Business Basics (Plug-In B1)

partnership agreement

A legal agreement between two or more business partners that outlines core business issues.

revenue

amount earned resulting from the delivery or manufacture of a product or from the rendering of a service.

Net income

amount of money remaining after paying taxes

Corporation

an artificially created legal entity that exists separate and apart from those individuals who created it and carry on it's operations.

Transaction

an exchange or transfer of goods, services, or funds

Financial Statements

A written report which describes the financial health of a company; prepared on a quarterly and annual basis

Liability

An obligation to make financial payments

Asset

Anything owned that has value or earning power.

Partnerships

Business organizations in which two or more persons share responsibilities, costs, profits, and losses.

resources

Human _____________ includes the policies, plans, and procedures for the effective management of employees.

Managerial accounting

Involves analyzing business operations for internal decision making and does not have to follow any rules issued by standard-setting bodies such as GAAP.

Limited Liability

Means that the shareholders in a company cannot be held personally responsible for the debts of that business.

Loss

Occurs when businesses sell products or services for less then they cost to produce.

Profit

Occurs when businesses sell products or services for more than they cost to produce.

For profit corporations

Primarily focus on making money and all profits and losses are shared by the business owners.

accounting department

Provides quantitative information about the finances of the business including recording, measuring, and describing financial information.

Marketing communications

Seek to build product or service awareness and to educate potential consumers on the product or service.

b. Corporation c. Sole proprietorship e. Partnership

Select the three typical business types. a. Profit center b. Corporation c. Sole proprietorship d. Capital e. Partnership

Bookkeeping

The actual recording of the business's transactions, without any analysis of the information.

cycle

The product life _____________ includes the four phases a product progresses through during its life cycle including introduction, growth, maturity, and decline.

equity

The statement of owner's _______________ tracks and communicates changes in the shareholder's earnings

a. balance sheet b. statement of cash flows c. Income statement d. statement of owners equity

What are four primary financial statements? a. balance sheet b. statement of cash flows c. Income statement d. statement of owners equity e. statement of financial quarters f. Capital statement

b. Financial statements

What are the written records of the financial status of the business that allow interested parties to evaluate the profitability and solvency of the business? a. Solvency b. Financial statements c. Income statement d. Statement of owner's equity

a. Finance

What deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities? a. Finance b. Human resources c. Management information systems d. Accounting

a. Balance Sheet

What gives an accounting picture of property owned by a company and of claims against the property on a specific date? a. Balance Sheet b. Statement of cash flows c. Statement of owner's equity d. Income statement

b. The product life cycle

What includes the four phases a product progresses through during its life cycle including introduction, growth, maturity, and decline? a. Maturity stages b. The product life cycle c. Market segmentation d. decline stage

c. Marketing mix

What includes the variables that marketing managers can control in order to best satisfy customers in the target market? a. Advertising communication b. Financial statements c. Marketing mix

c. Sole proprietorship

What is a business form in which a single person is the sole owner and is personally responsible for all the profits and losses of the business? a. Corporation b. Partnership c. Sole proprietorship d. Sole partnership

c. Sales

What is the function of selling a good or service and focuses on increasing customer sales, which increases company revenues? a. Operations management b. Marketing c. Sales d. Management information systems

a. marketing

What is the process associated with promoting the sale of goods or services? a. marketing b. accounting c. sales d. finance

a. Profit

What occurs when businesses sell products or services for more than they cost to produce? a. Profit b. Loss

b. Income statement

What reports operating results (revenues minus expenses) for a given time period ending at a specified date? a. Balance sheet b. Income statement c. Statement of owner's equity d. Statement of cash flows

d. Statement of cash flows

What summarizes sources and uses of cash, indicates whether enough cash is available to carry on routine operations, and offers an analysis of all business transactions, reporting where the firm obtained its cash and how it chose to allocate the cash? a. Statement of owner's equity b. Income statement c. Balance sheet d. Statement of cash flows

c. Statement of owner's equity

What tracks and communicates changes in the shareholder's earnings? a. Statement of cash flows b. Balance sheet c. Statement of owner's equity d. Income statement

Market

___________ segmentation is the division of a market into similar groups of customers.

transaction

a ________________ is an exchange or transfer of goods, services, or funds involving two or more people.

cash flow analysis

a means to conduct a periodic check on the company's financial health.

break-even analysis

a way to determine the volume of business required to begin to make a profit at the current prices charged for the products or services.

Accounting

analyzes the transnational information of the business so the owners and investors can make sound economic decisions.

Shareholder

another term for business owners

finance

deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities.

balance sheet

gives an accounting picture of property owned by a company and of claims against the property on a specific date.

Marketing Mix

includes the variables that marketing managers can control in order to best satisfy customers in the target market.

Financial quarter

indicates a three-month period (four quarters per year)

Return on investment

indicates the earning power of a project and is measured by dividing the benefits of a project by the investment.

Financial accounting

involves preparing financial reports that provide information about the business's performance to external parties such as investors, creditors, and tax authorities.

Limited Liability Corporation

is a hybrid entity that has the legal protections of a corporation and the ability to be taxed (one time) as a partnership.

Marketing

process associated with promoting the sale of goods or services.

Income Statement

reports operating results (revenues minus expenses) for a given time period ending at a specified date.

Captial

represents money whose purpose is to make more money, for example, the money used to buy a rental property or a business.

statement of cash flows

summarizes sources and uses of cash, indicates whether enough cash is available to carry on routine operations, and offer an analysis of all business transactions, reporting where the firm obtained its cash and how it chose to allocate the cash.

Solvency

the ability of the business to pay it's bills and service its debt.

expenses

the cost incurred in operating and maintaining a business.

Owner's equity

the portion of a company belonging to the owners.

Marketing

the process associated with promoting the sale of goods or services.

Internal rate of return

the rate at which the net present value of an investment equals zero.

not-for-profit corporation

usually exist to accomplish some charitable, humanitarian, or educational purposes, and the profits and losses are not shared by the business owners.