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401 Key Terms
Business Essentials
| Term | Definition |
|---|---|
| Accounting | The process of keeping and interpreting financial records |
| Accounts payable | All monies owned by the business to the others |
| Accounts receivable | Finance activity involving making decisions about financing firm's investments |
| Asset's | Anything of value that a business or individual owns |
| Capital budgeting | A process in which a firms financial managers determine which projects it should invest in |
| Capital investment decisions | Decisions that determine which projects a business will invest in, how the investment will be financed, and weather to pay dividends to share holders |
| Capital stuctre | A firm's mix of financially, usually some combination of dept and equity |
| Cash Conversation cycle | Ratio that prefers to the number of days between a company paying for raw materials and receiving cash from selling products made from those raw materials |
| Dept funding | Using money that is lent by a bank or other institution to finance a project |
| Dividend | A sum of money paid to an investor or stockholder aa earning s on an investment |
| Equity funding | Using money from investors to finance in a project in exchange for shares in the company |
| Finance | In business, the function that involves all the money and money management matters |
| Financing | Funding a business activity or project through dept, equity, or venture capital |
| Return on capital | A measure of how well a business generates cash flow in relation to the capital it has already invested in itself |
| Venture capital | Invested money used for a new business opportunities |
| Working capital mangement | Management of a firms current balance of assets and liabilities; involves accounts payable, receivable inventory, and cash |
| Accountant | AN individual who has had specialized training in accounting procedures |
| Accounting | The process of keeping financial records |
| Accounting cycle | A process or series o steps that business complete to maintain their financial records effectively |
| Accounting standards | Rules that accountant must follows when preparing financial statements |
| Accounting system | The methods and procedure used in constantly handling the business |
| Accrual accounting method | A method of accounting that records transactions at the time they occur even if no money changes hands at the time |
| Assets | Anything of value |
| Balance sheet | A financial statement that captures the financial condition of thus business at that particular moment |
| Bookkeeping | The steps of the accounting cycle that involve recording each business transaction; the process of analyzing financial transactions, journalizing transactions, posting to ledgers, balancing the book |
| Cash | Currency and coins |
| Cash accounting method | An accounting method in which income and expenditures are recorded at the time the money changes hands |
| Cash flow statement | A financial with estimates as to when, where, and how much money will flow into and out of a business |
| Credit | The arrangement by which business or individuals can purchase now and pay later |
| Expenditures | The monies that business spends; also called expenses |
| Expenses | The monies that business spends; also called expenditures |
| Financial accounting | A type of accounting that involves preparing and reporting financial data to external users who are not directly involved in business |
| Financial statement | A summary of accounting information |
| Income | Money received by a business or an individual from outside sources |
| Income statement | A financial summary that shows how much money the business has made or has lost; also called the profit-and-loss statement |
| Investors | Those who invest their funds in a business; may be owners or stockholders |
| Journal | A special book or computer program in which a business's transactions are recorded in the order in the order in which they occur |
| Ledger | The accounting record for a specific department or area of the business |
| Liabilities | Depts that the business owes |
| Managerial accounting | A type of accounting that involves preparing and reporting financial data to internal users, usually managers, who need financial information to control day-to-day operations and to make decision and plans affecting the business |
| Net worth | The total value of the business |
| Owners' equity | The amount an owner has invested in the business plus or minus profits and losses |
| Transaction | A business activity such as a sale, a purchase, or a return |
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Pablo-
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