ACCOUNTING ENTITY ASSUMPTION Definition

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ACCOUNTING ENTITY ASSUMPTION states that a business is a separate legal entity from the owner. In the accounts the business' monetary transactions are recorded only.

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INVENTORY SHRINK, as used in retail, is reduction in physical inventory caused primarily by shoplifting and employee theft.

INVESTMENT GRADE, in securities, is a high credit rating indicating bonds generally considered to have the strongest possi­bility of paying interest and repaying principal when due. Standard & Poor's Corporation considers invest­ment grade bonds to be those it rates from AAA through BBB. Moody's considers investment grade to be from AAA to Baa3. Below investment grade bonds also are known as high yield or junk bonds. The NAIC designates investment grade bonds with the numerical rating of "I" or "2".

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