Test 1 Flashcards
money owed by a company to a supplier. Ex I purchase $10,000 of beauty supplies from a distributor to put in my store. The distributor gives me 60 days to pay it back. The $10,000 Is now in accounts payable for my company meaning that I ow it to someone
accounts payable
money owed by a customer to a company. Ex you purchased a new computer from me for $1,000. You put down $200 and signed a contract agreeing to pay the remaining $800 within 30 days. That $800 goes into accounts receivable in my company meaning someone owes my company $800
Accounts receivable
individuals that make small investments in an enterprise or to support an entrepreneur where they do not except an immediate or large return in the investment. They are typically friends and family.
Angel investors
something of value. Anything owned. EX. A house, a diamond ring. A security is financial asset – a piece of paper that represents ownership in something and is worth money
assets
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. Therefor bank loans are less expensive than online lines of credit
bank loan
a loan. A bond is a security that investors buy and sell, that represents a legal obligation from the company issuing the bond that they will pay the funds they received when they issued the bond
bond
a promise to keep information you learn secret. This promise is often formalized by signing a non-disclosure agreement (or NDA)
Confidentiality
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.
conflict of interest
unit price minus cost of goods sold
Contribution Margin
actions entrepreneurs and companies take that go beyond their financial self-interest.
Corporate social responsibility
a corporation is a person in the eyes of the law. The corporation is taxed for profits and is liable for any debts or judgements. Corporations are owned by shareholders (individuals or other corporations)
corporation
costs that make up one unit of what you sell. These can be labor costs as well as materials costs. Ex. When you sell a hat the variable cost include: the hat’s material and the labor cost required to make the hat
costs of goods sold
loss that an insurance company will reimburse a policyholder for in the event of a claim
covered cost
funds lent to a business with an agreement that the business will repay the lender with interest
Credit or debt
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
credit worthiness
