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Business 120 > Chapter 16 > Flashcards

Chapter 16 Flashcards

1
Q

A high level corporate executive who manages a firms finances and reports directly to the companies chief executive officer of president

A

Chief financial officer (CFO)

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2
Q

Money that will be used for one year or less

A

Short-term financing

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3
Q

The movement of money into and out of an organization

A

Cash flow

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4
Q

The time lag between the actual production of goods and when the goods are sold

A

Speculative production

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5
Q

Money that will be used for longer than one year

A

Long-term financing

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6
Q

A ratio based on the principle that a high risk decision should generate higher financial returns for a business and more consecutive decisions often generate lower returns

A

Risk-return ratio

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7
Q

A plan for obtaining and using the money needed to implement an organizations goals and objectives

A

Financial plan

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8
Q

A financial statement that projects income, expenditures, or both over a specified future period.

A

Budget

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9
Q

A financial statement that estimates cash receipts and cash expenditures over a specified period

A

Cash budget

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10
Q

A budgeting approach in which every expense in every budget must be justified

A

Zero-base budgeting

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11
Q

A financial statement that estimates a firms expenditures for major assets and its long term financial needs

A

Capital budget

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12
Q

Money received from the owners or from the sales of shares of ownership in a business

A

Equity Capitol

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13
Q

Narrowed money obtained through loans of various types

A

Debt Capitol

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14
Q

A document stating that the bank will pay the depositor a gaurenteed interest rate on money left on deposit for a specified period of time

A

Certificate of deposit (CD)

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15
Q

A written order for a bank or or other financial institution to pay a stated dollar amount to the business or person indicated on the face of the check

A

Check

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16
Q

A loan that is approved before the money is actually needed

A

Line of credit

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17
Q

A guarenteed line of credit

A

Revolving credit agreement

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18
Q

Real estate or property pledged as security for a loan

A

Collateral

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19
Q

A card that electronically subtracts the amount of a customers purchase from his or her bank account at the moment the purchase is made

A

Debit card

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20
Q

A means of preforming financial transaction through a computer terminal

A

Electronic funds transfer (EFT) system

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21
Q

A legal document issued by a bank or other financial institution guaranteeing to pay a seller a stated amount for a specified period of time

A

Letter of credit

22
Q

A written order for a bank to pay a third party a stated amount of money on a specific state

A

Bankers acceptance

23
Q

Financing that is not backed by collateral

A

Unsecured financing

24
Q

A type of short term financing extended by a seller who does not require immediate payment after delivery of merchandise

A

Trade credit

25
Q

A written pledge by a narrower to pay a certain sum of money to a creditor at a specified future date

A

Promissory note

26
Q

The lowest Rate charged by a bank for a short term loan

A

Prime interest rate

27
Q

A short term promissory note issued by a large corporation

A

Commercial paper

28
Q

A firm that specializes in buying other firms accounts receivable

A

Factor

29
Q

Occurs when a corporation sells common stock to the general public for the first time

A

Initial public offering (IPO)

30
Q

A market in which an investor purchases financial securities( via an investment bank) directly from the user of those securities

A

Primary market

31
Q

An organization that assets corporations in raising funds usually by helping to sell new issues of stocks bonds or other financial securities

A

Investment banking firm

32
Q

A market for existing financial securities that are traded between investors

A

Secondary market

33
Q

A marketplace where member brokers meet to buy and sell securities

A

Securities exchange

34
Q

A network of dealers who buy and sell the stocks of corporations that are not listed on a securities exchange

A

Over-the-counter (oTC) market

35
Q

Stock whose owners may vote on corporate matters but whose claim on profits and assets is subordinate to the claims of others

A

Common stock

36
Q

Stock whose owners usually do not have voting rights but whose claims on dividends and assets are paid before those of common stock owners

A

Preferred stock

37
Q

The proportion of a corporations profits not distributed to stock holders

A

Retained earnings

38
Q

Occurs when stock and other corporate securities are sold directly to insurance companies pension funds or large institutional investors

A

Private placement

39
Q

The use of borrowed funds to increase the return on owners equity

A

Financial leverage

40
Q

A promissory note that requires a narrower to repay a loan in monthy quarterly or semiannual or annual installments

A

Term-loan agreement

41
Q

A corporations written pledge that it will repay a specified amount of money with interest

A

Corporate bond

42
Q

The date on which a corporation is to repay barrowed money

A

Maturity date

43
Q

A bond registered in the owners name by the issuing company

A

Registered bond

44
Q

All the activities concerned with obtaining money and using it effectively

A

Financial management

45
Q

A bond backed only by the reputation of the issuing corporation

A

Debenture bond

46
Q

A corporate bond secured by various assets of the issuing firm

A

Mortgage bond

47
Q

A bond that can be exchanged at the owners option for a specified number of shares of the corporations common stock

A

Convertible bond

48
Q

A legal document that details all the conditions relating to a bond issue

A

Bond indenture

49
Q

Bonds of a single issue that mature on different dates

A

Serial bonds

50
Q

A sum

Of money to which deposits are made each year for the purpose of redeeming a bond issue

A

Sinking fund

51
Q

An individual or an independent firm

That acts as bond owners representative

A

Trustee

Business 120 (15 decks)

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