CHIEF FINANCIAL OFFICERS ACT OF
1990 AND FEDERAL FINANCIAL
MANAGEMENT ACT OF
1994
INCOME TAX: HISTORICAL PERSPEC-
TIVES
UNITED STATES GOVERNMENT
ACCOUNTABILITY OFFICE
Trish W. Harris
The Institute of Internal Auditors
INSTITUTE OF INTERNAL AUDITORS
Thomas Haynes
Illinois State University
ETHICS IN MANAGEMENT
MANAGEMENT
/LEADERSHIP STYLES
MANUFACTURING
SOCIAL RESPONSIBILITY AND ORGA
-
NIZATIONAL ETHICS
Matthew F. Hazzard
GOODS AND SERVICES
K. Virginia Hemby-Grubb
Middle Tennessee State University
DOCUMENT PROCESSING
Ronda B. Henderson

North Carolina A&T State University
INFORMATION PROCESSING: HIS-
TORICAL PERSPECTIVES
PROGRAMMING
Harvey S. Hendrickson
Florida International University
ACCOUNTING
Patrick J. Highland
Iowa City Community School District
DIVERSITY IN THE WORKPLACE
EMPLOYEE ASSISTANCE PROGRAMS
HUMAN RELATIONS
Laurie Collier Hillstrom
Northern Lights Writers Group
CONSUMER ADVOCACY AND PRO-
TECTION
Val Hinton
Delta State University
AMERICAN MARKETING ASSOCIA-
TION
CONSUMER BILL OF RIGHTS
ENVIRONMENTAL PROTECTION
AGENCY
FOOD AND DRUG ADMINISTRATION
INTERSTATE COMMERCE COMMIS
-
SION
NATIONAL RETAIL FEDERATION
NATIONAL TRANSPORTATION
SAFETY BOARD

OCCUPATIONAL SAFETY AND
HEALTH ADMINISTRATION
(OSHA)
SECURITIES AND EXCHANGE COM-
MISSION
SMALL BUSINESS ADMINISTRATION
STANDARD METROPOLITAN STATIS
-
TICAL AREAS
Vicky B. Hoffman
University of Pittsburgh
COMPILATION AND REVIEW SERV-
ICES
Edward Wei-Te Hsieh
California State University, Los
Angeles
MONETARY POLICY
Lisa S. Huddlestun
MACROECONOMICS/MICROECO-
NOMICS
Jesse W. Hughes
Old Dominion University, emeritus
GOVERNMENTAL ACCOUNTING
STANDARDS BOARD
David J. Hyslop
Bowling Green State University
TRAINING AND DEVELOPMENT
Christine M. Irvine
VOICE MESSAGING
Jeffrey L. Jacobs

Quinnipiac University
TAXATION
Christine Jahn
University of Bamberg
HUMAN RESOURCE MANAGEMENT
ORGANIZATIONAL STRUCTURE
Edmund L. Jenkins
Norwalk, Connecticut
GENERALLY ACCEPTED ACCOUNT-
ING PRINCIPLES
Carol Larson Jones
California State Polytechnic
University, Pomona
ONLINE EDUCATION
TELECOMMUTING
Randy L. Joyner
Wilkesboro, North Carolina
CAREERS IN MARKETING
CERTIFICATIONS
, LICENSURES, AND
DESIGNATIONS
COPYRIGHTS
PATENTS
TRADEMARKS
Burton S. Kaliski
Southern New Hampshire University
CREDIT/DEBIT/TRAVEL CARDS
Surendra K. Kaushik
Pace University
CAPITAL MARKETS

FINANCE
FINANCIAL INSTITUTIONS
Edward J. Keller, Jr.
INSURANCE
Lawrence A. Klein
Bentley College
ACTIVITY-BASED MANAGEMENT
COST ALLOCATION
Masaaki Kotabe
Temple University
INTERNATIONAL INVESTMENT
TRADING BLOCS
ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION XVII
CONTRIBUTORS
eobfv1fm 7/5/06 3:07 PM Page XVII
Alan G. Krabbenhoft
Roosevelt University
SERVICE INDUSTRIES
Lawrence M. Krackov
FINANCE
Tatum Krause
University of Hartford
TARGET MARKETING
Janel Kupferschmid
Bloomington, Illinois
ANTITRUST LEGISLATION
OPERATIONS MANAGEMENT
Dennis J. LaBonty
Utah State University
NETWORKING

Gerard A. Lange
St. John’s University
FRAUDULENT FINANCIAL REPORT-
ING
Audrey E. Langill
SHOPPING
Christine F. Latino
Atkinson, New Hampshire
MARKETING RESEARCH
Lee Wonsick Lee
Central Connecticut State University
EMPLOYEE COMPENSATION
LEADERSHIP
PERFORMANCE APPRAISAL
Mark Lefebvre
INVENTORY CONTROL
Joel Lerner
Monticello, New York
INVESTMENTS
PERSONAL FINANCIAL PLANNING
STOCK INDEXES
STOCKS
Paula Lee Luft
Black Hawk College-East Campus
COLLECTIVE BARGAINING
Roger L. Luft
Eastern Illinois University, retired
CIRCULAR FLOW
ECONOMICS
ECONOMICS

: HISTORICAL PERSPEC-
TIVES
ETHICS IN ECONOMICS
FORECASTING IN BUSINESS
MANAGEMENT
MANAGEMENT
: HISTORICAL PER-
SPECTIVES
QUALITY MANAGEMENT
Mary Jean Lush
Delta State University
AMERICAN MARKETING ASSOCIA-
TION
CONSUMER BILL OF RIGHTS
CONSUMER PROTEST
ENVIRONMENTAL PROTECTION
AGENCY
FOOD AND DRUG ADMINISTRATION
INTERSTATE COMMERCE COMMIS
-
SION
NATIONAL RETAIL FEDERATION
NATIONAL TRANSPORTATION
SAFETY BOARD
OCCUPATIONAL SAFETY AND
HEALTH ADMINISTRATION
(OSHA)
SECURITIES AND EXCHANGE COM-
MISSION
SMALL BUSINESS ADMINISTRATION

STANDARD METROPOLITAN STATIS
-
TICAL AREAS
James J. Maroney
Northeastern University
ANALYTICAL PROCEDURES
Laurence Mauer
St. John’s University
SECURITIES ACTS: REQUIREMENTS
FOR ACCOUNTING
Dorothy A. Maxwell
Sacopee Valley High School, Hiram,
Maine
DATABASES
DIGITAL DIVIDE
FACSIMILE REPRODUCTION
INTERNATIONAL ASSOCIATION OF
ADMINISTRATIVE PROFESSIONALS
INTERNATIONAL BUSINESS
NATIONAL BUSINESS EDUCATION
ASSOCIATION
NO CHILD LEFT BEHIND LEGISLA
-
TION
SKILLSUSA
TELEPHONE SKILLS
TEMPORARY EMPLOYMENT
WORKERS
’ COMPENSATION
G. W. Maxwell

San Jose State University, retired
CAREERS IN LAW FOR BUSINESS
CONSUMER PRICE INDEX
CORPORATIONS
FISCAL POLICY
GLOBAL ECONOMY
JOB SATISFACTION
LABOR UNIONS
MONOPOLY
SOLE PROPRIETORSHIP
WRITING SKILLS IN BUSINESS
Marty Maxwell
Creative Composition, Inc.
COMPUTER GRAPHICS
Cheri Reither Mazza
Fordham University
GENERALLY ACCEPTED ACCOUNT-
ING PRINCIPLES
Donna L. McAlister-Kizzier
Morehead State University
DIVISION OF LABOR
NEGOTIATION
Thaddeus McEwen
North Carolina A&T State University
CAREERS IN MANAGEMENT
Melanie A. Meche
University of Louisiana, Lafayette
ETHICS IN INFORMATION PROCESS-
ING
Barry C. Melancon

American Institute of CPAs
AMERICAN INSTITUTE OF CERTI-
FIED PUBLIC ACCOUNTANTS
Earl C. Meyer
Eastern Michigan University, retired
CONSUMER AND BUSINESS PROD-
UCTS
DISCOUNT STORES
GOODS AND SERVICES
MARKET SEGMENTATION
MARKETING CONCEPT
MASS MARKETING
TELEMARKETING
TRADE SHOWS
Mary Michel
Manhattan College
COST-BENEFIT ANALYSIS
NORTH AMERICAN INDUSTRY CLAS
-
SIFICATION SYSTEM
Michael Milbier
San Jose, California
ADVERTISING
CRIME AND FRAUD
GOVERNMENT ROLE IN BUSINESS
INTERNATIONAL TRADE
PRICING
PRODUCT LABELING
XVIII ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
CONTRIBUTORS

eobfv1fm 7/5/06 3:07 PM Page XVIII
PRODUCT LINES
PRODUCT MIX
PROMOTION
James E. Miles
VIDEOCONFERENCING
Allie F. Miller
Drexel University
ACCOUNTING CYCLE
BONDS
Theodore J. Mock
University of Southern California
ACCOUNTING INFORMATION SYS-
TEMS
Hassan Mohammadi
Illinois State University
MONEY SUPPLY
Melvin Morgenstein
Plainview, New York
FEDERAL RESERVE SYSTEM
George A. Mundrake
Ball State University
MULTIMEDIA SYSTEMS
Robert J. Muretta, Jr.
Touro University International
GOVERNMENT FINANCIAL REPORT-
ING
Michael Nelson
TRANSFER PAYMENTS
Anna Nemesh

University of Maryland
OFFICE TECHNOLOGY
PARTNERSHIPS
Mary Nemesh
Anne Arundel County Public Schools
INFORMATION PROCESSING
TELECOMMUNICATIONS
Bernard H. Newman
Pace University
ASSOCIATION OF CERTIFIED FRAUD
EXAMINERS
BUREAU OF LABOR STATISTICS
CAREERS IN ACCOUNTING
FINANCIAL FORECASTS AND PRO
-
JECTIONS
GOVERNMENT AUDITING STAN
-
DARDS
INTELLECTUAL CAPITAL
INTERNATIONAL MONETARY FUND
MERGERS AND ACQUISITIONS
PUBLIC COMPANY ACCOUNTING
OVERSIGHT BOARD
STANDARD COSTING
UNIFORM CERTIFIED PUBLIC
ACCOUNTANT EXAMINATION
Cheryl L. Noll
Eastern Illinois University
CHANGE PROCESS

MANAGEMENT
: AUTHORITY AND
RESPONSIBILITY
ORGANIZATIONAL BEHAVIOR AND
DEVELOPMENT
Carol J. Normand
University of Wisconsin–Whitewater
ACCOUNTING: HISTORICAL PER-
SPECTIVES
Mary Ellen Oliverio
Pace University
AGENCY THEORY
BONDS
CAREERS IN ACCOUNTING
COST
-BENEFIT ANALYSIS
FINANCE
: HISTORICAL PERSPEC-
TIVES
GOVERNMENT AUDITING STAN
-
DARDS
MERGERS AND ACQUISITIONS
PERFORMANCE AUDITS
STANDARD COSTING
UNIFORM CERTIFIED PUBLIC
ACCOUNTANT EXAMINATION
Sharon Lund O’Neil
Univeristy of Houston
COMMUNICATIONS IN BUSINESS

PRODUCTIVITY
Don M. Pallais
Richmond, Virginia
ASSURANCE SERVICES
Priscilla Payne
Institute of Management Accountants
CERTIFIED MANAGEMENT
ACCOUNTANT
(CMA)/CERTIFIED
IN FINANCIAL MANAGEMENT
(CFM)
Louis E. Pelton
University of North Texas
CHANNELS OF DISTRIBUTION
Lawrence F. Peters, Jr.
Sacopee Valley High School, Hiram,
Maine
CIVIL RIGHTS ACT OF 1964
EQUAL EMPLOYMENT OPPORTUNITY
ACT OF
1972
EQUALPAYACTOF1963
EUROPEAN UNION
Nikole M. Pogeman
AMERICAN MANAGEMENT ASSOCIA-
TION
AMERICANS WITH DISABILITIES ACT
OF
1990
Jeffrey J. Pompe

Francis Marion University
DEREGULATION
Karen J. Puglisi
CLASSIC BRANDS
Zane K. Quible
Oklahoma State University
OFFICE LAYOUT
Robert F. Randall
IMA
INSTITUTE OF MANAGEMENT
ACCOUNTANTS
Barry L. Reece
CUSTOMER SERVICE
Brenda J. Reinsborough
Yarmouth, Maine
HEALTH ISSUES IN BUSINESS
MEETING MANAGEMENT
Tod W. Rejholec
NATIONAL LABOR RELATIONS
BOARD
James R. Rinehart
Francis Marion University, emeritus
DEREGULATION
Wendy Rinholen
Black Hawk College, East Campus
CAREERS IN ECONOMICS
Rita Shaw Rone
Gulf Breeze, Florida
SEXUAL HARASSMENT
Jim D. Rucker

Fort Hays State University
STRESS
Robert J. Sack
University of Virginia
EARNINGS MANAGEMENT
Massimo Santicchia
Standard & Poor’s
FINANCE
ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION XIX
CONTRIBUTORS
eobfv1fm 7/5/06 3:07 PM Page XIX
Marcy Satterwhite
Lake Land College
COMPETITION
COOPERATIVE
DECISION MAKING
EMPLOYEE BENEFITS
JOB ENRICHMENT
Jennifer L. Scheffer
Manchester, New Hampshire
FADS
PUBLICITY
B. June Schmidt
READING SKILLS IN BUSINESS
Armand Seguin
Emporia State University
HARDWARE
INTRANET
/EXTRANET
Cynthia Shelton (Anast) Seguin

Emporia State University
HARDWARE
INTRANET
/EXTRANET
Anand G. Shetty
Iona College
BUSINESS CYCLE
ETHICS IN FINANCE
INSURANCE
MUTUAL FUNDS
STOCK EXCHANGES
Victoria Shoaf
St. John’s University
FINANCIAL STATEMENTS
Kathleen Simons
Bryant College
STATE SOCIETIES OF CPAS
Sharon K. Slick
CONSUMER AND BUSINESS PROD-
UCTS
Douglas C. Smith
University of Kentucky
INFORMATION SYSTEMS
SOFTWARE
G. Stevenson Smith
West Virginia University
COST-VOLUME-PROFIT ANALYSIS
NOT
-FOR-PROFIT ACCOUNTING
Mark J. Snyder

MSA Consulting Group
ARTIFICIAL INTELLIGENCE
CAREERS IN INFORMATION PRO
-
CESSING
CORPORATE EDUCATION
INTERNET
PRIVACY AND SECURITY
Patricia A. Spirou
Southern New Hampshire University
FRANCHISING
INTERSTATE COMMERCE
PRICE FIXING
RETAILERS
WHOLESALERS
Wanda L. Stitt-Gohdes
University of Georgia
STANDARD-BASED WORK PERFORM-
ANCE
James E. Stoddard
Appalachian State University
MARKETING: HISTORICAL PERSPEC-
TIVES
David Strutton
University of North Texas
CHANNELS OF DISTRIBUTION
Jan Sweeney
Baruch College
ETHICS IN ACCOUNTING
John A. Swope

East Carolina University
ADVERTISING AGENCIES
ETHICS IN MARKETING
Ellen Jean Szarleta
Indiana University Northwest
ECONOMIC DEVELOPMENT
Philip D. Taylor
Wesleyan College
INTERACTIVE TECHNOLOGY
Jay C. Thibodeau
Bentley College
AUDITING
Gary P. Tripp
Southern New Hampshire University
BALANCE OF TRADE
Allen D. Truell
Ball State University
ADVERTISING
CHANNELS OF DISTRIBUTION
CRIME AND FRAUD
GOVERNMENT ROLE IN BUSINESS
GREEN MARKETING
INTERNATIONAL TRADE
MARKETING
MARKETING MIX
PRICING
PROMOTION
SOCIAL MARKETING
Gregory P. Valentine
University of Southern Indiana

GROSS DOMESTIC PRODUCT (GDP)
INCOME
John Vann
Ball State University
TRIPLE BOTTOM LINE REPORTING
Carson Varner
Illinois State University
ETHICS IN LAW FOR BUSINESS
LAW IN BUSINESS
Miklos A. Vaserhelyi
Rutgers University
ELECTRONIC COMMERCE
Annette Vincent
University of Louisiana, Lafayette
ETHICS IN INFORMATION PROCESS-
ING
Michelle Voto
Hesser College
LIFESTYLES
Julie A. Watkins
Brownfield, Maine
COTTAGE INDUSTRIES
Roman L. Weil
University of Chicago
COSTS
TIME VALUE OF MONEY
Jill T. White
University of West Florida
FUTURE BUSINESS LEADERS OF
AMERICA

SCHOOL TO CAREER MOVEMENT
Kathy Williams
IMA
INSTITUTE OF MANAGEMENT
ACCOUNTANTS
Patricia Williams
University of Pennsylvania
CONSUMER BEHAVIOR
XX ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
CONTRIBUTORS
eobfv1fm 7/5/06 3:07 PM Page XX
Scott Williams
Burlington, NC
ADVERTISING AGENCIES
Mark D. Wilson
Ohio State University
CAREERS IN FINANCE
Denise Woodbury
Southern Utah University
CURRENCY EXCHANGE
ECONOMIC SYSTEMS
MONEY
OPPORTUNITY COST
Charles W. Wootton
Eastern Illinois University
ACCOUNTING: HISTORICAL PER-
SPECTIVES
Ralph D. Wray
Bloomington, Indiana
ECONOMIC ANALYSIS

Norman S. Wright
Brigham Young University
STRATEGIC MANAGEMENT
Ray L. Young
Brigham Young University
DESKTOP PUBLISHING
WORD PROCESSING
Jensen J. Zhao
Ball State University
CYBER CRIME
E
-MARKETING
IDENTITY THEFT
PUBLIC RELATIONS
RESEARCH IN BUSINESS
ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION XXI
CONTRIBUTORS
eobfv1fm 7/5/06 3:07 PM Page XXI
A
1
ACCOUNTING
Accounting is a field of specialization critical to the func-
tioning of all types of organizations. Accounting often is
referred to as “the language of business” because of its role
in maintaining and processing all relevant financial infor-
mation that an entity requires for its managing and
reporting purposes.
Accountants often have a specific subspecialization
and function at one of several levels. Preparation for the
field is provided by secondary schools, postsecondary

business schools, community colleges, and four-year col-
leges and universities.
WHAT IS ACCOUNTING?
Accounting is a body of principles and conventions as well
as an established general process for capturing financial
information related to an entity’s resources and their use
in meeting the entity’s goals. Accounting is a service func-
tion that provides information of value to all operating
units and to other service functions, such as the headquar-
ters offices of a large corporation.
Origin of Accounting. Modern accounting is traced to
the work of an Italian monk, Luca Pacioli, whose publica-
tion in 1494
C.E. described the double-entry system,
which continues to be the fundamental structure for con-
temporary accounting systems in all types of entities.
When double-entry accounting is used, the balance sheet
identifies both the resources controlled by the entity and
those parties who have claims to those assets.
Early histories of business identify the bookkeeper as
a valuable staff member. As businesses became more com-
plex, the need for more astute review and interpretation of
financial information was met with the development of a
new profession—public accounting. In the United States,
public accounting began in the latter part of the nine-
teenth century. The first organization was established in
1887; the first professional examination was administered
in December 1896.
In the early days of the twentieth century, numerous
states established licensing requirements and began to

administer examinations. During the first century of pub-
lic accounting in the United States, the American Institute
of Certified Public Accountants (and its predecessor
organizations) provided strong leadership to meet the
changing needs of business, not-for-profit, and govern-
mental entities.
Generally Accepted Accounting Principles (GAAP). No
single source provides principles for handling all transac-
tions and events. Over time, conventional rules have
developed that continue to be relevant. Additionally,
groups have been authorized to establish accounting stan-
dards. The Financial Accounting Standards Board (FASB)
assumed responsibility for accounting standards and prin-
ciples in 1973. It is authorized to amend existing rules and
establish new ones. In 1992, the Auditing Standards
Board established the GAAP hierarchy. At the highest
level of the hierarchy are FASB statements and interpreta-
tions; APB opinions were issued from 1959 to 1973 by
the Accounting Principles Board (APB), and Accounting
Research Bulletins, issued until 1959 by the Committee
eobf_A 7/5/06 2:54 PM Page 1
2 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
Accounting
on Accounting Procedure (CAP); both the APB and CAP
were committees of the American Institute of Certified
Public Accountants (AICPA).
What type of unit is served by accounting? Probably no
concept or idea is more basic to accounting than the
accounting unit or entity, a term used to identify the
organization for which the accounting service is to be pro-

vided and whose accounting or other information is to be
analyzed, accumulated, and reported. The entity can be
any area, activity, responsibility, or function for which
information would be useful. Thus, an entity is estab-
lished to provide the needed focus of attention. The infor-
mation about one entity can be consolidated with that of
a part or all of another, and this combination process can
be continued until the combined entity reaches the unit
that is useful for the desired purpose.
Accounting activities may occur within or outside the
organization. Although accounting is usually identified
with privately owned, profit-seeking entities, its services
also are provided to not-for-profit organizations such as
universities or hospitals, to governmental organizations,
and to other types of units. The organizations may be
small, owner-operated enterprises offering a single prod-
uct or service, or huge multi-enterprise, international con-
glomerates with thousands of different products and
services. The not-for-profit, governmental, or other units
may be local, national, or international; they may be small
or very large; they may even be entire nations, as in
national income accounting. Since not-for-profit and
Luca Bartolomes Pacioli (ca. 1445–ca. 1517). Fra Luca Pacioli’s 1494 publication described the double-entry system of
accounting. © ARCHIVO ICONOGRAFICO, S.A./CORBIS
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