voc part 3

Question 1

the right to take possession of collateral unit a debt is repaid

Answer 1

Lien

Question 2

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 judgements against the company.

Answer 2

Limited Liability Corporation (LLC

Question 3

– a loan that provides the borrower a maximum amount of money he/she can borrower – the borrower can then access or use that line of credit 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 marketing tool (TV, Radio, Flyers)

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 mutual funds 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 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.

Answer 13

Online Credit

Question 14

when a company issues a check or makes a financial commitment for an amount greater than 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 operate legally and efficiently. Ex. The salary the business pays its accountant is overhead – 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 free and clear.

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 pro forma usually takes the form of a projection of future revenue 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 or 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 “quarter” means three months

Answer 23

Quarter

Question 24

– real estate is properly 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”.

Answer 24

Real Estate

Question 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. A secured debt can be guaranteed by the entrepreneur or by any credit-worthy guarantor

Answer 25

Secured Debt