Vocab 3

Question 1

1. Lien

Answer 1

the right to take possession until a debt is repaid

Question 2

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, but the corporation (not the members) is liable for debts or judgements against the company.

Question 3

3. Line of Credit

Answer 3

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

Question 4

4. Liquid Assets

Answer 4

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

Question 5

5. Louisiana Department of Revenue

Answer 5

The state agency that collects state taxes

Question 6

6. Marketing

Answer 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)

Question 7

7. Maturity

Answer 7

The date a loan is repaid in full

Question 8

8. Mentor

Answer 8

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

Question 9

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. Investors purchase mutual funds because they are less risky than holding an individual bond

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, 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

Question 14

Overdraft

Answer 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.

Question 15

Overhead

Answer 15

Costs that a business incurs that are not part of producing the goods or services its sells, bit which are required to operate legally and efficiently.

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. Partners are taxed on the profits of the company, and are personally liable for any debts or judgements against the company

Question 18

Principal

Answer 18

The amount of money borrowed

Question 19

Pro Forma

Answer 19

A latin phrase that in 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 cost

Question 22

Profits per unit

Answer 22

Revenues minus cost of goods sold

Question 23

Quarter

Answer 23

Most projections are a year. A “quarter” means three months.

Question 24

Real Estate

Answer 24

Real Estate is property and the building 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 usually purchased using a mortgage

Question 25

Secured 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.