Chapter 18

Question 0

Start up capital

Answer 0

The money required to start your business

Question 1

Capital

Answer 1

The money you will need to establish a business, operate it for the first few months, and expand it once it stabilizes

Question 2

Start up costs

Answer 2

The costs of your fees involved in establishing your business

Question 3

Operating capital

Answer 3

The amount of capital needed to operate a business for the first few months or year

Question 4

Financial forecasting

Answer 4

The process of estimating a business’s operating capital

Question 5

Projected financial statements

Answer 5

Statements that predict the the financial position of a business in the months and years to come

Question 6

Fixed expenses

Answer 6

Expenses that remain the same regardless of business activity

Question 7

Variable expenses

Answer 7

Expenses that may change

Question 8

Reserve capital

Answer 8

Money that is set aside for unexpected costs or opportunities

Question 9

Chart of accounts

Answer 9

A list of all the general ledger accounts that a business will use