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Unit 5
Question | Answer |
---|---|
Assets= Liabilities+ Capital | Accounting Equation |
money owed for credit purchases | Accounts payable |
the amount owed by customers | Accounts receivable |
things owned, such as cash and buildings | Assets |
a financial statement that lists the assets, liabilities, and capital of a business | Balance Sheet |
an institution that accepts demand deposits and makes commercial loans | Bank |
a long-term written promise to pay a definite sum of money at a specific time | Bond |
provides payment damages to people who have losses resulting from the negligence or dishonesty of a employee or from the failure of the business to complete a contract | Bonding |
the value of a share of stock that is found by dividing the net worth (assets minus liabilities) of the corporation by the total number of shares outstanding | Book value |
a financial plan extending usually for one year | Budget |
earning power | Capacity |
what a business is worth after subtracting liabilities from assets | Capital |
a savings account that requires an investor to deposit a specified sum for a fixed period at a fixed interest rate | Certificate of Deposit (CD) |
an indication of one's moral obligation to pay debts | Character |
a written order on a financial institution to pay previously deposited money to a third party on demand | Check |
property a borrower pledges to assure repayment of a loan | Collateral |
a loan made to a business | Commercial loan |
ownership that gives holders the right to participate in managing the business by having voting privileges and by sharing in the profits (dividends) if there is any | Common Stock |
allows business to electronically transfer employees' paychecks directly from the employer's bank account to employees' bank accounts | Direct deposit |
offers payments to employees who are no longer able to work because of accident or illnesses | Disability insurance |
transferring money by computer rather than by check | Electronic Fund Transfer (EFT) |
the signature--usually on the back-- that transfers a negotiable instrument | Endorsement |
money invested in the business by its owner or owners | Equity Capital |
reports that summarize financial data over a period of time | Financial statements |
provides protection against the expenses of health care | Health insurance |
a financial document that reports total revenue and expenses for a specific period | Income statement |
the first time a company sells stock to the public | Initial Public Offering (IPO) |
credit used when a costumer makes sizable purchase and agrees to make payments over an extended but fixed period of time | installment credit |
a risk management tool that limits financial loss from uncontrollable events in exchange for regular payments | insurance |
an organization that specializes in the sale of a variety of stocks, bonds, and other securities | investment companies |
claims against assets or things owned; debts of a business | Liabilities |
provides protection for risks involved in operating a business | Liability insurance |
provides money that is paid upon death of the insured to a person pr people identified in the insurance policy | life insurance |
a type of liability insurance that protects against financial loss arising form suits for negligence in providing professional services | malpractice value |
the value at which stock is bought and sold on any given day | Market value |
each insurance company is required to pay losses of its insured when an accident occurs, regardless of who might have been responsible fro the loss | No-fault insurance |
an institution that offers on demand deposits or commercial loans, but not both | non-bank financial institutions |
ownership that gives holders preference over the common stockholders when disturbing dividends or assets | preferred stock |
the lowest rate of interest; rate at which large banks loan large sums to the best-qualitied borrowers | Prime rate |
an unconditional written promise to pay a certain sum of money, at a particular time or on demand, to the oder of one who has obtained the note. | Promissory note |
the uncertainty that a loss may occur | Risk |
an account that allows customers to make deposits, earn interest, and make withdrawals at any time without financial penalties | savings account |
a loan that requires the borrower to pledge something of value as security | secured loan |
stocks and bonds | Securities |
a credit and debit card with a memory that stores financial, health, credit, and other kinds of data that can be read by computers | Smart card |
a share of ownership in corporation | Stock |
a professional who buys and sells corporate securities for customers through a stock brokerage firm and gives investment advice | Stockbroker |
a loan that is not backed by collateral | Unsecured Loan |
an investor or investment group that lends large sums of money to promising, new, or expanding small companies | venture capitalist |
the difference between current assets and current liabilities | working capital |