Chapter 13 Entrepreneurship

True or false: For many small businesses, the cash receipts budget is the same as the sales budget.

True

Payables are:

amounts that are owed to vendors for merchandise or services purchased on credit.

Cash

are/is money that is immediately available to be spent

The ______ balance is the sum of money that has actually been received and paid out of a depositor's account.

bank available

________ is the practice of trading goods and services without the use of money.

barter

The company book balance reflects a business' internal accounting record of all transactions that affect ______.

cash

The ______ identifies when, how, and why cash is expected to coming into a business, and when, how, and why it is expected to leave.

cash budget

A schedule of the amounts and timings of payments of money out of a business

cash disbursements budget

______ is planning and tracking the amounts and timing of money to be received and paid during the business cycle.

cash flow management

A ______ budget is a schedule of the amounts and timings of the receipt of cash into a business.

cash receipts

A reduction in a merchant's bank account by a credit card company is called a(n) ______.

charge back

An entity that processes check and electronic fund transfers for banks and other financial organizations is called a ______.

clearinghouse

The sum of the cash inflows and outflows recorded in a firm's accounting records is the ______ balance.

company book

______ is the practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold.

consignment

The bills and coins printed by governments to represent money are called ______.

currency

Money held in checking and savings accounts are/is called ______.

demand deposits

Cash payments received before a product is completed or delivered are called _____.

deposit and progress payments

Assets that may be quickly converted to cash are called ______.

Cash equivalents

True or false: The most common way employees steal cash from employers is through larceny and embezzlement.

False

Borrowing money secured by a firm's accounts receivable

factoring receivables

Business can earn cash flow from operations, investing and

financing

Which of the following is true of the bank available balance? - It may differ significantly from the bank ledger balance. - It represents the perceived value of cash of a business. - It is the sum of cash inflows in an account. -It helps identify similarities between book and bank balances.

it may differ significantly from the bank ledger balance

______ consists of stocks and bonds that are traded on an open market.

marketable securities

Rewards that do not require payments of cash are called --_______ incentives.

noncash

Amounts that are owed to a business for merchandise that was sold on credit are called ______.

receivables

An accounting process that identifies the causes of all difference between book and bank balances is known as ______.

reconciling

Customers may overdraft their accounts by paying a check when _____.

the available balance is not sufficient to cover the check amount

______ is a method of controlling the timing of cash outflows that is invisible to suppliers and vendors.

timing purchases

True or false: Timing purchases is a technique that can provide a business with extra time to pay a bill for inventory, equipment, or services.

True

The ______ balance is the sum of deposits and withdrawals recorded in a bank's accounting records.

bank ledger

_____ are known to charge back a sale amount in order to remove it from a business's account if situations such as fraud or customer challenge arise.

credit card clearing services

______ is a financial crisis that is caused by a business growing faster than it can be financed.

growth trap

A situation that occurs when a check is returned to a depositor because the writer of the check did not have a bank available balance equal to or greater than the amount of the check is called

nonsufficient funds

A reduction in the sales price provided to credit customers for paying outstanding amounts in a timely manner is referred to as a _______ for prompt payment.

discounts

Percentage discounts from gross invoice amounts provided to encourage prompt customer payment is called ______.

trade discounts

Recurring payments examples:

wages and rent