MicroEnterprise study guide 1

Question 1

Means small business

Answer 1

Micro-Enterprise

Question 2

What are the five steps to obtaining a Micro-Enterprise certification

Answer 2

1. Self-assessment
2. Self-assessment presentation
3. Micro-Enterprise Credit Application-
4. Company registration
5. Credential online test

Question 3

Baton Rough Area Chamber are the creators of the micro-enterprise certification

Answer 3

BRAC-

Question 4

online program that provides unlimited access to industry experts in all careers.

Answer 4

Neprise

Question 5

money owed by a company to a supplier. EX. I purchase $10,000 of beauty supplies from a distributor to put in my store. The distributer gives me 60 days to pay it back. The $10,000is now in accounts payable for my company meaning that I owe it to someone.

Answer 5

Accounts Payable

Question 6

Money owed by a customer to a company. Ex. You purchased a new computer from me for 1,000. You put down $200 and signed a contract agreeing to pay the remaining $800 within the next 30 days. That $800 goes into accounts receivable in my company meaning someone owes my company $800.

Answer 6

Accounts Receivable

Question 7

Individuals that make small investments is an enterprise or to support an entrepreneur where they do not expect an immediate or large return on the investment. They are typically friends and family who know the business owner and want to see them succeed.

Answer 7

Angle Investors-

Question 8

Something of value. Anything owned. Ex. A house, a diamond ring. A security is a financial asset- a piece of paper that presents ownership in something and is worth money.

Answer 8

. Assets-

Question 9

Debt from a bank. Banks require much more information from potential borrowers, and take more time to make a lending decision based on a great deal of analysis. Therefore, bank loans are less expensive than online lines or credit.

Answer 9

Bank Loan-

Question 10

Debt from a bank. Banks require much more information from potential borrowers, and take more time to make a lending decision based on a great deal of analysis. Therefore, bank loans are less expensive than online lines or credit.

Answer 10

Bank Loan-

Question 11

A bond is a security that investors buy and sell, that represents a legal obligation from the company issuing the bond that they will repay the funds they received when they issued the bond.

Answer 11

Bond- A loan

Question 12

a determination of how many units are needed to sell in order to pay for all fixed costs.

Answer 12

Breakeven Analysis

Question 13

A Company that provides individuals and companies with access to financial markets. Ex you must buy stocks and bonds from a broker.

Answer 13

Brokerage

Question 14

Proper business behavior beyond complying with legal requirements

Answer 14

Business Ethics

Question 15

Funds contributed by investors to a business. Investors contribute capital to a business because they expect a significant return on their investment when the business succeeds.

Answer 15

Capital (or Equity)-

Question 16

Expenditures on equipment the business will use for many years

Answer 16

Capital expenditures-

Question 17

Total Revenues minus Total cost minus one time expenditures (called “capital expenditures”) on equipment that will be used for many years.

Answer 17

Cash flow-

Question 18

cash, publicly traded stocks, government bonds, or corporate bonds that can be quickly turned into cash. Cash instruments can be turned into cash at values that are predictable and available to all holders of the cash instrument. Ex Apple stock is a cash instrument because it can be sold and converted to cash immediately and the amount that anyone would get for that stock would be the same

Answer 18

. Cash Instruments

Question 19

Equipment, inventory or other goods that are pledged to the bank in the case the company cannot make a loan payment.

Answer 19

Collateral

Question 20

The ability to interact in a friendly and effective way with familiar people. The ability to seem welcoming and easy to talk to, even with people who are different in age, appearance, or background.

Answer 20

Comfort Engaging with Strangers

Question 21

Money earned when something is sold

Answer 21

Commission

Question 22

A promise to keep information you learn secret. This promise is often formalized by singing a Non-Disclosure Agreement (or NDA).

Answer 22

Confidentiality-

Question 23

• a situation in which an individual might take an action to his/her advantage that would be to the disadvantage of a person or company that believes this individual is serving them. Ex. A customer tells a supplier in confidence that they are buying a large quantity of a specific product to advertise a major sale in two weeks. It would be a conflict of interest for that supplier to go to the competitor stores and use this information to get then to buy more if this product and put in on sale immediately.

Answer 23

Conflict of interest

Question 24

• price minus cost of goods sold.

Answer 24

Contribution Margin

Question 25

actions entrepreneurs and companies take that go beyond their financial self-interest Ex. A local pet store makes a large donation to an animal shelter.

Answer 25

Corporate social Responsibility-

Question 26

a corporation is a person in the eyes of the law. The corporation is taxed for profits and is liable for any debts or judgements. Corporations are owned by shareholders (individuals or other corporations).

Answer 26

Corporation

Question 27

• Costs that make up one unit of what you sell. These can be labor costs as well as material costs. Ex. When you sell a hat, the variable costs includes: the hat’s material and the labor costs required to make the hat.

Answer 27

Costs of goods sold

Question 28

• a loss that an insurance company will reimburse a policyholder for in the event of a claim.

Answer 28

Covered Loss

Question 29

funds lent to a business with an agreement that the business will repay the lender with interest.

Answer 29

Credit (or Debt)-

Question 30

• a person or a business with a strong credit score and the financial resources that make it likely they will be able to repay any loan.

Answer 30

Credit –Worthiness