Entrepreneurship - Chapter 9
accounts payable
Amounts owed by a business to its vendors for merchandise purchased on credit
transaction
Any business activity that changes assets, liabilities, or net worth
balance sheet
a financial statement that lists what a business owns, what it owes, and how much it is worth at a particular point in time
income statement
a financial statement that shows the business's revenues and expenses incurred over a period of time and the resulting profit or loss
payroll
a list of people who receive salary or wage payments from a business
journals
accounting records of the transactions you make; there are five different types that businesses use to record their transactions: sales, cash payments, cash receipts, purchases, and general
liabilities
amounts you owe to others
account
an accounting record that provides financial detail for a particular business item, such as for cash, sales, rent, and utilities
cash flow statement
an accounting report that describes the way cash flows into and out of a business over a period of time
check register
booklet in which an account holder records the dates and amounts of the checks as well as the names of people or businesses to whom he or she has written the checks
net worth (owner's equity)
difference between what is owned, called assets, and what is owed, called liabilities
assets
items of value that you own
equity capital
money invested in a business in return for a share in the profits of the business
debt capital
money loaned to a business with the understanding that the money will be repaid within a certain time period, usually with interest
collateral
property that a borrower forfeits to the bank providing the loan if he or she defaults on the loan
accounts receivable
the amounts owed to a business by its credit customers
debt-to-equity ratio
the relation between the dollars borrowed (debt) and the dollars invested in a business (equity)