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Unit 4
| Term | Definition |
|---|---|
| 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 the 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 the checks have been written |
| Collateral | property the borrower forfeits if he or she defaults on a loan |
| Cost 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's 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 of all sales after returns have been subtracted |
| Operating Expenses | the expenses necessary to operate a business |
| Owners equity | the difference between assets and liabilities |
| Periodic inventory method | involves taking a physical inventory of the merchandise |
| Perpetual inventory method | keeps track of inventory levels on a daily basis, using stock cards or a computer |
| 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 predetermined level of inventory when a 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 | costs that go up and down depending on the quantity of the good or service produced |
| Venture Capitalists | individuals or companies that make a profit investing in startup companies |
Created by:
DylanW52
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