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SBModule6
Financial Planning
| Question | Answer |
|---|---|
| Balance sheet | A financial statement that shows what a business owns, what it owes, and how much it is worth at a particular point in time. |
| Assets | Items of value owned by the business. |
| Current assets | Cash or items of monetary value that can easily be converted to cash and that are used up by a business within one year. |
| Inventory | The quantities of goods and materials on hand. |
| Supplies | Assets that are used up in business operations. |
| Accounts receivable | Sales that have been made but not collected. |
| Fixed assets | Items of monetary value that are not easily converted into cash. |
| Intangible assets | Items of value that the business owns that cannot be seen or touched |
| Copyright | Legal right to exclusive publication, production, sale, or distribution of a literary or artistic work. Copyrights remain in effect for 70 years after the death of the author. |
| Patent | A legal document that gives an inventor the sole right to produce, use, and sell an invention. A patent lasts for 20 years. |
| Trademark | A name, symbol, or special mark that, when registered, can be used only by a certain business. |
| Goodwill | Customers' approval and support of a business. |
| Liabilities | The debts owed by the business |
| Current liabilities | Financial obligations that will be repaid within one year. |
| Accounts payable | Expenses that have been incurred but not yet paid. |
| Notes payable | Amounts owed for small loans. (Example |
| Salaries payable | Wages owed to employees. |
| Income taxes payable | Monies due to the government. |
| Long-term liabilities | Financial obligations that will take the business more than one year to repay. |
| Mortgage | A loan for purchasing a building and or land. |
| Notes payable | Amounts owed for large loans. (Example |
| Net worth | The monetary value of the business; assets minus liabilities. |
| Income statement | A financial statement that shows the income, expenses, and profit/loss for the business over a period of time, usually a year. |
| Gross sales | The dollar amount of all sales, usually within a one-year period. |
| Net sales | Gross sales minus returned goods. |
| Cost of goods sold | The dollar amount a company pays to purchase a product for resale. |
| Gross profit on sales | Net sales minus the cost of goods sold. |
| Expenses | All costs associated with running a business except for the cost of goods sold. |
| Variable expenses | Business expenses that may change from month to month. |
| Fixed expenses | Business expenses that do not change month-to-month, but rather remain the same for a period of time. |
| Net income | The amount of money left after all costs and expenses have been deducted. |
| Taxes | Money owed to the government; calculated on the net income because the net income represents the true profit of the business; listed below the net income and subtracted from the net income to show net income after taxes |
| Cash flow statement | A monthly financial report for internal use that describes the flow of money into and out of the business. |
Created by:
mrsljohnson
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