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