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.