BFS PIs Final

Assess personal strengths and weaknesses (PQ)

When assessing your strengths and weaknesses, many areas can be explored. Interpersonal skills that can be assessed include self esteem, attitude, initiative, self control, creativity, flexibility, stress management, and time management skills. You will also want to assess more concrete skills and abilities. These are things that you will be asked to do in the workplace, such as selling a product or organizing an activity. Complete a self-assessment by asking yourself if you have these types of skills and taking inventory of your workplace values and needs. Determine what skills you are lacking and where you can make improvements. Develop your skills and abilities by reading, observing, and working in a real-world situation.

Foster positive working relationships (CS)

Working with others is not always easy, which is why it is important to create and maintain a working environment that is positive and effective. Working as a team is a critical component for a group of people to achieve a common goal. Being a valuable team member involves making the team's goals our top priority, building positive group dynamics, and being an active listener. One way to foster a positive working relationship with others is to show respect for their ideas and feelings. Being prompt with your assignments and showing responsibility are other ways to maintain those relationships. Also, as in most areas of business, being able to communicate effectively with others is a skill that must be learned and utilized.

Interpret a pay stub (PQ)

Your paystub includes many important things, starting with your name and social security number. It lists the current pay period. Your current and year-to-date earnings, taxes, and deductions are listed. Current earnings may be described with your hourly rate, the number of hours worked, and your gross earnings (calculated by multiplying your hourly rate by the number of hours worked). Taxes that may be withheld from your gross pay include Federal, State, Local, FICA (Social Security), and Medicare. Other deductions might include union dues and money withheld for fringe benefits, such as health insurance. Net pay is your gross earnings less taxes and deductions.

Describe sources of income (wages/salaries, interest, rent, dividends, transfer payments, etc.) (PQ)

Your primary source of income is the wages or salary you earn from your employer. Other sources of income might include tips, gifts of money or property, and interest earned on a bank account or an investment. You may also receive money from the government.

Describe the nature of legal procedure (SP)

Procedural law or adjective law comprises the rules by which a court hears and determines what happens in civil, lawsuit, criminal or administrative proceedings. The rules are designed to ensure a fair and consistent application of due process (in the U.S.) or fundamental justice (in other common law countries) to all cases that come before a court.

Identify factors affecting a business's profit (CS)

Profit is the monetary return a business' owner receives for taking the risk of investing in the business. In simple terms, profit equals income less expenses. More specifically, there are two types of profit: gross profit and net profit. Gross profit is the money left over after the cost of goods is subtracted from income from sales. Net profit is the money left over after operating expenses are subtracted from gross profit. Factors that affect profit include demand for the good/service, expenses, prices, the economy, and chance. To try to increase profit, a business can increase worker efficiency, increase sales, and/or decrease expenses.

Describe sources of securities information (CS)

Public companies make information available through a variety of documents. Annual reports highlight the company's performance and changes over the past year. A 10-K report is filed annually with the Securities and Exchange Commission. Companies often provide quarterly reports to shareholders, as well. An 8-K report is filed when a major company event that affects its securities takes place. In addition, many companies publish news bulletins. Other sources of information include newspapers, magazines, and other periodicals. The Wall Street Journal is one of the most respected sources of financial information, as are Investor's Business Daily, The New York Times, Barron's, Business Week, Forbes, and Fortune. Other publications are specific to investment advisory information, such as Moody's, Value Line Investment Survey, and Standard and Poor's Stock Guide. Securities brokerages also have numerous resources and internal reports for securities advice and information. Finally, there are numerous web sites, as well as television and radio programs offering assistance.

Apply written directions to achieve tasks (PQ)

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Demonstrate advanced database applications (SP)

A database is a computer file in which data can be entered, retrieved, and modified. Such a file might contain information about a business, a chart of accounts, and financial activity for each account. Database applications provide mechanisms for creating forms and reports, as well as manipulation of data to answer specific questions.

Explain routine security precautions (CS)

All companies are responsible for protecting people and property in the scope of business. Security personnel may be hired and policies should be written to serve these purposes. Procedures to handle emergencies, safety hazards, natural disasters, theft, and liability issues need to be addressed. Planning for such instances helps to minimize the amount of loss that may occur.

Choose and use appropriate channel for workplace communication (CS)

Factors to consider are speed, accuracy, cost, number of messages, the number of people, efficiency, and ability to promote goodwill. The channel to choose also depends on the audience, the purpose of the communication, and the situation. For example, oral communication is best suited for group settings and to make things seem more personal. Shorter communication channels are more accurate than longer ones.

Explain the impact of the law of diminishing returns (SP)

The change in total product output that results from hiring one more worker is called the marginal product. Diminishing returns is experienced when the number of workers being utilized causes output to increase at a decreasing rate. Utilizing too many workers may actually cause production to decrease.

Describe how to monitor internal records for business information (SP)

The functions of an information system are to gather, analyze, store, and report on data. Records are kept regarding financial information, production and inventory, marketing and sales, and human resources. Internal data includes accounting records, inventory information, company sales figures, and more. A company's balance sheet, cash flow statement, and income statement are records that are monitored during a specific period of time. They are used to calculate revenue, evaluate costs and expenses, and measure profit/loss.

Explain legal considerations for accounting (SP)

The most significant changes to corporate governance and accounting practice came with the Sarbanes-Oxley Act of 2002. The act requires that CEOs, financial officers, accountants, and auditors comply with regulations and procedures designed to ensure accurate representation of companies' financial positions. It prohibits most loans to directors and executive officers, and forces company insiders to report changes in ownership within two days after a transaction has been executed. Securities regulation ensures that purchasers can learn the true nature of the securities they buy by providing a way to uncover fraud and unfair practices.

Explain types of financial markets (e.g., money market, capital market, insurance market, commodities markets, etc.) (SP)

The primary market is where newly issued securities are sold, usually by investment bankers. After the initial selling, or initial public offering (IPO), securities are traded on the secondary market. Examples of secondary markets include the New York Stock Exchange, the American Stock Exchange, and the NASDAQ. These exchanges are auction markets where buyers and sellers physically come together to trade. The over-the-counter market (OTC) is a network where securities transactions are done by telephone and Internet instead of on an exchange floor. Usually, smaller and newer businesses are traded OTC. The NASDAQ is an OTC market.

Identify desirable personality traits important to business (PQ)

There are many characteristics of successful business-people, including persistence, creativity, responsibility, confidence, and enthusiasm. A businessperson should be inquisitive, goal-oriented, independent, a risk taker, and action oriented. Essential skills for running a business include the following: communication, math, problem solving, technology, decision making, organizing, teamwork, social, and basic business skills.

Handle customer/client complaints (CS)

Think of complaints as an opportunity to learn something and to improve service. To address a complaint, first listen completely and openly so that you understand the complaint. Talk to the customer privately, if possible, in a quiet setting. Repeat the complaint to demonstrate your understanding. Do not place blame on any party and explain what may have caused the problem. Try to reach an agreement with the customer about the next course of action, but be sure your suggestions comply with company policy. Get assistance from a supervisor, if needed.

Manage commitments in a timely manner (CS)

Time management means budgeting your time to accomplish tasks on a certain schedule. Time-management principles involve establishing goals, setting deadlines, allocating enough time for each task, tackling the most difficult task first, and being realistic. In order to be effective in your work, you must be able to use time wisely. Managing time well is an example of responsible behavior. These guidelines are useful for time management: 1) Make a list of tasks to complete. 2) Prioritize. 3) Continue to rank the tasks. 4) Create a schedule based on the list.

Interpret business policies to customers/clients (CS)

You need to be familiar with a variety of company policies in order to respond effectively to customers' concerns and needs. Learn appropriate procedures for handling customer requests, questions, and complaints. You will also need to know what you can and cannot say to a customer. Understand the management structure of your business, and under what conditions a manager should be contacted to talk with a customer. You will also need to be able to explain business policies to customers, such as return/exchange policies.

Describe the nature of customs regulations (SP)

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Discuss the impact of globalization on business (SP)

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Discuss the nature of human resources management (CS)

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Explain cultural considerations that impact global business relations (SP)

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Follow oral directions (PQ)

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Prepare bank account documents (e.g., checks, deposit/withdrawal slips, endorsements, etc.) (PQ) Maintain financial records (PQ)

A checkbook register is a booklet that you fill out for all deposits and withdrawals from your checking account. Included are sections for the check number, date of transaction, description, payment amount, reconciliation, deposit amount, and new balance on the account. You will use the checkbook register to reconcile your bank statement when it comes. Writing a check involves writing the date, the name of the payee, the amount of the payment in numerals as well as in words, your signature, and a memo if you choose. When you are cashing or depositing a check made out to you, start by endorsing the check by signing the back of it. Fill out a deposit slip to give to the bank teller with your name and account number, along with the amount of the deposit. Also, be sure to record the amount of the deposit into your checkbook register.

Discuss the nature of debtor—creditor relationships (SP)

A debtor is a person or business that owes money, goods, or services to another. The one to whom the debt is owed is called the creditor. The debtor receives needed or wanted goods or services that may not otherwise be obtainable. In return, the creditor puts available capital resources to work and is paid for this. Both parties are likely to suffer some loss if either one fails to perform the contract as promised. A legally enforceable debt normally arises out of a contract wherein something of value has been exchanged for the promise to provide money, goods, and/or services. The debtor-creditor relationship is essential to economic growth and is, therefore, encouraged and protected by law. Legal protections make creditors more secure when lending while protecting debtors from unfair credit and collection practices.

Discuss career opportunities in the finance industry.

A large number of career opportunities exist in finance: accountants, bank tellers, property managers, credit analysts, economists, financial advisors, insurance agents and claims adjusters, investment analysts, loan officers, management, personal bankers, real estate agents and brokers, stockbrokers, and tax preparers among many others. There are also four main types of financial planners: fee-only, fee-offset, fee-and-commission, and commission only. Licenses and certifications are available for many of these career choices.

Describe factors that affect the business environment (SP)

A number of factors affect the business environment, therefore it is important to research the industry and understand the surrounding economy. Industry trends and patterns of change in areas such as sales growth and government regulation should be considered. Understanding the competition will help you plan a strategy of success. Barriers to entry in an industry may exist, such as a dominant competitor, economies of scale, and customer brand loyalty. Other industry factors include threats from substitute products, supply sources, and technology. A critical area to analyze is the demographics of your business environment, including number of companies, annual revenues, and average number of workers employed. Assessing the competition includes looking at market share and analyzing the position of your company relative to others in the marketplace.

Motivate team members (SP)

A variety of methods can be useful for management to motivate team members. Factors that motivate employees are achievement, recognition, responsibility, advancement, growth, and the reward from doing the work itself. The use of rewards for good work can be effective. When giving rewards, identify those workers who are effective and efficient, and not those who simply get the work done. Also, reward and recognize long-term employees for their loyalty to the company. Employees are also motivated by the freedom to be creative. Encouraging them to show creativity without risk of penalty often yields positive and ingenious results.

Take responsibility for decisions and actions (PQ)

Accepting responsibility means that you are willing to be held accountable for your actions. After taking the initiative to begin a job, you must accept responsibility for completing it. Employers and customers value responsible employees because they fulfill their promises and do what is expected of them. An employee who takes initiative and is responsible is reliable. Employers, coworkers, and customers know they can depend on someone who can be counted on to take action and follow through.

Demonstrate active listening skills (PQ)

Active listening is where a person recognizes and evaluates what is being heard. Active listening involves the following skills. 1) Identify the purpose—review the purpose of the communication and prepare to respond. 2) Look for a plan—be aware of the structure of the communication to make it easier to see how it all fits together. 3) Give feedback—these verbal and non-verbal cues indicate whether or not you understand the message. Ask questions at an appropriate time. 4) Search for a common interest—try to find something that interests you in order to avoid tuning out the speaker. 5) Evaluate the message—do so from the speaker's point of view as well as your own, and try to limit bias and personal judgment. 6) Listen for more than verbal content—assess what is being communicated non-verbally through rate of speech, pitch, volume, and voice quality. 7) Listen for a conclusion—at this time you may wish to take action or ask questions. 8) Take notes—structure your notes around the plan and check them to see you have understood the main ideas.

Explain the nature of accounting standards (CS)

All accountants follow the same set of rules to prepare financial reports. The Financial Accounting Standards Board issues rules referred to as generally accepted accounting principles (GAAP). These principles provide a way to communicate financial information in a form understood by those interested in the operations and financial condition of a business. Accounting reports are used by individuals outside the business as well as inside. Outside the business, investors, lenders, consumers, competitors, and government may be interested. Workers, union leaders, and management all may have a need to see and clearly understand a business' financial situation.

Describe legal issues affecting businesses (SP)

Among the legal issues affecting businesses are the following. Consumer protection issues include product safety (for everything from toys to furniture), zoning laws to protect real estate value and quality of life, public health (i.e. at restaurants), and licensing for personal service providers (such as hairstylists and electricians). Employee protection issues include minimum wage standards, equal opportunity employment provisions, guidelines for workplace safety, and the Family and Medical Leave Act. Other legal issues businesses must be aware of include laws protecting investors and the environment as well as maintaining competition in the marketplace. The Securities and Exchange Commission regulates the sale of stocks and bonds and investigates deals among corporations. Businesses must follow various other laws to protect human health and the environment in regard to pollution, waste disposal, and recycling. Companies are also faced with legal standards that protect against anti-competitive mergers and business practices. Laws also exist that regulate the distribution of products such as alcohol and tobacco.

Discuss types of accounting systems used to report a business's financial position (SP)

An accounting system is a planned process for providing financial information that is beneficial to management. Accounting systems create reports containing financial, managerial, cost, and tax information. They may be categorized as follows: departmentalized accounting, corporation accounting, management accounting, cost accounting, accounting for a partnership, and accounting for a nonprofit.

Explain the types of economic systems (CS)

An economic system, or economy, is the way a nation provides for the needs and wants of its people. It defines how a country will use its resources to produce and distribute goods and services. Four types of economic systems exist: traditional, market, command, and mixed. A traditional economy determines the use of its resources based on the cultural or religious traditions that have been used for generations. Mostly small, developing nations use this type of economy today. In a market economy, there is no government involvement in the decision making process regarding economic resources. The marketplace determines what, how, and for whom goods will be produced. A command economy is a system in which a nation's government makes all of these economic decisions. The government also controls the factors of production in this system. No country, however, is a purely traditional, market, or command economy. There are always influences that make it somewhat mixed.

Explain the role of ethics in human resources management (SP)

An ethics policy for employees may discuss working hours, wages and benefits. incentives, flexibility, safety and health issues, and termination procedures. Ethical operations will maintain fairness and safety for all employees and customers, be open and up-front about their policies, and handle problems promptly and equitably. Train your employees in safety and emergency procedures, then reinforce the training with signage in the workspace. Ethical behavior must be maintained in employee evaluation, as well as when giving consideration for promotions, transfers, and bonuses.

Describe the need to analyze customer financial information (SP)

Analysis of customer financial information is especially important when deciding whether or not to extend credit. The use of credit and short-term financing accounts for over $2 trillion annually in the U.S. Extending credit to customers who are good credit risks can greatly improve profitability. Extension of credit is based on specific standards and criteria, and credit terms must be clearly outlined and consistent for anyone who meets those criteria.

Explain communication techniques that support and encourage a speaker (PQ)

Communication techniques include using your own body language and facial expressions to respond to the speaker. For example, sit up straight or lean toward the speaker to show that you are interested. React to the speaker with comments or questions. Taking notes keeps you involved in listening to the speaker and shows your level of interest. Maintain eye contact and minimize distracting thoughts and activities.

Explain the concept of competition (CS)

Competition is the struggle among businesses for customers. As an essential component of the free enterprise system, competition forces businesses to produce quality goods at reasonable prices. Competition also encourages businesses to develop new products, enhance or improve existing products, and expand product selection in order to attract new customers. Businesses compete in two ways: price and nonprice competition. Price competition assumes that, with all other considerations being equal, a customer will buy the lowest-priced product. Nonprice competition is where businesses compete on factors such as product quality, business location and reputation, customer service, and payment or financing options available. A monopoly exists when there is no competition in the market for a particular good or service. Monopolies are not permitted in a free enterprise system.

Discuss the nature of convergence/consolidation in the finance industry (SP)

Convergence or consolidation in the finance industry is the practice of businesses, such as banks and insurance companies joining forces with each other in order to offer customers a broad range of financial services. In one way, banks can create an insurance subsidiary or sister company to produce insurance products. In another, a bank can offer insurance products through a joint venture with an insurance company. Companies would do this to improve profitability by increasing their fee income and expanding their product/service mix. It also helps to reduce the cost of locating and securing new customers.

Explain the purposes and importance of credit (CS)

Credit enables businesses or individuals to obtain products or money in exchange for a promise to pay later. Businesses use credit to buy materials and supplies from other businesses. Credit makes it possible for millions of people and companies to purchase goods and services who otherwise would not have the means to do so. By extending credit, businesses provide a purchasing incentive to customers, thus enhancing their sales revenue and supporting the overall economy.

Explain how to maintain customer records (SP)

Data about customers and their buying habits is kept in a computer program called a database. Data can be about customers' contact or other personal information, or it can be about their purchase/account history. This data can be developed from face-to-face sales, direct mail responses, phone or e-mail purchases, service requests, website visits, customer comment cards, or they can be purchased from a third party. Database programs act like filing cabinets that allow you to sort, find, choose, and organize information.

Describe data mining tools and techniques (SP)

Data mining is the process of analyzing data using statistical techniques in order to discover trends and make predictions. Two common techniques are regression and classification. Regression takes a numerical dataset and develops a mathematical formula that fits the data. This formula can then be used to make predictions using future data. The classification technique uses a decision tree that requires a series of decisions. Other data mining techniques include clustering, bagging, boosting, stacking, and meta-learning.

Demonstrate responsible behavior (PQ)

Demonstrating responsibility means being willing to accept an obligation and being accountable for an action or situation. One can demonstrate responsibility in a myriad of ways. Be willing to accept change and volunteer for jobs and tasks. Display initiative by doing what needs to be done without being told. Be punctual and have a solid work ethic.

Describe the role of financial institutions (CS)

Financial institutions serve a variety of purposes that benefit consumers, businesses, and the overall economy. Savings, investing, and payment services (such as a checking account) are basic services of many institutions. Borrowing and credit are essential services that keep the economy moving. A variety of other services may be offered, such as insurance, investments, tax assistance, and financial planning services.

Adjust to change (PQ)

Flexibility allows you to adapt to changing circumstances. A flexible person can learn from others, accept criticism, and grow. To develop flexibility, listen with an open mind. Be willing to try new approaches.

Explain the concept of Gross Domestic Product (GDP) (SP)

Gross Domestic Product (GDP) is the output of goods and services produced by labor and property located within a country. GDP is one measure of a nation's productivity, or the output of workers in a given period of time. GDP is made up of several elements: private investment, government spending, personal spending, net exports of goods, and change in business inventories. Two types of GDP are nominal GDP and real GDP. Nominal GDP is stated in the price levels in which the GDP was measured; real GDP is the nominal GDP adjusted for changes in prices. Calculate GDP as follows: add private business spending, government spending, and personal spending. Then either add a trade surplus or subtract a trade deficit, and either add expanding inventories or subtract shrinking inventories. A similar measure to GDP is Gross National Product. GNP is the total dollar value of goods and services produced by a nation, including those produced outside of its own territory by its own citizens.

Demonstrate honesty and integrity (PQ)

Honesty and integrity are desirable qualities of a good employee and a good person. You can demonstrate these qualities by being loyal and trustworthy at work and in daily activities. Act responsibly and ethically, even though it may be difficult at times. Respect others' feelings and possessions. Being dishonest can ruin your reputation and can harm personal and professional relationships.

Explain the nature of import/export law (SP)

Imports are any resource, good, or service that producers in one country sell to buyers in another country. Exports are any resource, intermediate good, or final good or service that a buyer in one country purchases from a seller in another country.

Manage the bid process in purchasing (SP)

In the process of soliciting bids, a company's buyer invites qualified suppliers to submit proposals for the goods, services, or materials. In complex purchasing situations, the buyer may require a detailed written proposal from a number of qualified suppliers. The buyer will review and evaluate the proposals and possibly invite one or more of them to make a formal presentation of the bid. The choice of a supplier is dependent upon specific desired attributes of both the supplier and the proposal. Attributes include price, supplier reputation, product reliability, service reputation, and supplier flexibility. As part of the selection process, buyers and sellers will need to negotiate the final terms of the agreement.

Demonstrate initiative (PQ)

Initiative means taking action and doing what needs to be done without being asked. One can demonstrate initiative by acting upon new ideas. Demonstrating initiative shows interest and enthusiasm as well.

Discuss the global environment in which businesses operate (SP)

Many businesses must rely on resources beyond the borders of the U.S. to remain competitive. The overall economy is also reliant on a global marketplace. Foreign trade provides many goods that would otherwise be unavailable or too costly. Likewise, foreign consumers help support businesses in the U.S. by buying goods made here. Several factors affect the environment of the global marketplace including geography, culture, economic development, and political or legal concerns. Trade barriers, such as quotas, tariffs, and embargoes, are formal political actions that can affect international trade. Informal trade barriers can also be found due to cultural differences among nations.

Handle and report emergency situations (CS)

Many companies are required to have an emergency action plan. This discusses how to report hazards, such as fires, spills, and the like. It pinpoints where to find emergency supplies such as flashlights and first aid kits. An emergency response team may be developed, and escape routes should be outlined. It is also important to specify how to evacuate people with disabilities or other special circumstances. In addition to hazards, workplace violence—internal or external—must be considered.

Explain the use of technology in accounting (SP)

Most businesses use some type of accounting software to record and report their business transactions. Even when using an automated system, you still need to collect and keep your source documents and each business transaction must be separated into its debit and credit parts. Computerized posting to accounts is faster and eliminates accounting errors that a person might make doing it manually. Daily, weekly, monthly, and annual reports can be generated quickly and accurately. Software is also available for tax collection and reporting.

Discuss the impact of cultural and social environments on global trade (SP)

Multinational business is not without difficulties to overcome. Businesses must consider language and cultural differences. Also, there are differences in the stability of the government that might result in political risks. Different economic philosophies may lead to more or less government influence on business in a particular country. In addition, businesses have to deal with different monetary systems with fluctuating values among global currencies. Doing business in other countries often means taking a different approach to business relationships and management practices, and even different ethical beliefs.

Utilize note-taking strategies (CS)

Note taking helps you remember facts and keeps your attention focused. Do not try to write down everything that is said; focus on key words and main ideas. Jot down summaries in your own words. Take note of actions you need to take. Use bulleted lists, asterisks, and arrows to show relationships among ideas. Review your notes to make sure you understand concepts and instructions. If you cannot take notes, make mental notes of the main points.

Explain the nature of financial needs (e.g., college, retirement, wills, insurance, etc.) (CS)

One aspect of developing a financial plan is to know the difference between your needs and your wants. Furthermore, you need to prioritize your needs and wants as you set your financial goals. As you do so, keep in mind your attitude toward money and ask yourself if something is more important to spend money on now or to save for the future. Having choices with money comes with a cost and with risk. Opportunity cost is the trade off of giving something up when choosing one thing over another. Financial risks that you should consider include the risks of inflation, rising or falling interest rates, loss of income, and liquidity. Liquidity is the ability to convert assets into cash without loss of value.

Explain the concept of productivity (CS)

Productivity is defined as the output per worker hour that is measured over a set period of time, such as a week, month, or year. It is a ratio of input to output and a measure of efficiency. Higher productivity increases profits and leads to higher living standards. Businesses can increase their productivity by investing in new equipment, technology or facilities, providing additional training to staff or increasing the responsibilities of workers. In the economy, productivity is an essential source of income.

Respect the privacy of others (PQ)

Respecting others' privacy includes treating the conversations, property, and work of friends and coworkers as if they were your own. At work, be respectful of the phone calls, faxes, email, voice mail, and documents of others. Many of these things should not be shared with others, and much of the information at your workplace must be kept confidential. Confidentiality means not sharing sensitive information that you know with someone else. These acts of professional courtesy are also part of displaying workplace etiquette. Failing to respect others' privacy can harm your personal and professional relationships, including being disciplined or fired on the job.

Discuss the nature of risk control (i.e., internal and external) (SP)

Risk is the possibility of incurring a loss, and there are several categories of risks. Some risks are controllable, while others are not. Likewise, you can insure some risks while others cannot be insured. To manage risks, they can be avoided, transferred, insured, or assumed. Managing risk starts with risk avoidance. Sometimes avoiding a risk is practical, other times it is not. You cannot avoid all risks, but you can reduce their likelihood in many cases by taking preventative measures. This is risk reduction. Sometimes you need to take on responsibility for a risk, such as when you know the possible loss will be small. This is called risk assumption, and it may mean not buying insurance for something or self-insuring it. The most common way to deal with risk, especially large risks, is to shift it, usually to an insurance company. Risk shifting takes the financial burden of a risk and places it elsewhere for a fee.

Explain the concept of self-esteem (PQ)

Self esteem is the way you perceive your worth or value as a person. It is an important interpersonal skill that allows you to believe in yourself and helps you relate positively to others. You can demonstrate positive self esteem by treating others with respect and friendliness, dressing appropriately on the job, and behaving in a confident yet courteous manner.

Extract relevant information from written materials (PQ)

Several factors strongly affect comprehension of material. To start with, the reader must have the background vocabulary, language competence, knowledge, and experience necessary to comprehend the message. Of these, vocabulary is the most important factor in the ability to comprehend. Many strategies can be utilized to extract relevant information. One method is to use prereading assistance devices such as advance organizers, mapping, questioning, and prepared reading guides. Another is to identify the main idea in a passage or paragraph. It also helps to identify clues such as bold print, headings, indentations, and cue words.

Explain the nature of stress management (SP)

Stress is a person's reaction to pressures from the outside world. It can be mental or physical. Managing stress is important to a healthy lifestyle and effectiveness in the workplace. Stress can be harmful, causing undue anxiety and suppressing the body's immune system. Three things are essential to help prevent or reduce stress: regular exercise, a balanced diet, and enough sleep. Researchers emphasize engaging in recreational activities as a way to manage stress. In times of stress, it is important to make reasonable compromises and learn to accept those things you cannot change about the world around you.

Identify ways that technology impacts business (PQ)

Technology allows the speed of business transactions to occur globally; financial transactions are becoming instantaneous. Customers have come to expect more choices and higher levels of customer service due to advances in technology. Furthermore, they are able to access more information on which to compare prices, research choices and features, and base their buying decisions.

Discuss the role of ethics in accounting (SP)

The AICPA Code of Professional Conduct outlines a number of rules regarding ethics in accounting. A company must keep an accurate, honest, and complete record of its accounting transactions. Company audits should be carried out by an independent party. Confidentiality must be maintained with regard to clients' personal information as well as company information. Efforts must be made to avoid conflicts of interest between employees and customers. Ethical accountants exercise due care in the performance of their professional services. They should also be educated about insider trading as an unethical practice. Accountants must refrain from misrepresenting the facts to achieve short-term goals that are contrary to a business' long-term objectives. Internal auditors work independently within a business to review and improve the company's operations. They use strict standards to ensure the business sticks to its agreements, to design plans to protect assets, and to make the best use of company resources.

Identify methods for evaluating vendor performance (SP)

The criteria for selecting and evaluating vendors include production capabilities, past experience, product quality, the availability of special buying arrangements or services, and pricing. When dealing with a vendor for the first time, buyers might solicit references to determine the vendor's reputation. Many businesses maintain resource files and journals that document past experience with vendors. Such a journal may include an evaluation of product quality, delivery performance, and customer service. Returns relating to the quality of products may cause a vendor to be dropped.

Explain legal issues associated with information management (SP)

The government has regulations regarding protecting the privacy of consumers. Businesses of all types offer detailed privacy policies to their customers that ensure the protection of their customers' personal information. Businesses must not share personal information they collect with anyone unless you give them permission to do so, according to law.

Discuss licensure and certification available to finance professionals.

The requirements for certification and/or licensure for finance professionals vary from state to state. In some cases, planers must pass an exam in order to become licensed. Available credentials include Certified Financial Planner or Chartered Financial Consultant. The Securities and Exchange Commission monitors financial planning companies.

Explain the time value of money (CS)

The time value of money is the increase of an amount of money due to interest earned over time or dividends paid. It is the idea that money invested now is worth more later because you would earn interest or dividends on it. Interest is money you earn over time as a percentage of the principal, or the original amount of money on deposit. Finding the future value of your original deposit is called compounding. With compounding, your money increases in value faster and faster over time. Figure the future value of your money by multiplying the principal by the annual interest rate, and then adding the interest to the principal. You can determine this future value for as many years as your money will be in an account.

Explain the use of feedback for personal growth (PQ)

The way feedback is given often affects the way you accept it. Destructive criticism focuses just on the bad things and gives the recipient no help. Conversely, constructive criticism is designed to be helpful. It is said calmly with a focus on the problem, not the person, and suggestions for improvements are given. Anyone who is new to a job must expect criticism. One can control his/her reaction to feedback. Maintain a positive attitude and try to avoid getting defensive. People who respond to negative feedback in a positive way generally impress others. Those who work on correcting their weaknesses tend to move ahead in their careers. When giving feedback, it is important that your message be clear and easily understood. Give feedback in a nonthreatening manner, discussing problems with others one-on-one when possible.

Evaluate quality and source of information (CS)

To evaluate source data, consider the following: Is the subject matter consistent with the defined problem or issue? Do the data apply to the population and/or time period of interest? Do the data appear in the correct units of measurement? Do the data cover the subject in adequate detail? Is the data accurate and timely? Can the accuracy of the data be verified? Is/are the data source(s) reputable? Is the cost of data acquisition worth it? Is there a possibility of bias?

Prepare simple written reports (SP)

Two types of simple written reports exist. A formal report is generally long, analytical, and impersonal, often containing preliminary and supplementary parts. An informal report is shorter and written in a less formal style. They generally have no preliminary or supplemental parts and are concerned with everyday topics. Both types of reports may be organized in direct order (if the report is routine or you expect a favorable response from the reader) or indirect order (when persuasion is necessary or if the subject matter is negative). The steps in planning both formal and informal reports are to 1) identify the problem, 2) decide on areas to investigate, 3) determine the scope, 4) plan the research, 5) develop a preliminary outline, 6) collect the data, and 7) analyze the data, draw conclusions, and make recommendations. Three parts of an informal report include opening, body, and closing. The parts of a formal report are the preliminary parts, body, and supplementary parts. Most formal reports follow specific formatting guidelines with respect to margins, spacing, and headings.

Adapt written correspondence to targeted audiences (SP)

When analyzing your audience, consider several questions. How important will the audience see your message? Does your communication ask the audience to take some action? How much information does your audience need? What obstacles must you overcome? What are the benefits to your audience of what you have to communicate? How will your audience use this information? What method of communication is best suited to this message? In addition, you should consider how formal and how detailed you wish your communication to be. Use language and terminology that are appropriate to the audience.

Describe the relationship between economic conditions and financial markets (SP)

When investors are optimistic about the economy, they are more likely to purchase stocks. This is called a bull market. On the other hand, a bear market is when investors are pessimistic about the economy and are likely to sell stocks. When the demand for stock increases, stock values individually and as a whole increase. Likewise, a decline in demand for stocks will cause a drop in stock values.

Validate credit history (CS)

Your credit history is maintained in a credit report from one of three credit bureaus in the U.S.—Experian, Trans Union, and Equifax. Your credit history also includes a credit rating—a number that reflects your ability and willingness to make credit payments on time. You can validate your credit history by obtaining a copy of your credit report from each of the three reporting agencies. You can obtain a copy free of charge one time per year from each agency. Once you receive a credit report, look it over carefully for errors or out-of-date information, and be sure to contact the agency promptly to make corrections.

Describe the nature of budgets (SP)

A budget is a formal, written statement of expected revenue and expenses for a future period of time. To be effective, a budget should be evaluated periodically with actual income and expenses. Revenues may include cash sales, collections on accounts receivable, and other income. Expenses include purchases, insurance, taxes, payroll, and many other things. As part of budgeting, one should follow the following steps. Set goals and prioritize them. Estimate your income. Budget for unexpected events, fixed expenses, and for variable expenses. Record what you spend. Review your spending patterns and revise your goals as needed.

Explain the concept of economic resources (CS)

A resources is any item that can be used to produce goods and services. Natural resources include anything that comes from nature, such as land, water, or oil. Human resources are people, the work they do, and the skills they possess. Capital resources include materials used in the production of goods and services, such as money, machines, or other goods. All of these economic resources are limited. The basic economic problem is how to meet unlimited wants with limited resources. This gap is a condition called scarcity.

Adapt communication to the cultural and social differences among clients (CS)

Begin by respecting differences among people. Another key is to avoid and overcome stereotypes. A stereotype is an oversimplified, distorted belief about a person or group. Keep an open mind and treat people with respect and you will maintain smooth relationships. In business, you must maintain an awareness of the language and cultural differences that will affect company employees as well as customers.

Explain the role of business in society (CS)

Business' roles in society are many. They make and distribute the goods and services we use each day. Business' provide employment for millions of people. Wages paid to business employees are used in the economy to purchase goods and services. Profits earned by businesses are used to compensate owners and investors. Businesses also pay taxes, which support government spending on the needs of society.

Explain the nature of effective communications (PQ)

Communication is the process of exchanging messages between a sender and a receiver. Effective communicators need to understand channels of communication and media, effective listening skills, barriers to communication, and non-verbal cues. In addition, one must be prepared to read for meaning, speak properly, and write effectively. Channels (or media) are the avenues through which a message can be delivered. The choice of medium depends on the nature and importance of the message. Effective listening allows a person to identify the purpose of the speaker, give feedback, and evaluate the speaker's message. Communication may be impeded by a number of barriers, including physical such as distance and position from the speaker, and verbal as in using vague or unclear language. Lastly, a person's non-verbal cues—such as his or her tone of voice, emphasis, and body language—are critical because they often communicate as much as the speaker's actual words.

Demonstrate connections between company actions and results (e.g., influencing consumer buying behavior, gaining market share, etc.) (SP)

Company actions that affect consumers include: advertising, pricing, product mix, supply of goods, sales and promotions, product development and improvement, product safety, payment options, etc. Company actions that affect the competition include: advertising, pricing, product mix, supply of goods, sales and promotions, distribution methods and locations, etc. Company actions that affect employees include: the use of technology in production and record keeping, managerial ethics, human resources management, production planning and scheduling, risk management, investing, etc. Other actions to be considered include company actions that affect things like the environment, the global economy, etc.

Analyze company resources to ascertain policies and procedures (CS)

Company policies can be obtained through training information, company manuals, work mentors, and supervisors. Policies to consider are topics of pay, sick/vacation time, promotions and raises, and the company's health and safety procedures. Company policies should be read thoroughly for complete understanding.

Discuss the nature and scope of compliance in the finance industry (SP)

Compliance with laws, rules, and regulations is often handled by a firm's compliance department or manager. The compliance department exists to support, advise, and train personnel about, as well as monitor various laws and regulations. A compliance program is viewed by management as a necessary component of an overall sound business strategy.

Discuss the nature of customer relationship management (SP)

Customer relationship management involves finding customers and keeping them satisfied through a variety of means. It is useful for developing and maintaining customer relationships. The sharing of customer information among businesses has led to privacy issues. The government has regulations protecting the privacy of consumers, including offering customers the option of being added to mailing lists.

Explain the role of ethics in customer relationship management (SP)

Customer relationship management involves finding customers and keeping them satisfied through a variety of means. It is useful for developing and maintaining customer relationships. The sharing of customer information among businesses has led to privacy issues. The government has regulations protecting the privacy of consumers, including offering customers the option of being added to mailing lists.

Explain the nature of effective written communications (CS)

Effective written communications require some basic considerations: knowing your audience, knowing your purpose, and knowing your subject. You must assess who your target audience consists of in order to which form of communication to use. Next, knowing your purpose for writing helps you organize your thoughts. You must decide if you are trying to inform, confirm, inquire, answer, or persuade the audience. Lastly, written communication requires that you have in-depth knowledge of the subject and how to relate what you know to the intended audience. The form of written communication you choose to use will depend on the above considerations. Letters are formal methods of communicating outside the business. E-mail is an informal method used to reach those inside or outside the company. Memos, while being replaced by e-mail, are a more formal way to communicate within a company. Business reports are for lengthy topics, typically for internal use or for stockholders. Similarly, company publications may be used internally (for company policies) or externally (for marketing purposes).

Describe the nature of emotional intelligence (PQ)

Emotional intelligence is a set of personal skills in the following areas. x Foster self-understanding to recognize the impact of personal feelings on others. x Develop personal traits to foster career advancement. x Apply ethics to demonstrate trustworthiness in working with others. x Exhibit techniques to manage emotional reactions to people and situations. x Identify with others' feelings, needs and concerns to enhance interpersonal relations. x Use communication skills to foster open, honest communications. x Use communication skills to influence others' point of view. x Apply problem solving techniques to obtain solutions to issues and questions. x Manage stressful situations to minimize negative workplace situations. x Implement teamwork techniques to accomplish goals. x Employ leadership skills to achieve workplace objectives. x Manage internal and external business relationships to foster positive interactions.

Show empathy for others (PQ)

Empathy is an understanding of another person's situation or frame of mind. On the job, you should be open-minded, realizing that many people are under pressure. Treat others considerately, and call on your own experiences. Before you react to someone, think of the position the other person is in. You may see things differently, and your reaction may be more effective. Be aware of how you appear to someone else, trying not to hurt or offend them. Speak carefully, and think about the way others will feel when they hear what you have to say. Let other people know you are interested in them, smile, and make them feel important. Do not assume that certain behaviors and views are universal; many people in the world have ideas that are very different from yours.

Determine ways of reinforcing the company's image through employee performance (CS)

Employee performance can reinforce a company's image through suggestion selling, order processing and fulfillment, and effective selling skills. Suggestion selling is useful for making the customer happier with his/her original purchase. Sales employees can improve customer satisfaction by the speed and care in which they handle orders. This applies, as well, to handling returns and refunds. Selling skills, such as an appropriate, pleasant greeting and a reassuring departure are useful tools in maintaining a good image. Offer helpful comments during and after a sale and always thank the customer in order to build a good relationship. Follow up on all promises made to a customer, and check on their level of satisfaction after a purchase. Positive customer-client relations require compassionate and immediate action when dealing with complaints and inquiries.

Discuss the nature of environmental law (SP)

Environmental law means the laws that regulate the impact of human activities on the environment. Environmental law covers a broad range of activities that affect air, water, land, flora or fauna. The general functions of most environmental laws are to: x set offences and penalties for causing harm to the environment which is not authorised x assess, control or stop certain activities (such as land use and development) before they are carried out x set policies and standards for how activities will be controlled and how environmental decisions and approvals will be made x enable members of the public to take part in environmental decision-making x create regulatory structures for environmental management, such as regulatory agencies (e.g. the Department of Lands, Planning and Environment) x create specialist courts and tribunals (e.g. the Lands, Planning and Mining Tribunal)

Explain the concept of ethical work habits (PQ)

Ethics are the basic values and moral principles that guide behavior. Characteristics of ethical work habits include honesty, respect, and equity. Being honest is more than just telling the truth. It means maintaining confidentiality and having respect for company property. Honesty is the basis for a trustworthy business relationship. Another solid base for business/customer relations is showing respect. This means listening to others with an open mind and responding with courtesy and tact. Equity means that everyone has equal rights and opportunities. Because people expect to be treated the way those around them are treated, it is important to be fair and equitable in dealing with others.

Explain the role of finance in business (CS)

Finance is the function of business that pertains to money management. A financial plan is an important element of an overall business plan. Elements that pertain to the role of finance in a business include start up/equity financing, debt financing, and growth financing. Various financial statements, such as a balance sheet and income statement, provide a way to analyze a company's overall financial standing. Managing your business' finances will include planning for profits by forecasting sales, evaluating profit potential, controlling costs, and budgeting. Business financing also requires managing taxes and credit.

Demonstrate financial analysis applications (SP)

Financial analysis software applications are available to help you seek out more in-depth answers to financial questions. These applications go beyond basic financial statements to help you develop financial goals, set forecasts, and perform what-if scenarios. In addition, you can create professional reports of the results of your detailed analysis with such software. Using financial analysis applications makes performing advanced financial analysis quicker, easier, and more visually appealing than with basic spreadsheets.

Explain the concept of accounting (CS)

Financial information for a business can be recorded, summarized, and reported in a variety of ways. The way in which information is kept and reported is determined by the size, type, and complexity of a business. Businesses should also consider the types of decisions that will be made when designing an accounting system. Types of information to be gathered include purchases, sales, expenses, and payroll. There are two basic types of accounting methods: cash and accrual. In the cash accounting method, income and expenses are recorded at the time the money changes hands. The accrual method of accounting records transactions at the time they occur even if no money changes hands at that time. Accounting records show changes and the current account balance of each asset, liability, and owners' equity account. The recording of debit and credit parts of a transaction is called double-entry accounting. A record summarizing the information relevant to a single item in the accounting equation is called an account. With every action, at least two accounts will change. A group of accounts is called a ledger. A form for recording transactions is called a journal.

Discuss legal considerations in the finance industry (SP)

Financial services businesses are required to protect the privacy of the consumer information they collect. They must give consumers privacy notices that explain the company's information-sharing practices. Customers of a financial services business have the right to limit the sharing of their personal information. Additionally, information security is an important consideration in the finance industry, as companies are required to keep customer information secure.

Explain the use of financial information to identify trends (SP)

Financial statements are used to determine profitability, efficiency, and short- and long-term financial strength. Trend analysis is the comparison of the relationship between one item on a financial statement and the same item on a previous year's statement. Trend analysis can be used to help predict how well a business will do in the future. Businesses analyze financial data in a variety of ways. An income statement is used to analyze component percentages and earnings per share. The statement of stockholders' equity will be used to assess equity per share and price-earnings ratio. Balance sheet information is used to determine accounts receivable turnover ratio, the rate of return on stockholders' equity, and the rate earned on assets.

Explain the nature of statements of changes in equity (SP)

Financial-information management deals with gathering, organizing, storing, analyzing, and reporting financial data. Managers make use of a financial information system, typically with electronic data collection and maintenance software. A short list of goals of a financial-information manager include making efficient use of cash, maximizing return on investment, and optimizing asset value and resource use. Other duties include matching resources to the business' activities, identifying sources of financing, reducing and recovering expenses, studying past resource usage to determine future budget requirements, and forecasting, controlling, and preventing risks.

Explain the nature of global trade (SP)

Improvements in technology, communication, production, and distribution methods have enhanced the global business environment. Information exchange can be nearly instantaneous. The movement of raw materials and finished goods can be cone more quickly and easily. Trade agreements among nations and regions of the world reduce restrictions on trade. These factors allow for lower-cost production and more access to consumers than ever before. Corporations are often forced to compete multinationally, and their decision making must adjust to reflect a global marketplace. Companies invest in international business ventures for a number of reasons, including: expanding their markets, increasing their operating efficiency and reducing costs, reducing political and legal hurdles they might otherwise face in other countries, diversifying their operations, and gaining greater return on their investments. Multinational business is not without difficulties to overcome. Businesses must consider language and cultural differences. Also, there are differences in the stability of the government that might result in political risks. Different economic philosophies may lead to more or less government influence on business in a particular country. In addition, businesses have to deal with different monetary systems with fluctuating values among global currencies.

Explain the principles of supply and demand (CS)

In a market-oriented economy like in the United States, supply and demand determine the prices and quantities of goods and services produced. Supply is the amount of goods and services producers are willing to make and sell. Demand is the willingness and ability of consumers to buy goods and services. Supply and demand interact in the marketplace resulting in a state of equilibrium, surplus, or shortage. The law of supply states that price and quantity supplied move in the same direction (a direct relationship). Thus, as price increases, the amount of goods and services supplied increases. Conversely, the law of demand states that as price increases, the amount desired by consumers will decrease (an inverse relationship). When the amount of a product/service being supplied equals the amount being demanded, equilibrium exists in the marketplace at that price. If, however, there is more supply than demand for a product a surplus exists, potentially leading to lower prices. A shortage exists when demand exceeds supply, a condition that can lead to rising prices.

Describe the use of technology in compliance (SP)

Information technology is often the hub for compliance issues in a business. Issues include security, data retention and archiving, asset management, and performance issues. Technologies such as passwords, encryption, physical controls, and automatic logouts are a few methods to manage business' compliance goals. Software applications can scan activities over a network to look for, and possibly stop inappropriate or dangerous activities.

Maintain inventory of supplies (CS)

Inventory management is the process of buying and storing materials and products while controlling costs. There are several inventory control methods. Just-in-time inventory systems coordinate the demand and supply for parts and supplies, delivering them just before they are needed. A perpetual inventory system constantly keeps track of the number of items in inventory, and can be done manually or by computer. In a physical inventory system, supplies are counted only occasionally by visual inspection. This can be done manually or through the use of technology, such as bar code scanners.

Explain the need to save and invest (CS)

Investing and setting savings aside is essential to reaching financial goals for the future. Saving money in an emergency fund is desirable so that you can have access to money quickly to pay for unexpected expenses, emergencies, or job loss. Savings accounts provide security but do not increase in value quickly. Investments can provide much greater returns, however they are more risky. Saving and investing money is important also due to the time value of money, in which money invested now is worth more later because you would earn interest or dividends on it.

Explain marketing and its importance in a global economy (CS)

Marketing is the process of planning, pricing, promoting, and distributing ideas, goods, and services to create exchanges that satisfy customers. The benefits of marketing are numerous. It provides the means for competition in the marketplace, leading to lower prices and higher quality goods and services. Marketing generates new and improved products and adds value (or utility) to existing products. The global marketplace benefits from marketing because of the need to trade with each other.

Discuss opportunities for building professional relationships in finance.

Networking is the premier way to make and maintain professional contacts. These contacts can be used to obtain job information and advice, as well as advancement opportunities. You should also consider building relationships by joining professional and community organizations. Attending meetings, seminars, and conferences can help build your network of professional relationships.

Explain how to interpret others' nonverbal cues (PQ)

Nonverbal communication refers to communication other than spoken language, including distance, eye contact, facial expressions, and gestures. Nonverbal cues can help you determine another's attitude and personal feelings. The distance you place between yourself and another can convey messages of attraction, interest, status, or respect. When you maintain eye contact, you show sincerity, interest, and confidence. Facial expressions are sometimes conscious and sometimes unconscious. They convey meaning, emotion, and attitude. Positive gestures, or hand movements, are often open, natural, and smooth. Negative gestures, such as crossing your arms, are more closed and rigid.

Demonstrate self—control (PQ)

People who exercise self-control take careful, measured steps and do not act on impulse or emotion. Self-control in the workplace allows you to stop and analyze a situation before reacting to it emotionally. This skill is very important when handling conflict. Self-control and orderly behavior inspire confidence in customers and coworkers. People who cannot control themselves tend to be perceived as overly emotional, irresponsible, inattentive, and uninterested in the customer. They may not be taken seriously.

Describe the functions of prices in markets (CS)

Price is the value in money placed on a good or service. One function of price is that it can affect the value that a customer places on an item. Price helps establish a company's or product's image—many customers use price as a gauge to make judgments about products and companies. Another function of price is that it can give a competitive edge. Thirdly, the price of an item is part of the business' end goal of making a profit.

Demonstrate problem-solving skills (CS)

Problem-solving involves a number of skills and steps. The first step is to identify the problem and make sure you have a clear understanding of it. As you begin to consider solutions, generate a variety of alternatives. Think creatively and brainstorm with others. Make an honest evaluation of the possible results of the solutions presented, considering both the positive and the negative. Make a decision that is the best one under the circumstances and put the solution into action, identifying the exact steps that should be followed and by whom. Afterward, evaluate the results.

Analyze impact of specialization/division of labor on productivity (SP)

Productivity is the measure of worker output over a given period of time. Specialization and division of labor are important elements to increasing productivity. The theory behind this is that work can be completed faster and more efficiently when workers specialize in a certain area of production. An assembly line is an example of specialization and division of labor. Specialization/division of labor can lead to a large increase in efficiency because it uses allocational efficiency (making the best use of a worker's skill) and technical efficiency (reducing the transition time between tasks). Specialization can also mean that individual countries can produce certain goods that they are best at producing and exchange them with other countries. This requires trade, reducing the problem of scarcity and increasing competition. Specialization does have problems, however: if workers do specific tasks and become bored, their productivity may fall; poorer countries may deplete their resources; over-specialization in one country can lead to over dependence on one particular commodity; and with increased specialization, there will be intense competition.

Determine factors affecting business risk (CS)

Risk is the possibility of incurring a loss. Economic risks are those that can result in a financial loss. Pure risk is one that presents the chance of loss but no opportunity for gain. Speculative risks offer the chance to either gain or lose. Some risks are controllable, while others are not. Likewise, you can insure some risks while others cannot be insured. To manage risks, they can be avoided, transferred, insured, or assumed.

Explain the role requirements of entrepreneurs and owners (SP)

Starting a new business requires a major commitment of time, money, and effort. A new business owner must be a risk-taker. It is often necessary to quit a job, work long hours, invest savings, and borrow money-all with no guarantee that the new business will succeed. Entrepreneurs and owners must also have certain characteristics, such as: determination, self-motivation, self-discipline, strong organizational skills, leadership abilitiy, etc. In addition, they must possess a good understanding of marketing and finance.

Describe the nature of taxes (SP)

Taxes are payments you make to the government for services they provide. The U.S. tax system is based on the idea that everyone should contribute their fair share, that tax laws should be clear and simple, and that the tax system should be flexible. Tax dollars are spent on a number of things including public education and libraries, military defense and law enforcement, transportation costs, and fire protection to name a few. Income tax is calculated as a percentage of the taxable income you earn on the job. Social Security, or FICA, tax is used so that workers can receive benefits upon retirement. Sales tax is a percentage of the price of an item that a person pays when they buy something. Estate and inheritance taxes are taxes on wealth, which are collected after a person has died. Property tax is the main source of money for many local governments, and is based on the value of property such as land and buildings.

Describe the use of technology in risk management (SP)

Technology used in risk management includes many options. Closed-circuit television systems monitor theft. Advanced point-of-sale terminals can generate computerized reports of sales activity and cash transfer. Entryway and exits can be controlled through security locking systems or electronic gates. Intelligent lighting systems can help protect merchandise and supplies at any hour. Anti-theft devices can be placed on merchandise.

Explain legal considerations for finance (SP)

The federal government regulates interstate commerce through the commerce clause of the U.S. Constitution. Securities regulation, especially the Securities Act of 1933 and the Securities Exchange Act of 1934, have been enacted to protect investors. These laws ensure that purchasers can learn the true nature of the securities they buy and provide a way to discover fraud and unfair practices. Included in the definition of securities are corporate stocks, interests in savings and loans, interests in racehorses or sports teams, and sales of coins. The Securities and Exchange Commission administers the laws regulating securities sales, brokers, dealers, and bankers who sell securities. The Federal Trade Commission was created in 1914 to protect businesses from the wrongful acts of other firms, especially referring to competitive practices. The Sherman Antitrust Act of 1890 was passed to stop the formation of monopolies. The Sarbanes-Oxley Act of 2002 contains important rules affecting the reporting and corporate governance of public companies and their officers.

Protect against identity theft (CS)

The first step to protecting your identity is to be cautious with sensitive information and documents, including your social security number, checking and other bank account numbers, and the like. Shred any documents that contain sensitive information before throwing them out. When paying with a credit or debit card, be sure the card is always returned to you after the purchase. You may wish to keep a record of your card numbers in a place separate from your cards. Also, always look over your bank and credit card statements carefully when you receive them for mistakes and unknown charges or withdrawals.

Describe types of business activities (CS)

There are six general business activities. Generating ideas is an important activity in that businesses must remain competitive with other firms. Businesses also need to raise capital to finance their operations. Another important business activity is employing and training human resources. Businesses buy and sell goods and services. Marketing is a group of activities that provide and distribute the goods and services wanted and needed by a business' customers. Another activity is that businesses must maintain records to track performance and make decisions.

Discuss the impact of a nation's unemployment rates (SP)

There are three main impacts of lingering unemployment on an economy: efficiency, inequality, and discouraged workers. Unemployment is inefficient in that it wastes human resources. It leads to inequality because those with the least experience tend to lose their jobs first, which are usually minorities and the young. Lastly, unemployed people tend to get discouraged about themselves and their abilities, and may give up their search for work. Unemployment is an important indicator of the overall strength of an economy. The higher the unemployment rate, the greater the chances of an economic slowdown. Likewise, the lower the unemployment rate, the greater the chances of an economic recovery. When more people are working, more people are spending money and paying taxes to help the economy grow.

Demonstrate budgeting applications (SP)

There is a vast number of budgeting applications available. Popular commercial software packages typically come with the following features. They allow you to see your inflows and outflows of money, including tracking your expenses to specific payees. You can view all of your financial accounts in one convenient place. In addition, you can set reminders to pay bills and make sure you have the funds to cover them. You may also have the ability to link your budget data to tax preparation software. More advanced finance software will allow you to manage your investments and taxes more easily, along with the capability to manage small business financing.

Discuss considerations in selecting a financial-services provider (CS)

When selecting a financial service provider, consider the following, depending on your needs. Consider one where you can get the highest rate of return on a savings account. You can obtain a checking account with low or no fees. You will be able to borrow money when you need it and at a favorable interest rate. You can get free financial advice. The institution is insured through the FDIC. It has convenient locations. It offers a broad range of financial services. It has online banking or other special services you may desire.

Explain the nature of balance sheets (SP)

A balance sheet is a summary of a business' assets, liabilities, and owners' equity. Assets are anything of monetary value that you own and are classified as current or fixed. A current asset is cash or anything that can be converted into cash in a year. A fixed asset is something used over a period of time to operate your business, like property and equipment. Liabilities are the amounts that a business owes and are classified as current or long-term. A current liability is a debt the business must pay back during the upcoming year. A long-term liability is a debt that is due after 12 months' time, such as a long-term loan. Owners' equity (or net worth) is the amount of ownership interest in the business. The difference between assets and liabilities equals the owners' equity.

Read and reconcile bank statements (PQ)

A bank statement is 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. Bank account reconciliation is when you account for the differences between the bank statement and your records (usually your checkbook register). The balances may differ because you have written checks that have not yet cleared the bank, or perhaps because you have deposited money into your account after the bank statement was prepared. To reconcile your account, start by comparing the checks you have written with those listed on the bank statement. List any outstanding checks on the reconciliation form. Subtract the total amount of outstanding checks from the ending balance on the statement. Next, add any recent deposits not on the statement to the reconciliation form. Finally, subtract any fees and add any interest as found on your bank statement to your reconciliation form. Now you should find that the adjusted bank balance and the balance in your records is the same. If there is an error, report it to your bank.

Determine the impact of business cycles on business activities (SP)

A business cycle is a series of recurring changes in economic activity. Four phases make up a business cycle: expansion, recession, trough, and recovery. During expansion, the economy is flourishing. It is a good time for businesses to start up or expand due to the increased output of goods and services. Recession is a time of economic slowdown lasting at least two quarters. Companies reduce their output during a recession, and consumers have less money to spend on goods and services. A prolonged recession is called a depression. A trough is the low point in a business cycle. It marks the beginning of the transition from recession/depression to recovery when signs of economic growth are near. In the recovery phase, demand increases and businesses respond by hiring more workers and supplying more goods.

Describe the nature of cash flow statements (SP)

A cash flow statement is a monthly plan that tracks when you anticipate that cash will come into a business and when you expect to pay out cash. One purpose of a cash flow statement is to determine whether you will have enough money to pay your bills on time. Another purpose is to secure a business loan, as most lenders will request at least a first-year cash flow statement. A cash flow statement itemizes how much cash you started with, what your projected cash expenditures are, and how and when you plan to receive cash. It also shows when you will need to seek out additional funds or when you will have additional cash remaining.

Identify types of currency (paper money, coins, banknotes, government bonds, treasury notes, etc.) (PQ)

A cash sale is any transaction in which the customer pays for the item with cash or a check. A check is a written document that authorizes the transfer of money to be drawn from a bank account to a person or business. Credit enables a business or individual to purchase goods and services in exchange for a promise to pay later. It is most helpful when consumers want to make major purchases. Customers are typically issued a credit card from a bank to make such purchases. Debit is a variation of credit. Consumers using a debit card authorize a seller to withdraw funds directly from the consumer's bank account at the time of sale.

Describe types of financial—services providers (CS)

A commercial bank is an institution that offers a full range of financial services, such as checking, savings, and lending. A savings and loan association is a service provider that may specialize in savings accounts and mortgage loans, but now offers a wide range of services. Mutual savings banks specialize in savings accounts and mortgages. Credit unions are nonprofit institutions that are owned by its members. Traditionally, the members of a credit union have a common bond such as employment with the same company. Credit unions offer a full range of financial services. Non-deposit financial institutions include life insurance, investment, finance, and mortgage companies. Such companies specialize in their respective industry but may offer other financial services as well. Finance companies offer higher interest rates loans to individuals and businesses that cannot borrow elsewhere, often due to credit problems.

Describe types of business models (SP)

A company's business model is a representation of its core business practices. Despite the size or industry in which a business operates, a business model details how an organization creates and delivers products or services, specific business processes, infrastructure, customer acquisition strategies and the intended customer base. Brick-and-mortar and e—commerce form two categories under which business can operate. In the current business environment, business models come in a variety of forms: Direct sales: x sales of products or services generate revenue through a network of salespeople who sell directly to customers x typically no fixed retail location individual salespeople are connected with a large parent company and given the tools to become individuaJ' entrepreneurs x takes place through presentations or demonstrations of the product or service in a one-on—one setting or during a hosted party at a prospect's home or business x business owners in direct sales earn a portion of their sales x the company providing the product retains the remaining revenue x e.g. Avon. Arbonne, Herbalife Franchise: x business owners purchase another organization's business strategy x franchisor: the company offering its proprietary product or service, its business processes, and its brand x franchisee: purchases an ownership stake m' a business model that has already been developed x franchise owners earn a portion of their revenue generated by their locations x franchisor collects licensing fees and a percent of sales revenue x eg. McDonald's, Subway, Starbucks Freemium: x for companies offer personal or business services via the lntemet often with little customer acquisition costs or high lifetime value x businesses give away a service (at no cost) to the consumer in order to establish foundation for future transactions x free basic-level service, then advanced services (add-ons) and advertisements-free options at a cost x e.g. Spotify, Skype Subsciption: x also known as recurrin'g business model x retain customers under a long-term contract x secure recurring revenue from repeat purchase of a product or service x customer may sign up for automatic payment plans, and cancellation fee for contracts that end prior to preset time frame x eg. Experian. Equifax

Explain the impact of political relationships within an organization (SP)

A company's culture affects the way it is organized. A formal culture may include a strict chain of command, with one person at the top making all decisions. Several levels of management, or bureaucracy, may follow. Job titles are important as indicators of power and status within a company in a business with a formal culture. Making changes and passing down decisions in such an organization can be complicated and time consuming. Other companies have an informal culture, where employees are encouraged to make their own decisions. In such a company, job titles are not as important as creativity and teamwork.

Explain the use of consensus-building skills (SP)

A consensus is a decision upon which each member of a group agrees. It is a critical component of teamwork as well as negotiation. To achieve a consensus, it is helpful to allow all members to state their opinions. It will often require members of the group to be flexible and accept a compromise. Allowing team members to be involved in setting and achieving the team's goals is important and often results in increased company loyalty and a stronger team spirit. Consensus building is also beneficial in that it leads to extra motivation and a sense of ownership among team members.

Describe the nature of legally binding contracts (SP)

A contract is an agreement that courts will enforce. There are six major requirements that must be satisfied before courts will treat transactions as contracts: Offer and Acceptance, Genuine Assent, Legality, Consideration, Capacity, and Writing. An offer is a proposal by an offeror to do something, provided the offeree does something in return. Acceptance occurs when a party to whom an offer has been made agrees to the proposal. Genuine assent means that parties have entered into a contract as evidenced by words or conduct between them. Of course, what the parties agree to must be legal. The purpose of consideration is to ensure that both parties are receiving something of legal value as a result. Capacity is the ability to understand that a contract is being made and its general meaning. Lastly, some agreements must be made in writing in order to be fully enforceable.

Describe the use of technology in the financiaI-information management function (SP)

A financial information system supports managers in the allocation and use of financial resources, including the financing of business activities. The activities are managed through a system of data collection procedures, computer technology, software, and electronic information exchange procedures. The use of technology can make it easier to gather and analyze information and make decisions regarding a company's products, resources, and budget. It can be used to improve the way business processes are completed, thus improving quality and efficiency and saving money. In addition, technology makes it possible to perform business processes in different locations to allow for business expansion and better use of resources.

Explain the concept of organized labor and business (SP)

A labor union is a group of workers who have joined together for the common purpose of improving the terms and conditions under which they work. Unions are formed to obtain higher wages, better benefits, and improved working conditions. When laborers organize, they are able to increase their bargaining power with business management. Two main types of unions exist today—industrial unions, made up of workers employed in the same industry, and craft/trade unions, which are groups of workers with similar skills. The AFL-CIO is the federation for nearly all labor unions, although some very large unions are independent of the federation. Labor union contracts are created through a negotiation process called collective bargaining, involving union officials and company representatives. If an agreement cannot be reached, pressure strategies may be imposed by either side, including strikes, picketing, and boycotts by union members or lockouts, injunctions, and strikebreakers by management. Several advantages and disadvantages exist for both sides in organized labor. Workers gain individual dignity, fair treatment, protection, and fringe benefits. However, they must pay union dues, support union decisions, and face hardships during strikes. Businesses benefit by having security regarding wages, benefits, and working conditions as well as having the union assist in recruiting and training employees. Businesses, though, face increased costs in wages and benefits, have limited control in personnel matters, and loss of production in the event of a strike.

Develop personal budget (CS)

A personal budget is a plan for saving and spending your money based on your income and expenses. Start your budget by defining your needs and your goals, considering both short- and long-term goals. Write them down in a list, with a target date or time frame to reach them. Next you will need to prioritize your goals, arranging the items in order of importance. Then you must estimate your income and your expenses. In your income estimate, include your wages or salary but count only your net (take home) pay. Other sources of income might include tips, gifts, and interest earned on a bank account. Estimate your expenses in two categories—fixed and variable. Fixed expenses are usually the same amount each time you pay them. Variable expenses are those that vary each month. Once these steps are completed, you create your budget. You can transfer your estimated income and expenses to a paper or computerized budget form. Indicate your savings on the budget, as well—you may want to consider this a type of expense. As you compare your income to expenses, you should see if you have enough money coming in to pay all of your expenses. It is important to be honest and realistic when creating your budget, even if it means revising some things. Also, check your progress monthly and review your spending carefully so you know if you have to cut back your expenses or increase your income.

Explain the nature of positive customer relations (CS)

A positive customer relations mindset means believing that your customers: deserve the very best, are your employers, deserve your focused attention, have the right to expect things of me, and have important problems and complaints. Positive customer relations yield benefits to the business, the employees, and the customer. Businesses benefit by being more competitive, obtaining repeat business, and greater profits. Employees may receive customer compliments and perhaps a raise or promotion for good customer service skills. Customers benefit by having a more pleasant, satisfactory buying experience. This creates an atmosphere of goodwill. Positive customer relations need to be demonstrated when speaking to customers in person, over the phone, or online. It should also be evident while handling complaints, inquiries, and requests. Demonstrate good customer relations by doing the following: considering and attempting to meet their needs, concentrating on them without distractions, following up with them, following through on what you say you are going to do, and being efficient in handling issues.

Identify the basic torts relating to business enterprises (SP)

A tort is a private or civil wrong against an individual or organization. There are three basic torts. An intentional tort is one for which the defendant intended either the injury or the act. The second and most common type of tort is negligence. Intent is not required for this tort, only carelessness. Strict liability is the third type of tort. This is liability that exists even though the defendant was not negligent. In strict liability, proof of both the activity and the injury substitutes for proof of violation of duty.

Discuss the role of administrative law (SP)

Administrative law is the branch of law governing the creation and operation of administrative agencies. It encompasses laws and legal principles governing the administration and regulation of government agencies (both Federal and state). Such agencies are delegated power by Congress (or in the case of a state agency, the state legislature) to act as agents for the executive. Generally, administrative agencies are created to protect a public interest rather than to vindicate private rights. Governmental agencies must act within Constitutional parameters. These and other limits have been codified into statutes such as the Federal Administrative Procedure Act (FAPA) and state analogs. The FAPA is a remedial statute designed to ensure uniformity and openness in the procedures used by federal agencies. The Act is comprised of a comprehensive regulatory scheme governing regulations, adjudications, and rule making in general terms. The FAPA is the major source for federal administrative agency law, while state agencies' administration and regulation are governed by comparable state acts.

Explain the nature of agency relationships (SP)

Agency is a relationship between a principal and an agent in which the principal confers his/her rights on the agent to act on behalf of the principal. An agency relationship is fiduciary in nature and the actions and words of an agent exchanged with a third party bind the principal. The most common agency relationships are: Buyer's Agency; Seller's Agency; Dual Agency. In a buyer's agency relationship, the buyer is considered the client. A buyer's agent has to be loyal, maintain confidentiality, be obedient, provide reasonable care and diligence, and give accounting for all funds. Similarly, a seller's agency relationship represents the seller in the transaction and the seller is considered the client. A seller's agent is also known as a listing agent. The seller's agent possesses the same fiduciary responsibilities to the seller as the buyer's agent has to the buyer. In a seller's agency, the client relationship is established through a listing agreement. Whereas, in a dual agency, an agent represents both buyer and seller in a single transaction and carries fiduciary responsibilities to both principals. The mistake of an agent acting as a dual agent becomes a mutual mistake of fact by both principals. This prevents one principal to make the other principal liable for the mistake of the agent[i]. However, knowledge or notice to a dual agent is not imputed if the agent acted adversely or fraudulently[ii]. Dual Agency is only permitted with the informed and voluntary consent of both the buyer and the seller.

Explain how to conduct an environmental scan to obtain business information (SP)

An environmental scan is an analysis of outside influences that may have an impact on an organization. It is a methodical look at the world that includes political, economic, sociocultural, and technological areas. It is important to understand how each of these areas may be changing in order to determine the potential for opportunity or threat to a business. Political factors include the stability of a government and its laws and regulations that affect business. Economic factors include infrastructure, quality and cost of labor, employee wages and benefits, taxes, the standard of living, and possibly foreign exchange rates. In international business, socio-cultural factors include understanding another country's language, values, traditions, and social/business etiquette. Keeping up to date with technology and using it properly are other factors of an environmental scan.

Describe the determinants of exchange rates and their effects on the domestic economy (SP)

An exchange rate is the value of one currency in terms of another, and they are established on the foreign exchange market. This is a series of interconnected entities that exchange currencies, including businesses, banks, and governments. The exchange rate for a country's currency is determined by the supply and demand for that currency. This is impacted by foreign trade. The difference in the value of a country's imports and exports affects supply and demand, which affects exchange rates. For instance, if the U.S. is importing more goods than it is exporting, it will need to convert more U.S. dollars to other currencies. By doing so, the demand for other currencies increases and the exchange rate for U.S. dollars increases.

Write executive summaries (SP)

An executive summary may also be called an abstract or a synopsis. Its purpose is to summarize the key points of a report to the reader. An executive summary is often used with the report is long and/or technical so that busy readers can get the main points quickly without having to read the entire report. The format of an executive summary should match the main report. If the report is written in direct order, write the executive summary in direct order. An executive summary is typically a one-page document. The formatting may not match exactly the report that follows. Line spacing and headings may be different between the two, and it is usually not numbered in sequence with the body of the report.

Describe the nature of income statements (SP)

An income statement is a summary of a business' income and expenses during a specific period of time. Often called a profit and loss statement, it is used to calculate revenue, costs and expenses, and profit/loss. Income statements have several major parts: total sales, net sales, cost of goods sold, gross profit, operating expenses, other income/expenses, net profit/loss before taxes, and net profit/loss after taxes. Some of these figures must be estimated or projected, such as total sales and business expenses.

Describe the concept of insurance (CS)

An insurance policy is a contract between a business or individual and an insurance company to cover risks. Business risks include economic risks, natural risks, and human risks. Insurance companies estimate the probability of loss due to risk and determine a rate to charge for the policy, called a premium. Property insurance is one common type of insurance, which covers loss or damage to buildings and equipment. Property insurance can be purchased to cover full replacement cost, automatic increase protection, and business interruption. Liability insurance is a form of insurance that protects against damages for which a business or individual may be liable, including injury or property damage to others.

Use appropriate assertiveness (PQ)

Assertiveness is standing up for what you believe. People will respect you if you can be assertive without being pushy or aggressive. Show confidence and speak with authority. For example, suppose you are working with a client who ridicules your opinion. In a very professional and respectful way, you should reassert your contribution. Be sure to point out its strengths in a clear and precise manner. Offer support for any claim that you make. Valid evidence will put you in a strong position to influence others. Assertiveness is a skill that takes time to learn. Confidence in being assertive comes with experiences and patience.

Describe current business trends (SP)

Assessing current business trends is important to both business and professional growth. Business owners and entrepreneurs should keep up-to-date through a variety of means. Classes are offered at vocational/technical schools, two- and four-year colleges, and online. Joining a professional association or club is an excellent way to stay current with trends and knowledge relevant to an industry. Another way to stay up-to-date is by reading journals, professional trade publications, news sources, websites, and blogs. Attend professional conferences, meetings, seminars, and speakers. These activities also provide the opportunity for networking, wherein you can learn from colleagues by sharing insight and experience.

Exhibit a positive attitude (PQ)

Attitude is mental outlook, which shapes the way people view others and situations. People with a positive attitude welcome a difficult assignment as a challenge. They look for something positive even when they experience setbacks. They also accept constructive criticism as a way to improve. Their attitude is a model for other workers. It can inspire them to do the best work they can do.

Handle telephone calls in a businesslike manner (CS)

Because in a phone conversation your listener cannot see you, a pleasant voice is very important, whether answering or initiating a call. You should enunciate clearly and speak directly into the mouthpiece, speaking loudly enough to be heard but do not shout. It is important to make sure all of the necessary information is conveyed between you and the other party, so you may wish to write down key points before or during the call. Listen actively, and do not interrupt the speaker. When answering, be prepared to take a message. A proper message includes the date and time of the call, the caller's name and message, a return phone number. It is courteous to repeat the name and phone number of the caller to ensure it is correct.

Use conflict-resolution skills (CS)

Begin by allowing each party of a dispute to define the problem from his/her point of view. Then, allow each one to suggest a solution to the problem. Next, those options should be evaluated, so each party can explain what they can and cannot accept. To overcome the differences, parties to a problem may have to think creatively and compromise. Compromising means that each party will agree to give something up in order to settle a dispute. Conflict-resolution is done best when solutions are found that will allow each side of a dispute to save face and create the least amount of ill will. Sometimes, parties in a dispute may have to seek mediation or arbitration from an independent third party.

Describe the relationship between accounting and finance (SP)

Both accounting and finance are involved with helping organizations make effective financial decisions. Accounting is responsible for creating and maintaining a system of financial record keeping as well as preparing and analyzing financial statements. Finance refers to the business' practices of saving, investing, and using money. In essence, accounting is focused on the business' financial past while finance is focused on the future.

Identify company's brand promise (CS)

Brands are names, terms, designs, or symbols that identify and distinguish products from their competitors. They communicate features, benefits, qualities, and value. Effective use of branding will help build product recognition, build customer loyalty, and ensure consistent quality. Elements of branding include: brand name: a word or group of words that represent a product or service. trade name: the name that identifies a particular company or corporate division. brand mark: a company's or product's unique symbol, coloring, or design elements. trade character: a brand mark with human or animal forms and characteristics. trademark: a word, name, symbol, or device that is given legal protection to prevent others from using similar elements that might be confusing.

Discuss the nature of information management (CS)

Businesses must be able to create, store, access, analyze, update, and compare information in order to use it to make sound decisions. Information management in a financial services corporation requires a specialized information system. Such a system must support decision making regarding cash and securities management, operations management, capital budgeting, financial forecasting and planning, and risk management. These categories closely match the information included in a company's financial statements. Financial information is used to match company resources to its planned activities and to identify additional resources that may be needed or secured. Information that is needed includes cash flow, accounts receivable, accounts payable, capital assets, long-term liability, and stockholders' equity.

Explain the role of ethics in information management (SP)

Businesses that maintain databases of personal customer information have a responsibility to keep that information private. Many companies that collect information about their customers often sell that information to others. This exchange of customers' personal information among businesses has led to invasion of privacy complaints. Many businesses now also offer clients the choice of being added to mailing lists. Confidentiality must be maintained with regard to employees' and clients' personal information. Accountants must refrain from misrepresenting the facts to achieve short-term goals that are contrary to a business' long-term objectives.

Discuss the measure of consumer spending as an economic indicator (SP)

Consumer spending is also called consumption, and it includes all spending by households on durable goods, nondurable goods, and services. Consumer spending is one variable used to calculate Gross Domestic Product, along with investment, government spending, and net exports. The amount of money actually available for consumer spending is called disposable personal income. Consumer spending, then, is one measure of the overall health of an economy. Consumer spending is one of the most important economic indicators. Buying habits of consumers directly affect the profits of companies that sell products and services. Retail sales are measured monthly by the U.S. Department of Commerce. They are an indicator of the general spending patterns by consumers in the economy.

Explain forms of financial exchange (cash, credit, debit, electronic funds transfer, etc.) (PQ)

Credit enables a business or individual to purchase goods and services in exchange for a promise to pay later. It is most helpful when consumers want to make major purchases, though it is often used for more common, less expensive items. Customers are typically issued a credit card from a bank to make such purchases. Debit is a variation of credit. Consumers using a debit card authorize a seller to withdraw funds directly from the consumer's bank account at the time of sale. A cash sale is any transaction in which the customer pays for the item with cash or a check. Other forms of retail sales transactions include layaway, on-approval, and cash-on-delivery (COD). Layaway means removing merchandise from stock and keeping it in a separate storage area until the customer pays. In an on-approval sale, an agreement is made permitting a customer to take merchandise home for further consideration before paying. A COD sale is a transaction that occurs when a customer pays for goods at the time they are delivered.

Demonstrate the wise use of credit (CS)

Credit is a way to receive cash or goods now and pay for them later, most commonly through the use of a credit card or a loan. Before deciding to use credit, ask yourself if you can afford the item in the first place. Also, would it be better to use your savings instead of credit? Could your credit be put to better use in some other way? Or, should you put off the purchase for a later date? You must be certain that the benefits of making the purchase now on credit outweigh its costs, including fees and interest charges. There are many ways to use credit wisely. For instance, you may be able to combine several purchases into one, thus making only one monthly payment. You will likely need a credit card for major and expensive purchases. It is often safer, and more convenient, to use a credit card when shopping or travelling. The wise use of credit will allow you the opportunity to build a better credit history, which means you are seen as a reliable person to other lenders. When using credit, avoid the temptation to buy more than you can afford. Failing to repay a loan or credit card balance will damage your credit history, and could lead to you losing your property or source of income.

Describe the use of technology in customer relationship management (SP)

Customer relationship management (CRM) involves finding customers and keeping them satisfied through a variety of means, and is useful for developing and maintaining customer relationships. Database marketing is the element of CRM that is the process of creating and maintaining customer lists. These lists can be developed from face-to-face sales, direct mail responses, phone or e-mail purchases, service requests, Web site visits, or they can be purchased from a third party. CRM data is also obtained through customer satisfaction surveys, often giving a customer a reward while sharing demographic and purchase information with the company. Modern CRM software applications are Internet-enabled web applications. They allow a customer to create and check accounts and orders online while the company collects valuable data. Touch-screen computers are becoming popular in retail marketing. Customers like them and the costs to operate them are low. Interactive TV is a modern method of allowing viewers to interact with the programming. This method gives customers instant access to product information, links to online stores, and downloads for additional content, among other benefits.

Use Customer Relationship Management (CRM) technology (SP)

Customer relationship management involves finding customers and keeping them satisfied through a variety of means. Database marketing is the element of CRM that is the process of creating and maintaining customer lists. These lists can be developed from face-to-face sales, direct mail responses, phone or e-mail purchases, service requests, website visits, or they can be purchased from a third party. CRM data is also obtained through customer satisfaction surveys, often giving a customer a reward while sharing demographic and purchase information with the company. Modern CRM software applications are Internet-enabled web applications. They allow a customer to create and check accounts and orders online while the company collects valuable data. Touch-screen computers are becoming popular in retail marketing. Customers like them and the costs to operate them are low. Interactive TV is a modern method of allowing viewers to interact with the programming. This method gives customers instant access to product information, links to online stores, and downloads for additional content, among other benefits.

Discuss the nature of data mining (CS)

Data-mining software can be purchased from specialized companies to analyze existing and external business databases. For example, sales of a product during a particular period can be compared with sales when the product is moved or displayed in a different store location. Data-mining software also collects information from other customer databases to match and identify patterns that help businesses promote their products or advertise them in more timely or effective ways.

Analyze employer expectations in the business environment (PQ)

Employers expect a lot of things from their employees, including cooperation, initiative, and a strong work ethic. Employees need to display a willingness to follow directions, to learn job tasks and skills, and to take on responsibility on the job. Employers expect you to manage yourself, your time, and your emotions in the workplace. Your employer will expect you to behave ethically and follow all company procedures and laws. Be honest, fair, and open on the job, and avoid prejudice and judgment of others.

Describe the nature of entrepreneurship (SP)

Entrepreneurship is the process of starting and operating your own business. The advantages of entrepreneurship can include personal freedom, personal satisfaction, increased self-esteem, and increased income. Entrepreneurs set their own work schedules and make their own decisions. They are able to try out their own new ideas, direct their energies into business activities, and take control of their businesses and their work settings. Many business owners are willing to put in the extra effort to make their businesses succeed because of financial rewards. With success often comes money, and this potential motivates many entrepreneurs. Being an entrepreneur has disadvantages, too. These include a high level of stress, possible setbacks, the risk of failure, potential loss of income, long and irregular hours, and the need to handle multiple tasks. Most new businesses have a restricted cash flow because of startup costs. As a result, an entrepreneur may not meet his or her personal financial needs during the first year of operation, or even longer. In addition, entrepreneurs often work long and irregular hours doing many tedious, time-consuming tasks to save money.

Explain ethical considerations in providing information (SP)

Ethical business practices ensure that the highest standards of conduct are observed in a company's relationships with everyone in the company or who is affected by its activities. Ethical behavior is lawful and does not harm some while benefiting others. Business practices are ethical if its actions are not embarrassing if they become public. Many businesses develop a statement of core values that guide the ethical decisions and actions of the company. A company's commitment to ethics should be clear during the hiring process as well as in day-to-day operations. Interviewees may be questioned about ethics, and new hires should be provided information about the company's commitment to ethics and values. Ethical behavior should be a part of employee evaluations and promotions, and managers should model ethical behavior when dealing with customers.

Discuss the role of ethics in finance (SP)

Ethics are guidelines for good behavior, based on knowing the difference between right and wrong. Behaving ethically means being truthful, fair, open, and mindful of the law. Companies and their executives can now be held accountable for misinformation or improper recording of a company's financial situation. A company must keep an accurate, honest, and complete record of its accounting transactions. Finance professionals should be educated about insider trading and other unethical practices. They must refrain from misrepresenting the facts to achieve short-term goals. Confidentiality must be maintained with regard to clients' personal information as well as company information. Efforts must also be made to avoid conflicts of interest between employees and customers.

Explain the nature of business ethics (SP)

Ethics are guidelines for good behavior, based on knowing the difference between right and wrong. Behaving ethically means being truthful, fair, open, and mindful of the law. In marketing, business ethics involves a company's efforts to protect individual consumers and society as a whole. Businesses must keep consumers informed and protected against fraud and deceit, and they must not produce unsafe goods. Another ethical consideration for marketers is price gouging, or pricing products unreasonably high. In sales, ethical issues to be aware of concern bribes, kickbacks, and high pressure tactics. Businesses must behave ethically in management, as well, including personnel and accounting issues. The standards of ethics within a business are in large part determined by the owner's principles and values. Remember, people do not all share the same ethical values. As a result, businesses should create a clear policy on ethics standards.

Explain the responsibilities of finance professionals in providing client services (CS)

Finance professionals such as financial planners help clients create personal budgets, control expenditures, set savings and investment goals, and implement strategies for accumulating wealth. A planner will have access to financial advisors, investment managers, securities brokers, and mutual fund companies, using these specialists to invest funds for their clients. Financial planners should stay current with developments in the finance industry, including financial products, tax laws, and investment strategies.

Identify reasons to analyze financial data (SP)

Financial data is analyzed to evaluate the financial position and progress of a business. Management uses this data to plan for the future, identify areas for improving profitability, and prepare tax reports. In a corporation, a board of directors will use financial data to make decisions regarding management and distribution of earnings. Shareholders and potential investors use the information to decide about investing in the company. Finally, creditors (or potential creditors) use financial data to determine if the company can meet its credit obligations.

Set financial goals (CS)

Financial goals are influenced by two main factors: the time frame in which you want to achieve your goals, and the type of need that inspires your goals. Goals can be short-term (usually one year or less to achieve), intermediate (two to five years), or long-term (more than five years). Also, some goals may happen every year, while others occur only occasionally. How you establish your financial goals may also depend on whether a goal you have set involves a consumable good that you would use up quickly, a durable good that lasts longer and usually costs more, or something intangible, such as your health or an education. Keep in mind that while setting financial goals, they should be realistic, specific, have a clear time frame, and should help you decide on what action to take.

Describe the need for financial information (CS)

Financial information includes raw data, records, and reports. Consumers are essentially buying information when dealing with financial services providers; businesses rely on accurate financial information to make sound decisions. Financial services products are bought and sold based on information about costs, returns, and risks. Financial information is used to match company resources to its planned activities and to identify additional resources that may be needed or secured. Businesses use information to identify ways to reduce expenses and invest company assets. Also, information is used to forecast for future budgeting and growth, as well as to control and manage risk. Other pieces of information that are required include sales, inventory, operating systems, personnel costs, insurance expenses, tax liability, and profitability. In addition, information must be collected regarding external factors such as economic conditions, investment alternatives, and competition.

Explain the role of ethics in financiaI—information management (SP)

Financial-information managers must provide appropriate and accurate information to shareholders, manager, employees, business partners, and customers. They must make the information they control accessible as well as secure, keeping in mind confidentiality and privacy. Managers need to allow access to information in a timely manner and in a form appropriate to the user.

Organize information (CS)

First of all, you must decide if a piece of information is important. Information you do not need becomes clutter. Try to do something with important information the first time you look at it. Put information you will look at later in a file or folder. Categorize information by type and label each file or folder. Avoid putting each document in a separate file and do not let files get too large—divide them by subtopics. Color-code files, folders, or labels. Maintain your files on a regular basis. Organize your writing by using a logical order, such as chronological order or order of importance. Use heading and subheadings when writing longer documents.

Explain the concept of private enterprise (CS)

In a private enterprise system, the three basic economic questions—what goods/services will be provided, how, and by whom—are answered by individuals and businesses, not by government. Individuals and organizations own and control the economic resources, including natural, human, and capital goods used to produce goods and services. Private enterprise is characterized by a number of qualities, including the following: x Businesses are free to choose what they wish to produce, how to produce them, and what price they will charge. x Individuals and businesses are free to own, use, buy, and sell private property. x Government control in private enterprise is limited. x Competition exists and is encouraged by government. x Businesses are motivated by the ability to make and maintain a profit. x Prices are important in making the supply and demand system work correctly. x Individuals and enterprises are free to set their own financial goals, including the ability to choose what kind of work they would like to do.

Distinguish between economic goods and services (CS)

In economic terms, goods are tangible items that have monetary value and satisfy your needs and wants (such as cars and clothing). Services are intangible items (meaning you cannot physically touch them) that have monetary value and satisfy your needs and wants. Services involve a task, such as cooking food or repairing a computer.

Explain possible advancement patterns for jobs (PQ)

In many industries, jobs can be categorized based on skill level. One can advance from one level to the next through experience, education, attrition, and promotion. Entry level jobs usually require no prior experience and involve only limited decision making. Careersustaining jobs are the next level, requiring more skill and experience. Specialist positions often involve a demonstration of leadership and decision making ability, and are often longterm positions. Supervisory positions require good management skills and hold much responsibility. Top management is usually the highest level. People at this level are capable of running entire companies or divisions. They are skilled in a large number of areas and are responsible for the final success of the business or division.

Exhibit cultural sensitivity (CS)

In order to exhibit sensitivity to other cultures, begin by respecting differences among people. Another key is to avoid and overcome stereotypes. A stereotype is an oversimplified, distorted belief about a person or group. In business, you must maintain an awareness of the language and cultural differences that will affect company employees as well as customers.

Participate as a team member (CS)

In order to participate as a team member, one should: x Make the team's goals his/her priority. x Listen actively and offer suggestions. x Build positive group dynamics with team members. x Communicate with team members. x Follow up on assignments. x Work to resolve conflicts among team members. x Respect the members of the team. x Try to inspire others to get involved. x Think creatively and present ideas with enthusiasm.

Describe the economic impact of inflation on business (SP)

Inflation refers to rising prices; it is an indicator of the stability of an economy. A low level of inflation (between 1 and 5 percent per year) is considered good because it indicates a stable economy. Higher levels of inflation are harmful to businesses. Rising prices cause consumers to spend less, slowing the overall economy. Inflation also leads to higher wages. A high level of inflation may cause wages to increase beyond what businesses can afford to pay, which can lead to layoffs and downsizing. Interest rates rise in periods of inflation. Rising interest rates mean that borrowing money becomes more expensive. Businesses are, thus, less likely to borrow money to expand their operations. With inflation, the value of a dollar decreases so businesses and individuals cannot buy as much with the same dollar as they could before. Inflation can be helpful to individuals and businesses who are borrowers. Those who borrow at a fixed rate of interest can repay the debt with dollars that are worth less, which makes their repayments smaller than they would have been without inflation.

Protect company information and intangibles (CS)

Intellectual property can be protected through patents, trademarks, and copyrights. A patent is the legal ownership of an item or idea. A word, name, symbol, sound, or color that identifies a good or a service is a trademark. Copyrights are legal protection for anything that is authored by an individual or company, such as writings, music, and artwork. Trade secrets are also protected by law and specific company policy, often by contractual agreement with employees.

Explain the economic impact of interest—rate fluctuations (SP)

Interest rates are determined by supply and demand. As saving and investing increase the money supply, interest rates tend to decrease. Likewise, more borrowing is likely to raise interest rates. Interest rate fluctuations can have an impact on stock purchases because as the cost of money changes, company profits can increase or decrease.

Explain the nature and scope of financial globalization (SP)

International finance incorporates many areas. Currency exchange rates change daily, affected by a country's balance of payments, economic conditions, exchange controls, and political stability. The international securities market is active twenty-four hours a day in exchanges in major cities throughout the world. Computerized securities exchanges are becoming commonplace for trading both stocks and bonds. Investors can refer to a global stock index to find out the overall progress of a large number of company stocks. International mutual funds exist for those who wish to invest in hundreds of companies around the globe.

Discuss the nature of law and sources of law in the United States (SP)

Laws are enforceable rules of society that reflect the culture and circumstances that create them. Laws may be grouped into an organized form called a code. A number of forms of law exist, including common law, positive law, English common law, and equity. In the U.S., sources of law include the Constitution, state constitutions, statutes, ordinances, administrative regulations, and criminal or civil cases.

Explain the concept of leadership (CS)

Leadership is helping members of an organization achieve their goals. Leadership requires a wide range of skills and personal traits, including self-confidence, creativity, problemsolving, and effective communication. Good leaders understand people, show social judgment, and can motivate others. Leaders have a vision, and can communicate that vision with those around them while minimizing conflicts that may arise.

Explain legal responsibilities associated with financial exchanges (CS)

Legally speaking, a sale is a contract in which ownership of goods transfers immediately from the seller to the buyer for a price. If the transfer of ownership will take place at a future date, it is called a contract to sell, rather than a sale. According to the Uniform Commercial Code (UCC), goods are tangible, movable personal property. Payment occurs when the buyer delivers the agreed price and the seller accepts it. The receipt of goods is when the buyer takes physical possession of the goods. A court may find that a contract is unconscionable, or grossly unfair to one party or another. In such a case, the contract may be voided or limited.

Demonstrate negotiation skills (SP)

Negotiation is the process of working with or among the parties in a conflict to find a resolution, and requires a willingness to work together to achieve a mutually-agreeable solution. No company will completely avoid conflict in the workplace, so learning and practicing negotiation skills is important. Six effective techniques for negotiating conflict are: 1) show respect 2) recognize and define the problem 3) seek a variety of possible solutions 4) collaborate, or work together 5) be reliable 6) preserve your relationship The two most important negotiation skills are speaking and listening. Each party must first present the problem from their point of view. Use a non-aggressive tone and "I statements" to make your point, trying not to cast blame. Active listening on your part shows you are interested in the other person's ideas and feelings. Try to empathize with the person who is speaking. The problem is solved only when both/all parties reach a common agreement.

Write persuasive messages (SP)

People act in order to have their own needs met. Thus, it is important to show your reader why he/she has a need to do what you want. To plan a persuasive document, first identify your objective. Then identify the main idea to show that the requested action will meet the reader's needs. Determine the supporting information that will convince the reader to do what you wish. Finally, adjust the content to the reader, considering his/her values and concerns. Organize a persuasive document by 1) gaining the reader's attention, 2) showing the reader that he/she has a need, 3) explaining your solution to that need, 4) present the supporting information, and 5) end by asking for a specific action. Persuasive documents might include sales letters, collection letters, proposals, and newsletters. To be effective in drafting persuasive documents, you should also present a solution that is clear, logical, and practical.

Treat others fairly at work (PQ)

People expect to be treated the way others are treated. Equity means that everyone has equal rights and opportunities. Never give priviledges to an employee for reasons that are unrelated to his or her work performance. Sometimes a business establishes standards to maintain fairness. Equality is also protected through both federal and state laws. Such standards and laws can prevent discrimination in procedures such as hiring and firing. For example, employment laws forbid discrimination due to gender, age, religion, or national origin. Federal laws include the Americans with Disabilities Act of 1990, which protects qualified individuals with disabilities from discrimination. If an employee believes that he or she has been the victim of discrimination, the employee can file a complaint with the United States Equal Employment Opportunity Commission.

Describe the concept of price stability as an economic measure.

Price stability is a factor that can enable economic growth. When prices are stable, investors and businesses know what to expect in the marketplace and in government. Businesses can make long-term plans knowing that market conditions will not change drastically and that the government will not run out of money. Globally, investors are more likely to put their money into countries with price stability, leaving behind nations that could use those investments for economic expansion.

Explain the nature of risk management (SP)

Risk management is the systematic process of managing an organization''s risks to achieve objectives in a manner consistent with public interest, human safety, environmental needs, and the law. Risks are managed by using the best available marketing information, analyzing opportunities, and making wise decisions.

Discuss the effect of tax laws and regulations on financial transactions (SP)

Sales tax is a percentage of the purchase price of an item that is collected by local and/or state governments. A specific type of sales tax collected by state and federal government is called an excise tax, which is collected for regulated goods and services such as gasoline and air travel. Income tax, collected on wages, is deducted directly from the gross income you receive. Real estate property tax is collected from individuals and businesses based on the value of land and buildings. Estate and inheritance taxes are collected on the value of property at the time of a person's death. Gift tax is one that is collected on money or property valued at more than $11,000, given by one person to another in one year. Investment income and dividends is also subject to a tax called capital gains.

Interpret securities table (SP)

Securities tables utilize abbreviations in order to save space. Company names are shortened to one-to-four ticker symbols. Other abbreviations include: x Div (current dollar amount of the annual dividend per share) x Yld% (dividend of the stock as a percentage of stock price) x PE (price-earnings ratio), Vol 100s (trading volume in hundreds of shares) x Hi (highest price sold for that day) x Lo (lowest price sold for that day) x Close or Last (price per share at end of the trading day) x Net Chg (among the closing price moved up or down from the previous day) Securities are listed alphabetically. The high and low price for stocks during the past 52 weeks may also be listed. Overall market performance is listed with the Dow Jones Industrial Average, Standard & Poor's 500, the NYSE Index, the NASDAQ Performance Index, and the AMEX Index.

Identify sources that provide relevant, valid written material (PQ)

Sources for written material may be obtained internally or externally. Internal sources include such data as a company's monthly sales records or previously collected market research. External sources include the Internet, government, specialized research companies, and business/trade publications and associations. The Internet provides a nearly limitless source of free or fee-based information from companies' own websites or business clearinghouses. Data collected by government agencies is available online regarding topics such as demographics, product and economic news, and legislative trends. Government agencies also serve as good sources for written material, such as the Small Business Administration, U.S. Census Bureau, Securities and Exchange Commission, etc. Specialized research companies sell demographic data, sales forecasts, and other business data they have collected.

Make oral presentations (SP)

Start off by knowing your purpose for speaking. It may be to greet, to inform, to request to persuade, or to propose. Sometimes you may have overlapping purposes. Next you need to know your audience. Who are your listeners? What are their beliefs, values, and interests? What do they already know about the subject and what do they need to know? What does the audience expect to learn? Next you must know your subject and organize your thoughts. Relate your subject to the audience and decide how to clearly make your point(s). The best approach is to be clear, brief, and direct. Good speaking skills are important, and your delivery, style, and attitude are as important as your message. Speak at an appropriate volume and speed. Use inflection and tone of your voice to stress key ideas. Try to make emotional contact with your audience, and make eye contact. Use posture and body language that match your message. Avoid nonwords, such as uh and um. Pronounce words correctly and enunciate clearly. Project enthusiasm and a positive attitude.

Describe how to interpret statistical findings (SP)

Statistics are used to describe and summarize data in order to make the date more meaningful and easier to understand. Commonly used statistics in business include distribution, central tendency, and dispersion. Distribution is a summary of the frequency of values for a variable. The central tendency is an estimate of the center of a distribution of values, including mean, median, and mode. Dispersion is the spread of values around the central tendency, measured with the range.

Explain the nature of tax liabilities (PQ)

Taxes are payments you make to the government for services they provide. Tax liability is the total amount of taxes owed. Effective planning can reduce your tax liability, thus paying your fair share while taking advantage of tax benefits. The types of taxes include income, Social Security, sales, wealth and property taxes, as well as user fees. One can use several strategies to reduce tax liability. First, it is important to understand the current tax laws and how they affect you and your financial goals. Second, maintain complete and accurate tax records. Finally, learn and understand the types of taxes and how to make sound financial decisions, keeping taxes in mind.

Describe the nature of business records (SP)

Technology has made it easier and more efficient to maintain business records through management information systems (MIS). The functions of an MIS are to gather, analyze, store, and report on data. Records are kept regarding financial information, production and inventory, marketing and sales, and human resources. Data sources may be external, such as from financial institutions or government agencies; or they may be internal, including data from accounting, inventory, and sales figures. Business record keeping requires one to: identify the information needs of the organization, obtain the data, process and analyze the data, organize the data in a useful manner, distribute information to those who need it to make decisions, and update the data and records as needed.

Describe the use of technology in human resources management (SP)

Technology is used more and more in the area of recruiting and hiring employees. Effective sources for locating prospective employees now include Internet career services and company websites. Many companies ask applicants to fill out an application online or at a computer terminal at the company's location. New employee orientation also makes use of technology for job training and disseminating company policies. Payroll functions are automated in many companies.

Describe the United States' judicial system (SP)

The U.S. government has three branches. They are the executive, legislative, and judicial branches. The legislative branch writes and determines laws; the executive branch executes and enforces the laws, and the judicial branch interprets the laws. The power to make changes that affect the country is split between the branches. This system of checks and balances prevents any one branch of the government from becoming too powerful. Similar branches of government exist at the state and local levels.

Determine the relationship between government and business (CS)

The government serves as both a protector and a regulator of business in a free market economy. It serves to protect business property, enforce contracts and settle disagreements through the courts, and collect taxes on the products business sell. As a regulator, government enacts and enforces laws to prohibit certain behaviors, control business activities, and require certain standards. Examples of such laws include laws to control monopolies, set product safety standards, and regulate prices. The government also serves the following purposes to society through intervention in business: Provide public goods, Improve public welfare, Protect public health, Stabilize the economy, Protect specific businesses or industries, Conserve the environment, Protect consumers, Preserve competition, and Regulate workplace conditions. Government agencies have been set up to monitor such business activities, including the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC).

Explain types of business ownership (CS)

There are four possible forms of business organization: sole proprietorship, partnership, corporation, and limited liability company (LLC). The choice depends on the financial and tax situation of the owner, the type of business, the number of employees, and the level of risk involved. Each has advantages and disadvantages to be explored. A sole proprietorship is a business owned and operated by one person. A partnership is a legal agreement between two or more people. The two types of partnerships are general and limited. A corporation is a legal entity created by a government statute authorizing individuals to operate an enterprise. A limited liability company is a hybrid of a partnership and a corporation. In an LLC the owners are shielded from personal liability while all profits/losses pass directly to the owners without taxation of the business itself.

Describe methods used to protect intellectual property (SP)

There are only three ways to protect intellectual property in the United States: through the use patents, trademarks or copyrights. A patent applies to a specific product design; a trademark to a name, phrase or symbol; and a copyright to a written document. A copyright will protect categories of works such as: literary works, musical works, dramatic works, pictorial, graphic and sculptural works, motion pictures, etc. Copyright protection gives the copyright holder the exclusive right to copy the work, modify it (that is, create "derivative works"), and distribute, perform and display the work publicly. Ideas or concepts do not have copyright protection. Copyright protects the expression of the idea, but not the ideas themselves. Patents protect processes, methods and inventions that are "novel," "non-obvious" and "useful." Patented works must be novel, non-obvious, and useful. A trademark is any word(s) or symbol(s) that represent a product to identify and distinguish it from other products in the marketplace. A trademark word example would be "Rollerblades." A trademark symbol would be the peacock used by NBC.

Explain types of investments (CS)

There are several main types of investment vehicles. Common stock is a unit of ownership of a company that entities the owner to voting privileges. Preferred stock is a type of stock that gives the owner the advantage of receiving cash dividends before common stockholders receive them. Stocks are attractive as an investment because owners share in the success of the company. A corporate bond is a corporation's written pledge to repay a specific amount of money, plus interest. Similarly, a government bond is the written pledge of a government or municipality to repay a specific amount of money, plus interest. When you buy a bond, you are lending money to a corporation or government entity for a period of time. Mutual funds are investments in which investors pool their money to buy stock, bonds, and/or other securities. The investments are selected by professional managers who work for an investment company. Their expertise can be beneficial to inexperienced investors. A final form of investment is to own real estate. The goal of this is to own property that increases in value so you can sell it at a profit or receive rental income.

Prepare personal income tax forms (Le, 1040 E2 form) (CS)

There are three basic income tax return forms, although hundreds of forms exist. Choose Form 1040EZ if your taxable income is less than $100,000, you have no dependents, and your income consists only of wages, salaries, and tips (among other factors). Choose Form 1040A if you have less than $100,000 in taxable income and you claim deductions, have dependents, and have capital gains distributions (among other factors). Form 1040 is an expanded version of Form 1040A, useful if you have taxable income greater than $100,000 and plan to itemize deductions, or have more complicated financial situations. To complete a tax return form, have your W-2 Form from your employer(s) on hand along with any interest and/or dividend forms. You can choose to file your tax return by using traditional paper forms and mailing them in, or you can file electronically over the Internet. In addition, you may choose to use tax preparation software to guide you through the process on your own with a computer. You may also choose to hire a tax professional to complete your return. Be sure to keep a copy of your completed form and your supporting documents in a safe place for at least six years.