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Unit 4
Financial Management
| Question | Answer |
|---|---|
| Assets | items of value owned by a business |
| 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 |
| break-even point | volume of sales that must be made to cover all the expenses of a business |
| cash flow statement | an accounting report that describes that cash that flows in and out of a business |
| check register | a book in which one records the dates, amounts, and names of people to whom checks have been written |
| collateral | property the borrower forfeits if he or she defaults on a loan |
| costs of goods sold | the cost of the inventory a business sells during a particular period |
| debt capital | money loaned to a business with the understanding that the money will be repaid, with interest, in a certain time period |
| equity capital | money invested in a business in return for a share in the business profits |
| fixed costs | fees that must be paid regardless of how much of a good or service is produced |
| general journal | used to record any kind of transaction |
| general ledger | used to post items that are recorded in journals; ledgers separate transactions by account, allowing business |
| gross profit | profit before operating expenses are deducted |
| gross sales | the dollar amount of all sales, including returns |
| income statement | a financial statement that shows a business's revenue, expense, and profit over a period of time, usually a year |
| interest | an amount charged for borrowing money |
| inventory | the stock of goods a business has for sale` |
| journals | accounting records of the business transactions made |
| liability | money owed to others |
| marginal benefit | a measurement of the advantages of producing one additional unit of a good or service |
| markdown | an amount deducted from the retail price to determine the sales price |
| mark up | an amount added to the cost to determine the sales price |
| net profit before taxes | the amount remaining after costs of goods sold and operating expenses are subtracted from sales |
| net sales | the dollar amount remaining after costs of goods sold and operating expenses are subtracted from sales |
| operating expenses | the dollar amount of all sales after returns have been subtracted |
| owners equity | the difference between assets and liability |
| periodic inventory method | involves taking a physical inventory of the merchandise |
| perpetual inventory method | keeps track of inventory levels on a daily basis for interest earned or paid |
| principle | amount of money borrowed in a loan |
| rate of interest | the percent that is the basis for interest earned or paid |
| reorder point | a predetermind level of inventory when new stock must be purchased |
| sales | the dollar value of the goods and services a business gives to customers over a certain period of time |
| term | number of years for which a loan is extended |
| variable costs | cost that go up and down depending on the quantity of the good or service produced |
| venture capitalist | individuals or companies that make a profit investing in start up comapinies |
Created by:
megangreenway
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