Chapter 17 Flashcards
The amount of money earned over and above the amount spent to keep the business operating
Profit
An economic system in which people can choose what they buy, what they produce and sell, and where they work
Free enterprise system
A written proposal that describes a new business and strategies to launch that business
Business plan
A written outline of the business goal and the steps to take to achieve them
Strategic plan
A written outline of how the business will be promoted to increase customers and sales
Marketing plan
A written outline of how the business will get money to start up and operate, and how the business will maintain financial operations and business records
Financial plan
The systematic process of recording and reporting the financial position of a business
Accounting
Any activity that has an effect on the financial situation of a business
Transaction
A standard set of guidelines for reporting and recording financial changes in a business
Generally accepted accounting principles (GAAP)
A formal, written statement of expected income and expenses for a future period of time
Budget
The goods retailers buy with the intent to resell to customers
Merchandise
The merchandise retailers have for sale
Inventory
The amount of cash that is available at any given time
Cash flow
When a business spends more than it receives
Negative cash flow
