Mod 1 Business

Question 1

Sole Proprietorship

Answer 1

Business that is owned (and usually operated) by one person

Question 2

Partnership

Answer 2

A relationship between 2 or more individuals who join together to carry on a trade or business

Question 3

General Partner

Answer 3

A person who shares responsibility for operating a business, and unlimited liability for the debts of the business

Question 4

Limited Partner

Answer 4

A person who invests money in a business but has no management responsibility or liability for losses beyond the amount he or she invested in the partnership

Question 5

Corporation

Answer 5

An artificial person created by law with most of the legal rights of a real person, including the rights to start and operated business, to buy or sell property, to borrow money, to sue or be sued, and to enter into binding contracts

Question 6

Public Corporation

Answer 6

A corporation whose shares are widely held and available to the general public

Question 7

Private Corporation

Answer 7

A coporation whose number of shareholds is limited; normally resricts the transfer of shares to thrid parties, and shares do not trade on a recognized stock exchange

Question 8

Pass-Through Taxation

Answer 8

Occurs when a owner’s share of busniess profit is reported on his or her individual tax return, as in an unincorporated business (sole proprietorship or partnership)

Question 9

Corporation (dual) Taxation

Answer 9

Occurs when profits of a business are taxed at the entity level before profits are distributed to owners; distributions are reported on the owners’ individual tax returns as dividends and are taxed a second time

Question 10

Unlimited Liability

Answer 10

A legal concept that holds a business owner personally responsible for all the debts of the business

Question 11

Limited Liability

Answer 11

A feature that limits each owner’s financial liability to the amount of money that she or he has invested in the business

Question 12

Entrepreneurial Spirit

Answer 12

Being aware of entrepeneurial activity, perceiving there are good opportunities, and believing in your ability to start a business

Question 13

Intrapreneurs

Answer 13

Employees who bring an entrepreneurial spirit to their organization

Question 14

Business Plan

Answer 14

A wtitten document that describes the opportunity, goals, and plans for a business

Question 15

Business Model

Answer 15

Explains hwo the business will make money

Question 16

Angel Investor

Answer 16

Private individuals who invest money in exchange for ownership in a company

Question 17

Venture Capital (VC)

Answer 17

Companies that invest money in high-growth companies that have the potential to become large and successful

Question 18

Crowdfunding

Answer 18

When entrepreneurs invite people to contribute to a business or project, usually via an online platform

Question 19

Franchise

Answer 19

A licence to operate an individually owned business as if it were part of a chain of outlets or stores.

Question 20

Franchising

Answer 20

The actual granting of a franchise

Question 21

Franchisor

Answer 21

An individual or organization granting a franchise

Question 22

Franchisee

Answer 22

A person or organization purchasing a franchise

Question 23

Accounting

Answer 23

The process of collecting, analyzing, and reporting financial information

Question 24

Managerial Accounting

Answer 24

Provides information for managers within an organization to make decisions about a company’s financing, investing, marketing, and operating activities

Question 25

Financial Accounting

Answer 25

Provides information for people outside an organization through the generation of standardizing financial statements

Question 26

Generally Accepted Accounting Principle (GAAP)

Answer 26

The financial accounting rules, standards, and usual practices followed by accountants in Canada when preparing financial statements until Jan 2011

Question 27

International Financial Reporting Standards (IFRS)

Answer 27

A set of globally accepted accounting standards adopted in Canada on Jan 1 2011 for public companies and those private companies that chose of adopt them

Question 28

Accounting Standards for Private Enterprises (ASPE)

Answer 28

Accounting standards similar to the former Canadian GAPP for provide privates companies (Unless the private companies choose to use IFRS)

Question 29

Balance Sheet (or Statement of Financial Position)

Answer 29

A financial statement that provides a snapshot of a company’s financial position by stating assets, liabilities, and owner’s equity

Question 30

Income Statement (or statement of income)

Answer 30

A financial statement that provides a summary of how much a company earned over a period of time; summarizes revenue, expenses, and net income (or loss)

Question 31

Statement of Cash Flows (or Cash Flow Statement)

Answer 31

A financial statement that illustrates how the company’s operating, investing, and financing activities affect cash over a period of time

Question 32

Cost Of Goods Sold (COGS)

Answer 32

The cost of producing or purchasing products for sale; typically varies directly with sales volume or production volume

Question 33

Operating Expense

Answer 33

Ongoing business expenses such as rent, salaries, utilities, and marketing expenses’ these often do not change in direct relation to changes in sales volume

Question 34

Financial Ratio

Answer 34

A number that shows the relationship between 2 elements of a company’s financial statements; allows for a fairer comparison between current financial results and results form previous periods or industry competitors

Question 35

Return On Sales

Answer 35

A financial ratio that measures profitability by dividing net income by revenue

Question 36

Current Ratio

Answer 36

A financial ratio that measures liquidity by dividing current assets by current liabilities

Question 37

Debt-To-Equity Ratio

Answer 37

A financial ratio that measures leverage by dividing total liabilities by owners’ equity