Vocab Flashcards
Risk avoidance
Used when a business anticipates risk and refrains from certain business activities in order to avoid the risk
Financial resources
Funds available to a business or person spending in the form of cash, credit or securities
Financial ratio
Financial ratios provide a comparison between financial statement items to determine the strength or weakness of a company. The most common ratios are: net cells to net worth, and net income to net sales
Capital expenditures
The amount spent to acquire or upgrade an asset that will increase the efficiency of the production or operations of a business for the long-term
Securities information
Information provided regarding an investment instrument issued by a corporation, government or other organization that demonstrates whether it is debt or equity
Financial goal
Monetary objectives of an individual, business or other organization that are decided by future needs of those entities
Invest
Any activity where money is put at risk in the short term for the purpose of creating a profit in the long term. Most investment activities include conducting research and developing long-term plan for any assets that will be put at risk. Investment activities want to create and/or increase a positive outcome for the benefactor
Savings
The portion of disposable income that is not spent on essential expenses in a household or business. a variety of savings vehicles are available to increase the value savings, including a bank savings, account, stocks, bonds, etc.
Marginal analysis
A decision making tool that compares the cost of an activity versus the benefits of the activity
Social Security (FICA)
A tax paid by workers so that they may receive benefits upon retirement
Internal audit
An examination of an organization’s financial statements that is conducted by an employee of the organization
Insurance
A contract between a business and the insurer that covers a specific business risk
Database
The systematic organization of information that allows easy updating in analysis of data
Inventory system
An inventory system allows a business to maintain the optimum number of each item. In doing so, a business can operate production of a good or service, sales or customer service at a lower cost.
Business law
Laws that govern businesses and transactions between businesses
Debtor
A person or business that owes money, goods or services to another
Risk retention
A strategy in which an entity set aside a sum as a protection against probable loss, instead of transferring the risk by purchasing an insurance policy
Capital market
A market for demand and supply of debt and equity capital. This is a highly decentralized system made up of three major parts: the stock market, bond, market and money market
Exchange rate
The value of one currency in terms of another, established on the foreign exchange market
Voluntary compliance
The assumption that taxpayers will stay in compliance with tax laws and accurately report their income amounts and tax deductions fairly and honestly
Equity
Includes earnings that a company has retained and the amount of funds invested in that company by its owners
Just-in-time inventory
An inventory management method that coordinates the demand and supply for goods, delivering them just before they are needed
Estate tax
A tax paid on wealth, collected after that person has died
Inflation
Refers to rising prices and is an indicator of the stability of an economy
Commodities exchange
An open and organize marketplace where ownership titles or standard units of commodities are traded by its members
Indirect costs
Those costs which cannot be directly linked to a good, service or project
Information management
The process of collecting and analyzing data that be used in strategic decision making process for a business
Differential cost
The difference in cost between two or more business decisions
Transaction
An agreement or contract that occurs between two or more parties and establishes a legal obligation. This can also be defined as an exchange of goods or services between a buyer and a seller.
Client
A customer of a professional service provider or the primary contractor
Tax
Payment made to the government for services they provide
Perpetual inventory system
An inventory system that continually keeps track of the number of items in inventory, and can be done manually or by computer
External audit
An examination of an organization’s financial statements by an independent accountant, not affiliated with the organization
Creditor
The entity that provides available capital resources to debtors, in exchange for compensation
Income tax
Calculated as a percentage of the taxable income workers earn while on the job
Risk transfer
A strategy in which an insurance risk is shifted to another party (the insurer) by means of an insurance policy
Data mining
Reviewing very large amounts of data for useful information. This activity often uses advanced statistical tools to determine trends, patterns and relationships. Data mining can also be referred to as data surfing.
Financial position
The status of the assets, liabilities and owner’s equity of an individual, business or other organization as shown, and it’s financial statements
Inventory management
The process of buying and storing materials and products while controlling costs
Accounting
A system that monitors an individual, business or other organizations financial standing. This includes recording and verifying financial information to determine a profit or loss for a given time period as well as the value of assets, liabilities, and owners’ equity
Solvency
Refers to the ability of an organization to meet its financial obligations
Currency
Money
Cost alloction
Refers to the method in which indirect cost are assigned to a project
Insurance market
Composed of the companies involved in buying and selling of insurance
Managerial accounting
Accounting that focuses on revenues and expenses of a business, reporting variances to management.
Securities
An investment tool, such as bonds, debentures, notes, options, and shares
Accounting system
The (often) computerized system of collecting, processing, analyzing, and presenting accurate financial data to support management decisions
Client services
Any activity provided by a vendor on behalf of a client. Depending on the business this can include customer service, financial management, information, technology, social media support, database management, etc. The services provided to a client are agreed on by both parties and detailed in a contract unless otherwise specified.
Financial markets
A market for the sale or purchase of stocks, bonds, bills of exchange, commodities, fortunes and options, foreign currency which work as an exchange for capital and credit. In the United States, well recognized markets include the New York Stock Exchange (NYSE), the S&P 500, and the Chicago Mercantile Exchange (CME or Merc).
Variance analysis
Refers to the difference between a planned and actual budget
Activity based costing
A method used by businesses to accurately allocate overhead costs to specific products
Reporting
Used in finance to disclose an organization’s financial standing.
Internal risk
The possibility of loss, damage or injury within a business or other organization.
Economies of scale
An internal or external reduction in long term costs when production or operation increases in size
Customer relationship management (CRM)
At a minimum, this is a database of customer contacts, purchase history and technical support. Additional elements can include profiles of potential clients, understanding and leveraging the needs of current customers, and enhanced customer service based on data analysis.
Financial information management
Managing data such as credit card numbers, accounting balances or other monetary facts about an individual, business or other organization that are used when evaluating credit, loans or other financial activities
Sustainability reporting
Reporting by an entity that outlines its’ economic, environmental and social performance.
Financial analysis
Evaluating an organization’s financial statements to determine the profitability of the organization, a division within the organization or a specific event or project
Periodic inventory system
An inventory method in which items are counted only occasionally, by visual inspection – and can be completed manually, or through the use of technology, such as barcode scanners.
Expenditure
The payment of cash for goods or services to settle an obligation; usually seen as an invoice or a receipt
Data
Information in an unorganized form (alphabets, numbers or symbols) that have a relationship with current conditions, ideas or knowledge.
Corporate governance
Refers to the rules and practices that direct and control an organization.
Risk management
The process of controlling an individual, business or other organizations opportunity for damage, loss or injury to ensure the safety of the community, environment and legal responsibilities
Risk management
Monitoring the opportunity for loss for a business
Compliance
Verification that a vendor meets the requirements of accepted practices, regulations, legislation, rules, standards and/or the terms of a contract
Sunk cost
A cost that a business has incurred, but cannot recover.
Gross revenue
Amount of money that the purchasers of a company’s products or services actually pay for those items
Property tax
The main source of money for many local governments. This tax is based on the value of property such as land and buildings.
Financial institutions
Organizations that are public or private whom act as a channel between savers and borrowers of funds. There are two types of institutions: depository and non-depository. Depository organizations are usually banks or credit unions. Non-depository organizations are often recognized as insurance companies or mutual funds
Compliance officer
An employee of a business or other organization whose task is to ensure that regulations imposed by a government agency are being met as well as internal policies and procedures
Finance
The process of managing money for an individual, business or other organization
Budgeting
The process of determining a time specific financial plan for an individual, business or other organization to achieve a monetary goal.
Transparency
Fully and accurately disclosing of financial information to the public.
Time value of money
The increase of an amount of money due to interest earned over time or dividends paid
Bank statement
A document showing activity on your account over the previous month, including a beginning and ending balance and all inflows and outflows during that time
Securities and exchange commission (SEC)
Government agency created in 1934 that is responsible for enforcing securities-related laws and setting standards for financial information about businesses that are traded on a stock exchange. The SEC has five commissions who are appointed by the President and confirmed by the Senate who serve five year terms.
Money Market
A network of banks, discount houses, institutional vendors, and money dealers who borrow and lend among themselves for the short term (90 days). Any investment has risk, but a money market account is considered a safe place to invest due to its short term nature
Price
The value, in terms of money, placed on a good or service.
Professional development
Process of improving capabilities of staff through access to education and training opportunities in the workplace, through outside organizations, or observing others perform the job
Costing
A process to determine the cost of production or operation of a business by assigning expenses to various stages of production or operations of a firm.
Compliance Program
The systematic process of a business or other organization to ensure that regulations imposed by a government agency are being met.
Classification
A data-mining technique that uses a decision tree that requires a series of decisions
Professional relationship
Contacts made through business connections and interactions.
Financial globalization
The worldwide development of economic, financial, trade and communication integration. This pushes business executives to consider broad views in the global marketplace as countries and their economies become interconnected and interdependent
Convergence
The joining of two or more unique factors or phenomena, such as technologies. For example, the development of a smartphone was the convergence of telecommunications and internet technologies.
Credit
A way to receive cash or goods, while paying later.
Capital
The most common definition of “capital” is money invested in a business to generate income. Capital can also be defined as wealth in the form of an asset which can be an indication of strength of an individual, business or country.
Customer
An individual, business or other organization that receives products or services for their own use
External risk
The possibility of loss, damage or injury outside of a business or other organization.
Financial records
The financial documentation for an individual, business or other organization. The most common records are a Cash Flow Statement, Income Statement, Balance Sheet and Tax Returns
Tax law
The area of law that governs taxation. A tax is a fee charged by the government on a product, service, income or activity. The Internal Revenue Code is the name for all federal laws, which was first written in 1939 and has been revised multiple times to present day. Each state that collects a tax has their own department of taxation as well as local municipalities.
Compliance officer
An employee of a business or other organization whose task is to ensure that regulations imposed by a government agency are being met as well as internal policies and procedures
Consolidation
Combining assets, equity, liabilities and operating accounts of a business and its subsidiaries into one financial statement OR combining two or more businesses through the purchase, merger or ownership transfer to create a new business
Regression
A data-mining technique that takes a numerical dataset and develops a mathematical formula that fits the data
Six sigma
The strategy involves creating groups of people within the business or organization who have expert status in various methods, and then each project is carried out according to a set of steps in an effort to reach specific financial milestones. A six sigma process is defined as one in which 99.99966% of products created are expected to be statistically free from defects
Management function
The four functions of management include: planning, organizing, leading and controlling
Board of directors
A group of individuals elected by stakeholders of an organization to govern the organization.
Customer relations
The way a business interacts with its customers in order to obtain new customers while maintaining the current customer base
Cost of goods sold
This line on an income statement shows the cost of raw materials and labor to produce a finished product or service that is available to a consumer
