Small Business Management (w/ Accounting) vocab Flashcards
(156 cards)
1
Q
accounting
A
a language of business employed to communicate financial information based upon analyzing, recording, classification, summarization, reporting, and interpretation of financial data
2
Q
accounting equation
A
assets = liabilities + owners equity
3
Q
accounts payable
A
an unwritten promise to pay creditors for property, such as merchandise, supplies, or equipment, purchased on credit, or for services received on credit
4
Q
accounts receivable
A
an unwritten promise by a customer to pay, at a later date, for goods sold or services rendered
5
Q
accrual accounting
A
recording in each fiscal period applicable expenses, whether paid or not, and income earned, whether collected or not
6
Q
accrued expense
A
an expense incurred in operating a business during an accounting period, but not yet paid
7
Q
accrued income
A
income actually earned during an accounting period but which will not be received until a future period
8
Q
acquisition
A
a company inherited or bought
9
Q
advertising
A
the art of making the public aware of the service or commodities that the business has for sale
10
Q
age of accounts receivable
A
measures the average time required to collect receivables
11
Q
age discrimination in employment act
A
federal legislation that requires employer to treat applicants and employees equally regardless of age
12
Q
age of inventory
A
measures the average time required to sell inventory
13
Q
amortization
A
a paying off of a debt in regular installments over a period of time
14
Q
americans with disabilities act (ADA)
A
legislation that guarantees disabled people equal access to employment, as well as access to public areas
15
Q
angel investors
A
private investors who are willing to supply financing for a new or risky small venture start ups
16
Q
assets
A
property of monetary value owned by a business
17
Q
bad debts
A
accounts receivable that are uncollectable
18
Q
balance sheet / statement of financial position / statement financial condition
A
a formal financial statement illustrating the assets, liabilities, and owners equity of a business as of a specific date
19
Q
bona fide occupational qualifications (BFOQ)
A
a qualification absolutely necessary for the job; it is an allowed and approved reason for discrimination
20
Q
book value
A
the cost of a fixed asset less its accumulated depreciation
21
Q
branding
A
a method of applying verbal or symbolic means to identify a product or service
22
Q
break even analysis
A
the point at which total sales revenue equals total operating costs; determined by formula or chart
23
Q
business
A
an organization that combines inputs of raw materials, capital, labor, and management skills to produce useful outputs of goods and services to earn a profit
24
Q
business interruption insurance
A
insurance that protects companies during the period necessary to restore property damaged by an insured peril. coverage pays for lost income and other expenses related to recovery
25
business plan
a summary of how a business owner, manager, or entrepreneur intends to organize the business endeavor and implement the activities necessary for the venture to succeed
26
business policies
fundamental statements that serve as guides to management practice
27
corporation
an ordinary corporation, taxed by the federal government as a separate legal entity
28
cash basis accounting
an accounting practice in which revenue is not recognized in the accounting records until received and in which expenses are not recognized until paid
29
cash discounts
discounts from quoted prices as an inducement for prompt payment of invoices
30
cash flow
the amount of cash a company generates and uses during a period
31
cash flow statement
a financial report showing a firms sources of cash as well as its uses of cash
32
casualty insurance
insurance that provides monetary benefits to a business that has experienced an unforeseen peril, such as flood, fire, etc
33
census of business
source of market data that explain where certain businesses are located
34
census of housing
source of market data that keeps track of new home sales by region or the construction of hew houses by region and specific area
35
census of manufacturing
source of market data the explains where certain manufacturers are located
36
census of population
a source of market data that complies population statistics with regard to distribution of population by region, area, etc
37
chamber of commerce
an association of business people who attempt to protect and promote commercial interests in a community
38
civil rights act
federal legislation that prohibits discrimination on the basis of race, color, religion, sex, pregnancy, or natural origin
39
closed end credit / installment credit
balance of costly goods paid for in small monthly (fractional) payments over a period of time
40
competition
the practice of trying to obtain something being sought by others under similar circumstances at the same time
41
consumer credit
a type of credit granted by retailers used by individuals or families for satisfaction of their own wants
42
controlling / evaluating
the process of measuring organizational and individual performance with predetermined standards or expected results
43
copyright
the registered right of a creator to reproduce, publish, and sell the work that is the product of the intelligence and skill of that person
44
corporation
an artificial being, invisible, intangible, and existing only in contemplation of law; an entity that has a distinct existence separate and apart from the existence of its individual members
45
cost of goods sold
the cost of producing or acquiring goods or services to be sold by a firm
46
credit
1- the right of a standard account
2- an agreement that payment for a product or service will be made at some later date
47
current asset
cash of other assets that will be converted into cash or consumed within one year
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current liabilities
debts of a business that are generally paid within one year
49
current ratio
current assets divided by current liabilities
50
debt equity
any borrowed or loaned capital invested in the business that must be repaid to creditors
51
debit
the left side of a standard account
52
demographics
the statistical stud of human populations with respect to their size, density, distribution, composition, and income
53
depreciation
the loss in value of a fixed asset due to wear and tear and the passage of time; or, a method of matching the cost of a fixed asset against the revenues that the fixed asset will help produce during its useful life
54
drawing account / owner withdrawals
a separate owners equity account in which withdrawals of cash or other assets by the owner for personal use are recorded
55
earnings valuation approach
a business valuation approach that centers on estimating the projected future income of the business, typically over a 5-10 year period
56
earnings before interest, taxation, depreciation, and amortization / EBITDA
a firms profits after subtracting cost of goods sold and cash operating expenses, but before subtracting interest expense, taxes, depreciation, and amortization
57
economic base
the wealth produced in or near a community that provides employment and income to the local population
58
economic order quantity / EOQ
the quantity to be purchased that minimizes total costs
59
employee
one who is under the control and direction of an employer with regard to the performance of employment
60
employment application
a record of statements made at the time the applicant first seeks employment
61
entrepreneur
one who organizes, manages, and assumes the risk of a business firm or venture
62
environmental protection agency / EPA
a governmental agency with regulatory and enforcement authority on environment protection
63
equal employment opportunity act
federal legislation designed to eliminate employment discrimination based on race, color, religion, sex, or national origin
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equal pay act
federal legislation which prohibits discrimination on account of sex in the payment of wages by employers engaging in commerce or in the production of goods for commerce
65
expenses
a decrease in assets, other than withdrawals by the owner, which results from efforts to produce revenues
66
factoring
a method to obtain cash for business operations before payments are received from customers by selling off accounts receivable to a 3rd party
67
fair labor standards act / wage and hour law
federal legislation that outlaws discriminatory practices in pay; requires employers to pay a minimum wage to employees, and to pay a minimum of one and one half times the regular rate for any hours beyond 40 worked in a week
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family and medical leave act / FMLA
federal legislation that ensures employees of unpaid? leave for childbirth and other family needs
69
federal insurance contributions act / F.I.C.A.
a federal act that requires most employers and employees to pay taxes to support the federal social security program and medicare program
70
federal unemployment tax act / F.U.T.A.
a federal act imposed upon each employer for financing the administrations costs of the federal and state unemployment compensation programs
71
fixed asset / capital
long term capital invested in the small business; also, funds invested in such long term assets as land, building, machinery, furniture, fixtures, other equipment, not to be converted to cash within one year
72
fixed expenses
a cost that, for a given period of time and range of activity, called the relevant range, does not change in total, but becomes progressively smaller on a per unit basis as volume increases with increased business, nor do they decrease with declining business activity
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general journal
a book of original entry in which any business transaction is recorded in chronological order
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general ledger
the book of accounts
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goodwill
an intangible asset such as the name of a funeral home; also, an intangible asset that enables a business to earn a profit in excess of the normal rate of profit earned by other businesses of the same kind
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gross pay / gross earnings
income before any deductions have been made
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gross profit / gross margin
net sales minus the cost of good sold
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human resource management / personnel management
process of acquiring, training, developing, motivating and appraising a sufficient quantity of of qualified employees to perform activities and an organizational climate conductive to maximize efficiency and worker satisfaction
79
immigration reform act
the federal legislation requiring employers to check job applicants' papers to be sure they are either US citizens or undocumented individuals authorized to work in the US
80
income statement / profit and loss statement / statement of operations / operating statement
a formal financial statement that presents the income, expenses, and resulting net profit or net loss for a given period
81
income tax
a tax levied on the earnings of individuals and businesses by federal, state, and local governments
82
independent contractor
a person who agrees to perform a service for a fee and is not subject to the control of those for whom the service is performed
83
innovation
the introduction of something new; a new idea, method, or device
84
insurance
the equitable transfer of the risk of a loss form one entity to another in exchange for payment. it is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss
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intangible asset
those assets that cannot be touched or grasped (ex patents, copyrights, goodwill)
86
interest
money paid for the use of money
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inventory / merchandise
those goods or stock of goods held for resale at a profit
88
inventory turnover
the number of times the average inventory ahs been sold or used up during a period
89
invoice
a source document showing quantity, description, prices of items, total amount of purchase, and the terms of payment
90
job analysis
the process of determining the critical components of a job for purposes of selecting, training, and rewarding personnel
91
job description
a document that lists the major responsibilities and tasks of the job
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job specification
a document that lists the knowledge, skills, abilities, and personal characteristics a job holder must posses to perform effectively
93
key person life insurance
life insurance that protects a firm against losses due to the death of a key employee
94
leading / actuating / directing
the process of guiding or supervising the activities of an organization to achieve plans and objectives
95
liabilities
any debts that a business owes
96
limited liability company / LLC
a form of business ownership that combines aspects of partnerships with the limited liability of a corporation; owners known as members
97
liquidation value approach
the anticipated value of an asset that would be realized in case of liquidation of the business
98
long term liabilities / fixed liabilities
liabilities not due and payable within one year
99
management
the art and science of motivating people toward the achievement of a goal
100
manufacturing business
a business that makes finished goods from raw material by hand or machinery
101
markdown
a reduction of selling price below the original selling price
102
market
a group of potential customers possessing purchasing power and unsatisfied needs
103
marketing management
the process of planning and executing the development, pricing, promotion, and distribution of an organizations goods or services
104
market survey
a study used by a business to determine where the potential customers are located
105
market value approach
an approach used in business valuation that determines value based upon previous sales of similar businesses
106
markup
the difference between merchandise cost and selling price
107
merchandising business
a business that purchases finished goods for resale
108
motivating
the process of energizing, channeling, and sustaining peoples behavior
109
net earnings / net pay / take home pay
gross pay less payroll deductions; an employees take home pay
110
net income / net profit
the difference between gross profit and expenses when gross profit is larger
111
net loss
the differenced between gross profit and expenses when expenses are larger
112
net sales
sales minus sales returns and allowances minus sales discounts
113
occupational safety and heath act / OSHA
federal legislation that created the governmental agency with the responsibility for regulation and enforcement of safety and health matter for most US employees; an individual state OSHA agency may supersede the US department of labor OSHA regulations
114
open end credit / revolving credit
a line of credit that may be used over and over again up to a certain borrowing limit
115
operating expense / overhead expense
costs related to marketing and selling a firms product or service, general and administrative expenses and depreciation
116
operating ratios
a comparison of profit and expense items in the income statement expressed as a percentage of sales income; the operating ratios can be compared to the industry standards in regard to measuring the possible growth of the business
117
organizing
the process of assigning tasks, allocating resources, and coordinating the activities of individuals and groups to implement plans
118
owners equity / capital / net worth
the amount by which the total assets exceed the total liabilities of a business; an owners financial interest in a business
119
partnership
the voluntary association of 2 or more people who have combined their resources to carry on as co owners of a lawful enterprise for their joint profit
120
planning
the process of setting performance objectives and determining what actions should be taken to accomplish them
121
pricing policy
factors which influence prices
122
product liability insurance
insurance that protects a firm against claims that its product caused bodily injury or property damage to the user
123
ratio analysis
quantitative evaluation of information contained in a company's financial statements (ex. balance sheet, income statement, and cash flow statement, etc) to determine the overall financial strength of a business
124
recruitment
the process of forming a pool of qualified applicants for tasks that need to be filled
125
replacement value approach
an insurance concept in which the fair market price to purchase similar products in similar condition is used to settle claims
126
resume
written summary of ones personal, educational, and professional achievements
127
retail sales tax
a tax imposed on tangible personal property sold at retail
128
revenue / income
an inflow of assets as a result of selling a product or providing a service
129
risk
a probability or threat of damage, injury, liability, loss, or any other negative occurrence caused by external or internal vulnerabilities
130
risk management
a process for identifying, assessing, and prioritizing certain kinds of events happening to or having an impact on a business with the intent to reduce or eliminate the risk
131
S corporation
a type of corporation that offers limited liability to its owners but is taxed by the federal government as a partnership
132
salary
generally considered to be compensation for managerial or administrative services, expressed in terms of a month or year
133
self insurance
a form of risk management whereby a part of the firms earnings is earmarked as a contingency fund for possible future losses, specifically for individual loss categories, such as property, medical, or workers compensation
134
service business
a business that provides a services as opposed to a product
135
small business
a business independently owned and operated and is not dominant in its field of operations
136
small business administration / SBA
the principal government agency concerned with financing, operation, and management of small businesses
137
sole proprietorship
business owned by one person, who bears unlimited liability for the enterprise
138
startups
new business ventures started from the beginning
139
strategic plan
a document designed to communicate the organizations goals for the future
140
state unemployment tax act / S.U.T.A.
a tax levied in most states to raise funds to pay unemployment benefits
141
talent management
a process used by human resource departments to locate, hire, train, and retain the best qualified employees
142
tangible assets
assets that can be appraised by value or seen or touched
143
trademark
an intangible asset that is for distinct name, sign, or symbol that the federal government grants exclusive rights to use for a specified period of time
144
transaction
any activity of a business enterprise that involves the exchange of values
145
transaction analysis
the effect of business activities on the accounting elements
146
useful life
the estimated determinable life of a fixed asset
147
valuation
estimate of the worth or price of a company
148
variable expense
a cost that is uniform per unit, but fluctuates in direct proportion to change in the related total activity or volume
149
venture capitalist
anyone who invests in, or financially sponsors, a new business
150
vietnam era veterans readjustment act
outlaws discrimination in employment against vietnman era veterans
151
w-2 form
wage and tax statement; a report furnished by the employer for each employee indicating gross earnings and deductions
152
w-4 form
employees' withholding allowance certificate
153
wage
a form of compensation usually for skilled and unskilled labor, expressed in terms of hours, weeks, or pieces completed
154
workers compensation insurance
coverage that provides benefits to employees injured at work
155
working capital / circulating capital
the difference between current assets and current liabilities
156
zoning ordinances
the formal codification of land use policies by a unit of local government with the goal to establish permitted uses for land and to distinguish between different types of uses which may be incompatible
