Chapter 9 Plan and Track your Finances
An accounting record that provides financial detail for a particular business item is a(n) __________.
Account
Payments due for products or services purchased on credit by customers are _____________.
Accounts receivable
A(n)__________ is a record keeping tool for tracking accounts receivable.
Aging table
Banks often reject applicants who do not have a solid ________________.
Business plan
Inventory is a kind of asset that can be converted into _______________.
Cash
A booklet in which you record the dates and amounts of the checks you have written is called a(n) _______.
Check Register
A(n) ____________ is a booklet where you record information for each check written.
Check register
To produce an accurate statement of the value of assets on a balance sheet, a company should include _____________.
Depreciation
True or False: A business that collects sales tax must pay the tax quarterly.
False
True or False: A cash flow statement describes a business's revenue and expanses over a period of time.
False
True or False: A solid business plan is needed for a bank loan but not for SBA loan assistance.
False
True or False: A utility bill is a type of current liability known as an account payable.
False
True or False: An income statement shows revenues you have received and expenses you have paid.
False
True or False: Any checks or deposits that are not listed on your bank statement are classified as reconciled.
False
True or False: Banks require collateral for most unsecured loans.
False
True or False: Debt capital is the money invested in a business in return for a share of the business's profits.
False
The journal used to record any type of transaction is the ____________.
General Journal
Businesses that earn a profit must pay __________.
Income taxes
__________ are accounting records of the transactions you make.
Journals
A general _________ is made up of accounts.
Ledger
____________ are items that a business owes to others, such as loans and outstanding invoices.
Liabilities
___________ expenses are incurred by a business every month, such as salaries and rent.
Operating
A list of people who receive salary wage payments from a business is a(n) ________.
Payroll
A(n) _____________ is a list of people who receive salary or wage payments from a business.
Payroll
True or False: Copying information from a journal entry to a ledger account is _________.
Posting
A business must pay income taxes _________.
Quarterly
The dollar value of goods or services a business sells to customers is called ______________.
Revenue
A sales journal is used to record only _________.
Sales of merchandise on account
A(n) ___________ loan is made for a very specific purpose and it repaid within a year
Short-term
A(n) ______________ is any business activity that changes assets, liabilities, or net worth.
Transaction
Any business activities that changes assets, liabilities or net worth is a(n) __________.
Transaction
True or False: Entrepreneurs may be able to get financial assistance form the their state or local governments.
True
True or False: Journals are accounting records of the transactions that you make.
True
True or False: Loans and accounts payable are examples of liabilities.
True
True or False: Most SBA loan assistance is made by guaranteeing loans made by commercial banks.
True
True or False: Net worth is the difference between what you owe and what you own.
True
True or False: Your companies debt-to-equity ratio measures how much money you can safely borrow.
True
Individuals and companies that make a living investing in start up companies are_____.
Venture Capitalist
The amounts owed to vendors for merchandise purchased on credit is known as_____.
accounts payable
The accounts owed to a business by its credit customers is called____.
accounts recievable
The assets, liabilities, and capital of a business are shown on a(n)____.
balance sheet
The assets, liabilities, and capital of a business at a particular point in time are shown on a(n) ____________.
balance sheet
For a secured loan, a bank requires _____________, such as real estate or a life insurance policy.
collateral
Unsecured loans are not guaranteed with_____.
collateral
_______ is property that the borrower forfeits if he defaults on the loan
collateral
Assets that can be converted to cash easily are____ assets.
current
Debts that must be paid in full in less than a year are______.
current liabilities
______ capital is money loaned to a business with understanding that the money will be repaid.
debt
Money invested in a business in return for a share of the business's profits is____.
equity capital
Assets that cannot be converted into cash easily are_____.
fixed assets
On a balance sheet, buildings and furniture would be included as_____.
fixed assets
To figure ones assets, one must add owner's equity to____.
liabilities
If a business wants to make improvements to increase profits it will usually get a(n)_____.
long term goal
A type of secured loan is_____.
long term loan
A mortgage is a type of____.
long-term liability
During the first few months of operating a new business, the cash flow is usually____.
negative
Pro Forma statements help you anticipate when____ cash flow will occur.
negative
To calculate net worth you should_____.
prepare a personal financial statement
Financial statements based on projections are known as __________ financial statements
pro forma
A bank may turn down a loan application for a new business because the entrepreneur is investing_____.
too little personal money in the business.
Long term liabilities are paid over a____ or longer.
year