Entrep 8-9

Question 1

This is the energy that keeps your business flowing

Answer 1

Cash

Question 2

This shows you sales and profits over a period of time

Answer 2

Income Statement

Question 3

This is a snapshot of your business. It shows your assets and liabilities and net worth at a moment in time.

Answer 3

Balance sheet

Question 4

This summarizes the cash coming into and going out of it over a specified time frame.
(Calculate a cash balance by subtracting cash disbursements from cash receipts and starting cash.)

Answer 4

Cash Flow statement

Question 4

This is federal tax that business owners are assessed on wages paid to themselves.

Answer 4

Self Employment Tax

Question 5

This means that they are overdrawn in one or more
of their bank accounts.

Answer 5

negative cash balance

Question 5

These are adjustments to asset values not involving cash, such as depreciation and amortization.

Answer 5

Non Cash Expenses

Question 5

This the value of current assets minus current liabilities.

Answer 5

Working Capital

Question 5

What is the Cashflow Equation and Its 3 categories?

Answer 5

Cash Flow = Cash on Hand + Cash Receipts − Cash Disbursements

1. Operations. Money used to run the business.
2. Investment. Money going into (equity) and out of investments in the
   business, such as equipment, vehicles, or real estate.
3. Financing. Debt used to finance the business.

Question 5

This is a risk of inventory where it is theft of inventory

Answer 5

Pilferage

Question 6

This is the ability to borrow money

Answer 6

Credit

Question 6

3 Functions of Cash flow statement in the module

Answer 6

Record all sources of income.
Reporting cash outflows, or necessary disbursements
It shows the net change in cash flow and the ending cash
balance.

Question 6

This provides cash to companies in exchange for the rights to the cash that will be collected from their customers.

Answer 6

Receivables financing, or factoring

Question 6

This will help you understand the cash flow required for
investments and the expected impact on operating cash flows.

Answer 6

Capital Budgeting

Question 6

1. When prices rise, a dollar tomorrow will buy less than a dollar does today.
2. When you put money into an investment, there is always some risk of losing it.
3. When you put money into an investment, you are
   giving up the opportunity to use it for what might be a better
   investment.

Answer 6

1. Inflation.
2. Risk.
3. Opportunity

Question 7

This is the pace at which a company must spend capital before generating positive cash flow.

Answer 7

Burn Rate

Question 7

This is the amount an asset will be worth a number of periods from the present.

Answer 7

Future Value

Question 8

Money making money, is the essence of investment. This is called?

Answer 8

Compound Interest

Question 9

This is the act of providing or raising funds (capital) for a purpose

Answer 9

Financing

Question 9

This is the person or organization that is owed money.

Answer 9

Creditor

Question 9

This is the amount of risk or threat of loss that an individual is willing to sustain

Answer 9

Risk Tolerance

Question 10

This is an assessment levied by governments on purchases and collected by merchants

Answer 10

Sales Tax

Question 11

This is a legal reduction in taxes.
This is a tax credit direct reduction of taxes.

Answer 11

Tax abatements
Tax credits

Question 12

This is a document agreeing to repay a certain sum of money
(with interest) by a specified date.

Answer 12

Promissory note

Question 12

This is the promise to pay issued by an individual. (Along with assurance that you’ll take personal responsibility ofc)

Answer 12

Personal Guarantee

Question 12

is the amount you will have to pay over a given period of time, until the loan is repaid.

Answer 12

Debt Service

Question 13

This the amount of debt or loan before interest and fees are added.

Answer 13

Principal

Question 13

This word means that the business is financed by debt,
as opposed to equity

Answer 13

Leveraged

Question 14

The results of a borrower failing to meet the
repayment agreement on a debt.

Answer 14

Default

Question 14

This is a loan made against an insurance policy with cash value.

Answer 14

Policy Loan

Question 14

1. An investment instrument representing ownership in an entity (stock) or debt (bond) held by an investor.
2. The date at which a loan must be repaid, including when a bond must be redeemed by the issuer.

Answer 14

1. Security
2. Maturity

Question 14

5 c’s of Credit

Answer 14

1. Collateral
2. Character
3. Capacity
4. Capital
5. Conditions

Question 14

This is a wealthy individual who invests in businesses.

Answer 14

Angel Investor

Question 14

This is the record of how reliably and punctually you have repaid past loans.

Answer 14

Credit History, obtained through Credit Reporting Agency

Question 15

This is credit extended by a company allowing qualified customers
to make purchases up to a specified limit, without paying
cash at the time of purchase.

Answer 15

Charge Account

Question 15

The time between a payment transaction and when the cash is actually in the payee’s account.

Answer 15

Float

Question 15

financing a business by creatively stretching existing capital as far as possible, including extensive use of the entrepreneur’s time.

Answer 15

Bootstrap Financing

Question 15

A single unit of corporate stock.

Answer 15

Share

Question 15

1. Shares of company ownership (equity).
2. Loans (debt) made to companies or government entities for more than one year.
3. Savings accounts, Treasury bills, or other investments that can
   be liquidated (turned into cash) within 24 hours.

Answer 15

1. Stocks.
2. Bonds.
3. Cash.