ENT ch 7
what is true with regard to managing the flow of date?
- data are obtained in a timely manner - data are tied to the strategic needs of the business
what is true regarding managing the flow of data?
- data are tied to the strategic needs of the business - the data management philosophy is the same for the new business and large, established firms - data are obtained in a timely manner
what are the characteristics of loans as a source of funding for new businesses?
- most often repaid monthly from cash flow - are secured assets - or a personal guarantee
identify the issues a new business used to determine the quality of accounts receivable
1. who owes the new business money 2. the debt age 3. the size of the transaction 4. the debtor's credit rating
T/F: data measurement methods must be complex
FALSE, they don't have to be
what kind of businesses use a accrual-based accounting system?
Subchapter C corps, partnerships, or trusts
venture capital fund
a fund that is organized to make significant equity investments in high-growth new ventures
asset based lending
a loan provided for the purchase of a necessary asset for the business
credit card
card entitling one to revolving credit that isn't ties to any particular asset, doesn't have a set repayment schedule, has a set upper limit, and is usually tied to a much higher interest rate than that of a bank loan
a _______ is a master system for tracking the activity of the business
chart of accounts
some key reports that businesses should be prepared to generate are:
chart of accounts, petty cash register, check register, expense accounts, inventory accounts, accounts payable, and payroll
loan
contractual agreement where the firm receives money that must be repaid over a specific period of time at a specified interest rate
suppliers will generally provide ______ on both physical assets and the actual supplies purchased
credit
suppliers will generally provide _______ on both physical assets and the actual supplies purchased
credit
T/F: credit cards are a form of equity investment
false; NONequity
Profit and Loss Statement (P&L)
financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time
asset lease
form of lease tied to a particular asset used by a business to conserve cash and maintain the latest version of equipment available
supplier credit
form of non equity funding that is available. suppliers often provide credit on both physical assets (equipment) and the actual supplies provided
a __________ involves a contractual agreement whereby the business receives some amount of money that must be repaid over a specifies period of time at a specified interest rate
loan
what kind of businesses use cash-based accounting system?
only the smallest will use this type
typical advantages of having suppliers invest in a new business:
supplier is generally not trying to run your business, nor looking to take over if it does well
shrinkage
the difference between what is sold and what was brought into the business
three issues involved with starting a business include the funding of the firm, the creation of an accounting system, and ______________
the flow of info in the new business
what should be included on a payroll record?
date, check number, numbers of hours worked, base pay, overtime hours worked, overtime pay rate, gross pay, taxes (federal, state, local, social security, medicare), benefit deductions, net pay
the accounting system and the data flow management provide info on how the ________ will be used by the business
funding
crowdfunding
funds received by a business by soliciting a large number of very small investors usually via the internet
equity investment
funds received by a business in exchange for a percentage ownership of the business
factoring
accounts receivable that are sold at a discount to another company to receive immediate cash
what is the generic term used to describe a type of non-equity funding tied to the business?
debt
debt
generic term to describe any type of non-equity funding tied to the business
any form of capital infusion that must be paid back with interest is called
debt
grant funding typically comes from:
gouvernement and nonprofit agencies
business angels
high-net-worth individuals who invest in businesses not as a business but as an individual
T/F: in the case of business failure, debt must be paid back prior to any equity investors receiving a distribution
true
grants
special funds that don't require repayment and are designed to aid businesses in specific areas
