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EIA-9
Chapter 9
Term | Definition |
---|---|
net worth | the difference between what you own, called assets, and what you owe, called liabilities |
debt-to-equity ratio | the relation between the dollars you have borrowed (debt) and the dollars you have invested in your business (equity) |
equity capital | money invested in a business in return for a share in the profits of the business |
venture capitalist | are individuals or companies that make a living investing in startup companies |
debt capital | money loaned to a business with the understanding that the money will be repaid, usually with interest |
collateral | property that the borrower forfeits if he or she defaults on the loan |
SBA | Small Business Administration |
HUD | Housing and Urban Development |
cash flow statement | an accounting report that describes the way cash flows into and out of your business over a |
income statement | shows the business’s revenues and expenses incurred over a period of time and the resulting profit or loss |
balance sheet | a financial statement that lists what a business owns, what it owes, and how much it is worth at a particular point in time |
cash method | revenue is not recorded until cash (or a check) is actually received, and expenses are not recorded until they are actually paid |
accrual method | transactions are recorded when the order is placed, the item is delivered, or the service is provided, regardless of when the money is actually received or paid |
transaction | any business activity that changes assets, liabilities, or net worth |
journals | accounting records of the transactions you make |
account | an accounting record that provides financial detail for a particular business item, such as for cash, sales, rent, and utilities |
check register | a booklet in which you record the dates and amounts of the checks as well as the names of people or businesses to whom you have written the checks |
payroll | a list of people who receive salary or wage payments from a business |