Test 3

Question 1

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

Answer 1

Lein-

Question 2

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

Answer 2

Limited Liability Corporation (LLC)-

Question 3

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

Answer 3

Line of Credit-

Question 4

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

Answer 4

Liquid Assets-

Question 5

The state agency that collects state taxes.

Answer 5

Louisiana Department of Revenue-

Question 6

How a business communicates to large numbers of customers, motivating them to learn more about the business and its offerings. Ex: advertising is a ______ tool.(TV, radio, flyers, social media)

Answer 6

Marketing-

Question 7

The date a loan is repaid in full.

Answer 7

Maturity-

Question 8

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

Answer 8

Mentor-

Question 9

The money a person borrows to buy real estate.

Answer 9

Mortgage-

Question 10

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

Answer 10

Mutual Fund-

Question 11

“Net” means revenues after costs.

Answer 11

Net Income-

Question 12

A payment that is owed every month.

Answer 12

Obligation-

Question 13

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

Answer 13

Online Credit-

Question 14

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.”

Answer 14

Overdraft-

Question 15

Costs that a business incurs that are not part of producing the goods or services it sells, but which are required to prorate legally and efficiently. EX: the salary the business pays its accountant is ________- these funds don’t help us sell more products, but you need your accountant to keep your financial records and submit all required filings.

Answer 15

Overhead-

Question 16

Owning an asset without any associated debt. EX: you paid off your car so you own it _________

Answer 16

Own “Free and Clear”-

Question 17

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

Answer 17

Partnership-

Question 18

The amount of money borrowed.

Answer 18

Principal-

Question 19

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

Answer 19

Pro Forma-

Question 20

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

Answer 20

Problem Solving-

Question 21

Revenues minus costs.

Answer 21

Profit-

Question 22

Unit price minus costs of goods sold.

Answer 22

Profits per Unit-

Question 23

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

Answer 23

Quarter-

Question 24

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

Answer 24

Real Estate-