Micro-Enterprise Test Three

Question 1

To obtain the regional micro-enterprise credential you must complete five components.

Answer 1

1. Self-assessment - complete two-part self- assessment.
2. Self-assessment presentation – presentation to an unfamiliar workplace adult.
3. Micro-Enterprise Credit Application – complete online credit application.
4. Company Registration – register a fictitious business on GeauxBiz student portal.
5. Credential Online Test – online certification exam.

Question 2

Lien

Answer 2

The right to take possession of collateral until a debt is repaid.

Question 3

Limited Liability Corporation (LLC)

Answer 3

A special type of corporation where individual owners (or members) are taxed on the profits of the company, but the corporation (not the member) is liable for debts or judgments against the company.

Question 4

Line of credit

Answer 4

A loan that provides the borrower a maximum amount of money he/she can borrower – the borrow can then access or use that line of credit for only as much as they need at any particular time.

Question 5

Overhead

Answer 5

costs that a business incurs that are not part of producing the goods or services its sells, but which are required to operate legally and efficiently.

Question 6

Mutual Fund

Answer 6

An investment security that includes many different stocks purchased and held together. Investors purchase mutual funds because they are less risky than holding any individual stock.

Question 7

Liquid Assets

Answer 7

Cash or securities that can be immediately turned into cash, which can then repay any loan amount outstanding

Question 8

Louisiana Department of Revenue

Answer 8

The state agency that collects state taxes.

Question 9

Marketing

Answer 9

How a business communicates to large numbers of customers, motivating them to learn more about the business and its offerings. Ex. Advertising is a marketing tool. (TV, Radio, Flyers)

Question 10

Maturity

Answer 10

The date a loan is repaid in full.

Question 11

Mentor

Answer 11

A person who coaches and supports an entrepreneur or a student studying to become an entrepreneur.

Question 12

Mortgage

Answer 12

The money a person borrows to buy real estate.

Question 13

Net Income

Answer 13

“Net” mean revenues after costs.

Question 14

Obligation

Answer 14

A payment that is owed every month.

Question 15

Online Credit

Answer 15

Debt obtained from a number of online companies. Borrowers need to disclose much less information about themselves to obtain online credit, and online credit companies make credit decisions much more quickly than banks. For these reasons, online credit is much more expensive for borrowers than bank loans.

Question 16

Overdraft

Answer 16

When a company issues a check or makes a financial commitment for an amount greater than the amount the company has deposited in the bank. Also called a “bounced check”.

Question 17

Own “Free and Clear”

Answer 17

Owning an asset without any associated debt.

Question 18

Partnership

Answer 18

When two or more individuals own company. Partners are taxed on the profits of the company, and are personally liable for any debts or judgments against the company.

Question 19

Principle

Answer 19

The amount of money borrowed.

Question 20

Pro Forma

Answer 20

A Latin phrase (for the sake of form) that in business means a projection of future financial performance. A pro forma usually takes the form of a projection of future revenues and costs.

Question 21

Problem Solving

Answer 21

The ability to find solutions to difficult or complex issues. The process of working through the details of a challenge or crisis – often under pressure – to reach a solution.

Question 22

Profit – Revenues minus costs.

Answer 22

Revenues minus costs.

Question 23

Profits per Unit

Answer 23

Unit price minus cost of goods sold.

Question 24

Quarter

Answer 24

Most projections are for a year. A “quarter” means three months. Some businesses make quarterly reports.

Question 25

Real Estate-

Answer 25

Real estate is property and the building(s) on it. Real estate can be a piece of land, or can be a home on that piece of land, or it can be a building. Real estate is typically purchased using a mortgage. The down payment the buyer makes is called the buyer’s “equity.

Question 26

Secured Debt

Answer 26

Debt that includes a legal obligation by the borrower to repay the debt personally if the business is unable to make its scheduled debt payment. A secured debt can be guaranteed by the entrepreneur or by any credit-worthy guarantor.