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Accounting Terms2
Foundations of Business Ch. 16 Vocabulary
Term | Definition |
---|---|
budget | a financial statement that projects income and expenditures or both over a specified future period |
capital budget | a financial statement that estimates a firm’s expenditures for major assets and its long-term financing needs |
cash budget | a financial statement that estimates cash receipts and cash expenditures over a specified period |
cash flow | the movement of money into and out of an organization |
collateral | real estate or property pledged as security for a loan |
commercial | a short-term promissory note issued by a large corporation |
common stock | stock whose owners may vote on corporate matters but whose claims on profits and assets are subordinate to the claims of others |
equity capital | money received from the owners or from the sale of shares of ownership in a business |
factor | a firm that specializes in buying other firms’ accounts receivable |
financial management | all of the activities concerned with obtaining money and using it effectively |
financial plan | a plan for obtaining and using the money needed to implement an organization’s goals |
initial public offering (IPO) | occurs when a corporation sells common stock to the general public for the first time |
investment banking firm | an organization that assists corporations in raising funds, usually by helping to sell new issues of stocks, bonds, or other financial securities |
long-term financing | money that will be used for longer than one year |
preferred stock | stock whose owners usually do not have voting rights but whose claims on dividends and assets are paid before those of common-stock owners |
promissory note | a written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date |
retained earnings | the portion of a corporation’s profits not distributed to stockholders |
securities exchange | a marketplace where member brokers meet to buy and sell securities |
short-term financing | money that will be used for one year or less |
trade credit | a type of short-term financing extended by a seller who does not require immediate payment after delivery of merchandise |
unsecured financing | financing that is not backed by collateral |