MicroEnterprise Exam

Question 1

Money owed by a company to a supplier.

Answer 1

Accounts Payable

Question 2

Money owed by a customer to a company.

Answer 2

Accounts Receivable

Question 3

Individuals that make small investments in an enterprise or to support an entrepreneur where they do not expect an immediate or large return on the investment. They are typically friends and family who know the business owner and want to see them succeed.

Answer 3

Angel Investors

Question 4

Something of value. Anything owned.

Answer 4

Assets

Question 5

Debt from a bank. Banks require much more information from potential borrowers and take more time to make a lending decision based on a great deal of analysis. Therefore, it is less expensive than online lines of credit.

Answer 5

Bank Loan

Question 6

A loan. A security that investors buy and sell, that represent a legal obligation from the company issuing it that they will repay the funds they received when they issued the bond.

Answer 6

Bond

Question 7

A determination of how many units are needed to sell in order to pay for all fixed costs.

Answer 7

Breakeven Analysis

Question 8

A company that provides individuals and companies with access to financial markets.

Answer 8

Brokerage

Question 9

Proper business behavior beyond complying with legal requirements.

Answer 9

Business Ethics

Question 10

Funds contributed by investors to a business. Investors contribute to a business because they expect a significant return on their investment when the business succeeds.

Answer 10

Capital (or Equity)

Question 11

Money spent on equipment the business will use for many years.

Answer 11

Capital Expenditures

Question 12

Total revenue minus total cost minus one-time expenditures (capital expenditures) on equipment that will be sued for many years.

Answer 12

Cash Flow

Question 13

Cash, publicly traded stocks, government bonds, or corporate bonds that can be quickly turned into cash. The can be turned into cash at values that are predictable and available to all holders of the cash instruments.

Answer 13

Cash Instruments

Question 14

Equipment, inventory, or other goods that are pledged to the bank in the case the company cannot make a loan payment.

Answer 14

Collateral

Question 15

The ability to interact in a friendly and effective way with unfamiliar people. The ability to seem welcoming and easy to talk to, even with people we are different in age, appearance, or background

Answer 15

Comfort Engaging with Strangers

Question 16

Money earned when something is sold.

Answer 16

Commission

Question 17

A promise to keep the information you learn secret. The promise is often formalized by signing a Non-Disclosure Agreement. (NDA)

Answer 17

Confidentiality

Question 18

A situation in which an individual might take an action to his/her advantage that would be to the disadvantage of a person or company that believes this individual is serving them.

Answer 18

Conflict of Interest

Question 19

Unit price minus the cost of goods sold.

Answer 19

Contribution Margin

Question 20

Actions entrepreneurs and companies take that go beyond their financial self-interest.

Answer 20

Corporate Social Responsibility

Question 21

A person in the eyes of the law. It is taxed for profits and is liable for any debts or judgments. Owned by shareholders (individuals or other corporations).

Answer 21

Corporation

Question 22

Cost that makeup one unit of what you sell. These can be labor costs as well as material costs.

Answer 22

Cost of goods sold.

Question 23

A loss that an insurance company will reimburse a policyholder in the event of a claim.

Answer 23

Covered Loss

Question 24

Funds lent to a business with an agreement that the business will repay the lender with interest.

Answer 24

Credit (or Debt)

Question 25

A person or a business with a strong credit score and the financial resources that make it likely they will be able to repay any loan.

Answer 25

Credit-Worthiness

Question 26

An internet phenomenon, where strangers learn about a business online and then decide whether or not to make an investment. These investors are typically "fans" of an owner, but they do expect a return on investment.

Answer 26

Crowdfunding

Question 27

The amount an insurance company makes a policyholder pay as part of any claim.

Answer 27

Deductible

Question 28

Failure to repay a loan.

Answer 28

Default

Question 29

The commitment to get something done.

Answer 29

Determination

Question 30

Distinguishing a product or service "different than anything else" attracting customers, generating sales and serving as the foundation for a thriving business.

Answer 30

Differentiated Offering

Question 31

Money paid by a company to a person who owns stock in that company.

Answer 31

Dividend

Question 32

A clear, concise and compelling way to describe a business or new business concept in 30 seconds; a differentiating vision to encourage potential investors or employees to learn more

Answer 32

Elevator Speech

Question 33

Open-ended questions that prompt more than a "yes" or "no" answer.

Answer 33

Engaging Question

Question 34

Funds contributed by investors to a business. Investors contribute capital to a business because they expect a significant return on their investment when the business succeeds.

Answer 34

Equity (or Capital)

Question 35

Understanding how individuals and businesses earn money and what they spend money on.

Answer 35

Financial Literacy

Question 36

The 12-month period a company uses to report financial results. It can be the same as a calendar year or it can be any 12-month period that makes sense.

Answer 36

Fiscal Year

Question 37

Costs that do not vary based on the units sold by the enterprise.

Answer 37

Fixed Costs

Question 38

A computer portal offered by the Louisiana Secretary of State that enables entrepreneurs to go to a single source to learn which forms they need to file the forms required by the Secretary of state, and to determine which other government agencies they may need to interact with.

Answer 38

geaux BIZ Portal

Question 39

An individual's self-commitment to overcome obstacles to achieve long-term goals. The ability to keep pursuing your dream despite challenges and defeats. Perseverance, resilience, and backbone.

Answer 39

Grit

Question 40

A credit-worthy individual or business with sufficient liquidity that promises to repay a loan in the event that the debtholder can't make a required payment.

Answer 40

Guarantor

Question 41

A special account where individuals can deposit retirement funds that can grow tax-deferred until they withdraw them after they retire.

Answer 41

Individual Retirement Account (IRA)

Question 42

Debt owed to someone that is paid monthly.

Answer 42

Installment Payment

Question 43

The amount an insurance policyholder receives from the insurance company to reimburse the policyholder for a covered loss.

Answer 43

Insurance Claim

Question 44

The individual or business that purchases an insurance policy for various types of protection.

Answer 44

Insurance Policyholder

Question 45

The amount a policyholder pays for an insurance policy.

Answer 45

Insurace Premium

Question 46

Non-physical assets created by individuals or companies that hold the exclusive legal right to commercialize.

Answer 46

Intellectual Property

Question 47

Gives the author the sole right to benefit economically from what he/she wrote.

Answer 47

Copyright

Question 48

Gives the inventor the sole right to benefit commercially from his/her invention.

Answer 48

Patent

Question 49

Gives the registering individual or company the sole right to benefit from a brand or image he/she created.

Answer 49

Trademark

Question 50

The federal agency that collects federal taxes and performs audits.

Answer 50

Internal Revenue Service (IRS)

Question 51

The merchandise that a company sells to customers.

Answer 51

Inventory

Question 52

A legal decision requiring a person or company to pay another person or company.

Answer 52

Judgement

Question 53

An obligation you have to pay someone else money. Also called a debt or loan.

Answer 53

Liability

Question 54

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

Answer 54

Lien

Question 55

A special type of coporation 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.

Answer 55

Limited Liability Corporation (LLC)

Question 56

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 as they need at any particular time.

Answer 56

Line of Credit

Question 57

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

Answer 57

Liquid Assets

Question 58

The state agency that collects state taxes.

Answer 58

Louisiana Department of Revenue

Question 59

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

Answer 59

Marketing

Question 60

The date a loan is repaid in full.

Answer 60

Maturity

Question 61

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

Answer 61

Mentor

Question 62

The money a person borrows to buy real estate.

Answer 62

Mortgage

Question 63

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 63

Mutual Fund

Question 64

Means revenues after costs.

Answer 64

Net Income

Question 65

A payment that is owed every month.

Answer 65

Obligation

Question 66

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

Answer 66

Online Credit

Question 67

When a company issues a check or makes a financial commitment for an amount greater than the amount the company has depositied in the bank. Also called a "bounced check".

Answer 67

Overdraft

Question 68

Costs that a business incurs that are not part of producing the goods or service it sells, but which are required to operate legally and efficiently.

Answer 68

Overhead

Question 69

Owning an asset without any associated debt.

Answer 69

Own "Free and Clear"

Question 70

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 judgments against the company.

Answer 70

Partnership

Question 71

The amount of money borrowed.

Answer 71

Principal

Question 72

A Latin phrase that in business means a projection of future financial performance. It usually takes the form of a projection of future revenues and costs.

Answer 72

Pro Forma

Question 73

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 73

Problem Solving

Question 74

Revenues minus Costs

Answer 74

Profit

Question 75

Unit price minus the cost of goods sold

Answer 75

Profits per Unit

Question 76

Most projections are for a year. This term means every three months. Most businesses make reports for each ______________.

Answer 76

Quarter

Question 77

Property and the building(s) on it. It can be a piece of land or can be a home on that piece of land, or it can be a building. It is typically purchased using a mortgage. The down payments the buyer makes is called the buyer's "equity".

Answer 77

Real Estate

Question 78

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. It can be guaranteed by the entrepreneur or by any credit-worthy guarantor.

Answer 78

Secured Debt

Question 79

An investment worth money; a "financial instrument" indicating ownership.

Answer 79

Securities

Question 80

An investment vehicle. Different types of this include stocks, bonds, and mutual funds.

Answer 80

Security

Question 81

The ability to pursue what you think is right or necessary to do despite temptations to quit.

Answer 81

Self-Discipline

Question 82

The ability to pursue a task without being told to by someone else. These individuals can find the strength to start and then finish a task without giving up.

Answer 82

Self-Motivation

Question 83

Costs that vary somewhat based on the number of units you sell.

Answer 83

Semi-Variable Costs

Question 84

An individual that owns a company. They are taxed on the profits of the company and are personally liable for any debts or judgments against the company.

Answer 84

Sole Proprietorship

Question 85

One of the equal parts into which a company's capital is divided, entitling the holder to a proportion of the profits. It refers to the ownership certificates of a particular company.

Answer 85

Share

Question 86

An individual or company that owns shares in a company.

Answer 86

Shareholder

Question 87

All people or companies associated with an enterprise. Includes internal (employees and shareholders/owners) as well as external (customers, suppliers, community members)

Answer 87

Stakeholders

Question 88

Shares of ownership in a company. A general term of ownership in any company.

Answer 88

Stocks

Question 89

A company that provides a good or service to another company.

Answer 89

Supplier

Question 90

The hard work a small business owner puts into forming, founding, and operating his/her business. Small business owners typically work very long hours This is as important as any capital but it's not a cash investment.

Answer 90

Sweat Equity

Question 91

The exact customers and market sector the business intends to serve.

Answer 91

Target Market

Question 92

Working with others to address a challenge. Individuals using their skills in harmony with others to complete a task. Collaboration and cooperation.

Answer 92

Teamwork

Question 93

Fixed cost plus variable cost.

Answer 93

Total Costs

Question 94

Units times price.

Answer 94

Total Revenue

Question 95

The practice of operating openly and communicating fully, providing stakeholders with a clear understanding of how your enterprise operates.

Answer 95

transparency

Question 96

Assets that are not already pledged as a guarantee to repay another loan.

Answer 96

Unencumbered

Question 97

Refers to the "things" the company sells. Retail stores sell many different types of units. Service businesses can sell many different types of services.

Answer 97

Units

Question 98

Debt that does not include a promise by a guarantor to repay the loan in the event the debtholder is unable to make a required payment. It is riskier for the bank or online lending company - therefore the lending party charges a higher interest rate on this type of debt.

Answer 98

Unsecured Debt

Question 99

Costs that vary based on the units sold by your enterprise.

Answer 99

Variable Cost