4.01-4.02

Deposit slip

A slip of paper kept by the bank to show how much money you put into your account.

Joint account

AN ACCOUNT OWNED BY TWO OR MORE PEOPLE

Financial Performance Ratio

comparisons using a company's financial data to determine how well a business is performing.

Payroll records

contain information on all employees of the company and their earnings

commodities

economic goods or products before they are processed and/or given a brand name, such as a product of agriculture

Asset records

identifies the buildings and equipment owned by the business, their original and current value, and the amount owed if money was borrowed to purchase the assets

Records of accounts

identify all purchases and sales made using credit

Inventory records

identify the type and number of products on hand for sale

Balance Sheet

includes assets, liabilities, and owner's equity

Real estate

includes land and anything attached to it.

Income statement

includes sales, expenses, and net profit or loss.

Market value

is the price for which a share of stock can be purchased.

Stock exchange

is where the trading of securities take place.

Operating budget

used for ongoing business operations for a specific period.

Collectibles

items of personal interest to collectors that can increase in value in the future

Cash records

list all cash received and spent by the business

Bank statement

monthly printout from your bank that shows all transactions in your account *estado bancario*

Preferred stock

pays dividends at a set rate.

Yield

production of a certain amount

Financial Statement

provide a picture of the financial performance of a business

Common stock

represents general ownership in company and sharing of profits

Drawer

somebody who draws a check or money order

Equity

the difference between the market value of a property and the claims held against it

Bank reconciliation

the document created to show how the two balances (your own record of your checking account and the bank's record of your account) were brought into agreement.

Drawee

the person or organization from whose account money is taken when a check or other order for payment is drawn

cash

this is the money you have avaliable.

Federal Deposit Insurance Corporation (FDIC)

to insure bank deposits. They made sure no money was lost so that there would never be another Great Depression like that one again.

Business Budget

used to anticipate sources and amounts of income and to predict expenses for a specific business activity or the entire business.

Cash budget

used to estimate cash flow in and out of a business.

Credit Unions

which are not-for profit, serve their members only, and are owned by their depositors.

Mutual Savings Bank

which are owned by the depositors and specialize in savings and home loans.

Commercial Bank

which offer many different services, including savings, loans, and checking accounts.(bank of america; wachovia; etc)

Savings and Loan

which traditionally specialize in savings and home loans, but now are very similar to commercial banks.

Blank endorsement

(Consists of endorser's name only) Anyone who has a check with a blank endorsement may cash it.

Federal Reserve System

(Fed) is a centralized banking system;to supervise and regulate member banks and help serve the public efficiently.

financial record

.Asset records, Depreciation records, Inventory records, Records of accounts, Cash records, Payroll records, Tax records

Checking account

a bank account against which the depositor can drawn checks payable on demand

Signature card

a card with your name, address, and authorized signature of a bank customer

Payee

a person to whom money is paid

budget

a plan specifying how resources, especially time or money, will be allocated or spent during a particular period

Stop payment order

a written notice that tells the bank not to pay a certain check

Deposit institutions

accept deposits from people and businesses and use them to finance their business.

Tax records

all taxes collected, owed, and paid

Endorsement

allows the payee to cash the check, deposit the check or transfer payment of the check to someone else.

types of financial ratios

Current ratio, Debt to equity ratio, Return on equity ratio, Net income ratio

Mutual fund

Companies assist investors of mutual funds by studying companies stocks and bonds, and then buying a variety of stocks and bonds to sell.

Depository

Earns money to finance their business by accepting deposits from customers

Non-depository

Earns money to finance their business by selling specific services such as policies, investments, and loans

Current ratio

Equals current assets/current liabilities; Normally, the higher the ratio, the more favorable it is for the company

Return on equity ratio

Equals net profit/owner's equity; Normally, the higher the ratio, the more favorable it is for the company.

Debit to equity ratio

Equals total liabilities/owner's equity; Normally, the lower this ratio, the more favorable it is for the company.

Net income ratio

Equals total sales/net income; Normally, the lower the ratio, the more favorable it is for the company, as it takes less in sales to generate net income.

Start-up

Financial planning includes determining the amount of money needed to start and operate the business until a profit is made. Also the major sales and expenses are determined.

Expansion

Financial planning includes determining whether enough money is made to cover growth opportunities.

operation

Financial planning includes determining whether they are making enough money to operate. The basic formula used is Revenue - Expenses = Profit or Loss.

Stockholder

buy and sell stock and bonds at a set price for a commission for stockholders.

Investing

Investing is using savings to earn more money for future financial security.

Corporate bonds

Lenders versus owners as it relates to investing in a company's stocks and bonds

Debit card

Like a credit card, but directly attached to a checking account, and can be used with a pin to pay for items at a store.

Restricted endorsement

Limits use of the check so it can be deposited only to endorser's account

Municipal bonds

Municipal bonds are issued by local and state governments for public service projects.

Futures contract

an agreement to buy or sell a specific amount of a commodity or financial instrument at a particular price on a stipulated future date

Liquidity

being in cash or easily convertible to cash

steps for preparing a business budget

Prepare a list of income and expense items; Gather accurate information from business records; Create the budget; Clearly communicate the budget to key employees in order to make sound business decisions.

financial planning

Reduces financial uncertainties Increases control of financial activities Provides a 'map of finances' for business Makes it easier to 'stick' to financial processes and goals

Saving

Saving is imperative to a financial plan, which makes available money for investing.

Full endorsement

Signature on a check indicating the person, account number, or bank to which the check is being transferred, and the payee's name.

Check register

The book in which you keep records of checks, deposits, debit card transactions, and atm withdrawals.

depreciation records

The amount assets have decreased in value due to age or use

Outstanding checks

checks that have not been deducted from the bank statement balance.

Assessed value

The value of an asset determined by tax authorities for the purpose of calculating taxes

Special Endorsement

Transfers payment of a check to someone else.