block 1 Flashcards
- money owed by a company to a supplier. Ex. I purchase $10,000 of beauty supplies from a distributer to put in my store. The distributor gives me 60 days to pay it back. The $10,000 is now in accounts payable for my company meaning that I owe it to someone.
account payable
Money owed by a customer to a company. Ex. You purchased a new computer from me for $1,000. You put down $200 and signed a contract agreeing to pay the remaining $800 within the next30 days. That $800 goes into accounts receivable in my company meaning someone owes my company $800.
- Accounts Receivable
Individuals that make small investments in an enterprise or to support an entrepreneur where they do not expect an immediate or large return on the investment. They are typically friends and family who know business owner want to see them succeed
- Angel Investors
Something of a value. Anything owed. Ex. A house, a diamond ring. A security is a financial asset- a piece of paper that represent ownership in something and is worth money.
- Assets
- debt from a bank. Banks require much more information from potential borrowers, and take more time to make a lending decision based on a great deal of analysis. Therefore, bank loans are less expensive than online lines of credit.
- Bank Loan
a loan. A bond is a security that investors buy and sell, that represents a legal obligation from the company issuing the bond that they will repay the funds they received when they issued the bond.
Bond
- A determination of how many units are needed to sell in order to pay for all fixed costs.
- Breakeven Analysis
- A company that provides individuals and companies with access to financial markets. Ex You buy stocks and bonds from a broker.
- Brokerage
Proper business behavior beyond complying with legal requirements.
- Business Ethics
– Funds contributed by investors to a business. Investors contribute when the business succeeds.
- Capital (or Equity)
Expenditures on equipment the business will use for many years.
- Capital Expenditures
Total Revenues minus Total one-time expenditures (called “capital expenditures”) on equipment that will be used for many years.
- Cash Flow
Cash, publicly traded stocks, government bonds, or corporate bonds that can be quicky turned into cash. Cash instruments can be turned into cash at values that are predictable and available to all holders of the cash instruments. Ex Apple stock is a cash instrument because it can be sold and converted to cash immediately and the amount that anyone would get for that stock be the same.
- Clash Instruments
Equipment, inventory or other good that are pledged to the bank in the case the company cannot make a loan payment
- Collateral
The ability to interact in a friendly and effective way with unfamiliar people. The ability to seem welcoming and easy to talk to, even with people who are different in age, appearance, or background.
- Comfort Engaging with Strangers
