Card Set Information

2011-11-24 11:36:45

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  1. Financial management
    the efficient utilization and adequate regulation of assets, revenue, expenditures, and capital rights
  2. Accounting
    a language of business employed to communicate financial information based upon analyzing, recording, classification, summarization, reporting, and interpretation of financial data
  3. Accrual accounting
    recording in each fiscal period applicable expenses, whether paid or not, and income earned, whether collected or not
  4. Cash basis accounting
    an accounting practice in which revenue is not recognized in the accounting records until received and in which expenses are not recognized until paid
  5. Budget
    a formal written statement, which may be based upon adjusted historical data, of management's plans for the future expressed in financial terms
  6. Finance
    the business function of effectively obtaining and using funds
  7. Capital

    Net worth


    Owner's equity
    an owners financial interest in a business
  8. Working capital

    Circulating capital
    difference between currect assets and current liabilities
  9. Fixed capital
    long-term capital invested in the business; also, funds invested in such long-term assets as: land, building, machinery, furniture, fixtures, and other equipment
  10. Personal capital

    Equity capital
    capital invested in the business by the owner(s)
  11. Debt equity

    Debt capital

    Borrowed capital
    any borrowed or loaned capital invested in the business that must be repaid to creditors
  12. Angels
    private investors who are willing to supply financing for new and/or risky small venture start-ups
  13. Venture capitalists
    anyone that invests in, or financially sponsors, a new business
  14. Line of credit
    an understanding between a bank and the business indicating the maximum amount the bank is willing to loan the borrower
  15. Open end credit

    Revolving credit
    a line of credit that may be used over and over again up to a cetrain borrowing limit
  16. Mortgage loans
    a loan secured by the mortgage on property
  17. Mortgage
    a claim given by the borrower to the lender against the borrower's property in return for a loan
  18. Small Business Administration (SBA)
    the principal government agency concerned with the financing, operation, and management of small businesses
  19. Factoring
    obtaining cash before payments are received from customer's by selling off one's accounts receivables to a third party
  20. Assets
    Property of monetary value owned by the business
  21. Liabilities
    any debts that a business owes
  22. Cash
    coins, currency (paper money), checks, credit card receipts, and money orders received from others, as well as money deposited in the bank
  23. Accounts receivable
    an unwritten promise by a customer to pay, at a later date, for goods sold or services rendered
  24. Note receivable
    a written promise of a customer to pay the business a sum of money at a future date
  25. Fixed assets

    Long term assets
    property of a relatively permanent nature used in the operation of a business and not intended for resale
  26. Break even analysis

    Break even point
    the point at which total sales revenue equals total costs
  27. Fixed expenses
    a cost that, for a given period of time and range of activity called the "relevant range", does not change in total but becomes progressively smaller on a per-unit basis as volume increases.

    These do not increase with increased business, nor do they decrease with declining business activity
  28. Salary
    generally considered to be compensation for managerial or administrative services, expressed in terms of a month or year
  29. Depreciation
    the loss in value of a fixed asset due to wear and tear and the passage of time;

    or a method of matching the cost of a fixed asset against the revenues that the fixed asset will help produce during its useful life
  30. Variable expenses
    a cost which is uniform per unit but fluctuates in a total in direct proportion to change in the related activity or volume
  31. Supplies
    a type of asset that will be consumed as it is used
  32. Wages
    a form of compensation for skilled and unskilled labor, expressed in terms of hours, weeks, or pieces completed
  33. Federal Unemployment Tax Act (FUTA)
    a federal act imposed on each employer for the purpose of financing the administration costs of the federal and state unemployment compensation programs
  34. SUTA
    State unemployment tax act
  35. Federal Insurance Contributions Act (FICA)
    a federal act which requires most employers and employees to pay taxes to support the federal social security program
  36. Income tax
    a tax levied on individuals and businesses by federal, state, and local governments
  37. Retail sales tax
    a tax imposed on tangible personal property sold at retail
  38. Operating expenses

    any cost no specifically associated with production of identifiable products and services;

    expenses incurred in the normal operation of a business
  39. Operating ratios
    a comparison of profit and each item of expense in the income statement expressed as a percentage of sales income;

    these can be compared to the industry standard in regards to measuring the possible growth of the business
  40. Income statement
    a formal financial statement which presents the income, expenses, and resulting net profit or net loss for a given period
  41. Balance sheet
    a formal financial statement illustrating the assets, liabilities, and owner's equity of a business as of a specific date
  42. Liquidity analysis
    measures the ability of the firm to meet its current obligations
  43. Current Asset Ratio
    the current assets divided by the current liabilities and a measure of the liquidity of the business
  44. Current assets
    cash or other assets that will be converted to cash or consumed within one year
  45. Current liabilities
    debts of a business that are generally paid within one year
  46. Acid Test Ratio

    Quick Ratio
    quick assets divided by current liabilities
  47. Quick assets
    cash, marketable securities, accounts and notes receivable
  48. Return on investment
    the ratio of net income to owner's equity in the business
  49. Net income

    Net profit
    the difference between gross profit and expenses when gross profit is larger
  50. Activity analysis
    measures how efficiently a firm is utilizing its assets
  51. Accounts Receivable Turnover
    measures how many times per year accounts receivable are collected
  52. Age of Accounts Receivable
    measures the average time required to collect accounts receivable
  53. Inventory Turnover
    the number of times the average inventory has been sold or used up (turned over) during a period
  54. Age of Inventory
    measures the average time required to sell inventory
  55. Profitability analysis
    provides evidence concerning the earnings potential of a company and how effectively the firm is being managed
  56. Profit Margin
    net income divided by net sales
  57. Net sales
    sales minus sales returns and allowances minus sales discounts
  58. Gross profit

    Gross margin
    net sales minus the cost of goods sold
  59. Gross Profit Percentage
    gross profit divided by net sales