test 3

Question 1

lien

Answer 1

the right to take possession of collateral until debt is repaid.

Question 2

limited liability corporation (LLC)

Answer 2

a special type of corporation where individual owners (or members) are taxed on the profits of the company

Question 3

line of credit

Answer 3

a loan that provides the borrower a maximum amount of money he/she can borrow

Question 4

liquid assets

Answer 4

cash or securities that can be immediately turned into cash

Question 5

Louisiana department of revenue

Answer 5

the state agency that collects state taxes

Question 6

marketing

Answer 6

how a business communicates to large numbers of customers, motivating them to learn more about the business and its offerings

Question 7

maturity

Answer 7

the date a loan is repaid in full

Question 8

mentor

Answer 8

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

Question 9

mortgage

Answer 9

the money a person borrows to buy real estate

Question 10

mutual fund

Answer 10

an investment security that includes many different stocks purchased and held together

Question 11

net income

Answer 11

“Net” means revenues after costs

Question 12

obligation

Answer 12

a payment that is owed every month

Question 13

online credit

Answer 13

debt obtained from a number of online companies. borrowers need to disclose much less information about themselves to obtain online credit

Question 14

overdraft

Answer 14

when a company issued a check or makes a financial commitment for an amount greater than the amount the company has deposited in the bank

Question 15

overhead

Answer 15

cost that a business incurs that are not part of producing goods or services its sells

Question 16

own “free and clear”

Answer 16

owning an asset without any associated debt

Question 17

partnership

Answer 17

when two or more individuals own a company

Question 18

principal

Answer 18

the amount of money borrowed

Question 19

pro forma

Answer 19

a Latin phrase (for the sake of form) that in a business means a projection of future financial performance

Question 20

problem solving

Answer 20

the ability to find solutions to difficult or complex issues

Question 21

profit

Answer 21

revenues minus costs

Question 22

profits per unit

Answer 22

unit prices minus costs of goods sold

Question 23

quarter

Answer 23

most projections are for a year

Question 24

real estate

Answer 24

real estate is property and the buildings on it

Question 25

secure debt

Answer 25

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