Study guide, chapter 14
Short-term debt
A ______ must be paid in less than one year from the date of the financial statement on which it is reported but can be sold to other investors at any time
Sole proprietorship
A business formed by an individual who is responsible for all debts and claims against the business is called a___
Credit reporting agency
A business that collects, collates, and reports information concerning an entity's use of debt is referred to as a___
Growth trap
A crisis in which there is a shortage of cash for expanding a business after an exponential increase in sales is termed___
Corporation
A legal "artificial" entity that is formed by filing specific documents with a state government is called a___
Overdraft
A negative balance in a depositors bank account is referred as a___
Availability float
A___ is a delay in transferring money among banks due to internal procedures
Debt
A___ is a legal obligation to pay money in the future
Profit
The amount that revenue exceed expenses is referred to as___
Debt-to-equity ratio
___ measures the extent to which a business can meet its obligations for the long haul
Cash budget
A___ identifies when, how, and why money is expected to come into the business, and when, how, and why it is expected to leave
Payables
Amounts owed to vendors for merchandise or services purchased on credit are called
Clearinghouse
An entity that processes checks and electronic fund transfers for banks and other financial organizations is called a___
Gift
Any valuable asset that is donated to a business without any obligation to replay or to give up any ownership interest is called a___
Operations
At the___ stage of a business, the emphasis of financial management is to build owner wealth, to conserve assets, to match cash inflows to outflows, and to maximise the return on capital assets by making optimal investing decisions
Demand deposits
Checking and saving accounts are the most common forms of
Bills and coins
Currency is a form of cash represented by
Cash equivalents
Debt investments that mature in less than three months are an example of
Float
Delays in the movement of money among depositors and banks is referred to as a___
Profit
The amount that revenues exceed expenses is termed
Grants
Gifts of money made to a business for a specific purpose are referred to as___
Demand deposits (1)
Make up most of the concurrency cash which is available immediately
Equity capital
Money contributed to businesses i return for part ownership of the business is called___
Cash
Money that is immediately available to be spent is called
Trade discounts
Percentage of concession in gross invoice amounts provided to encourage prompt payment are called___
Estimate the bank ledger balance for managing the cash flow of a business
Reconciliation of bank and book balances helps to:
Receivables
Refers to amounts that are owed to a business for merchandise that was sold on credit
Marketable securities
Represent either ownership or debt of publicly held firms and government issued debt, in the form of bonds, notes and bills
Collateral
Something of value given or pledged as security for payment of a loan is called___
Growth
The emphasis of financial management during the___ phase is to obtain increasing amounts of cash inflows to pay for added inventory, productive assets and employees
Risk
The level of probability that an investment will not produce expected gain is called___
Using personal money
The most common strategy employed by small businesses for handling money shortages is___
The owners themselves
The number one source for financing for small businesses is from___
Bank available balance
The sum of money that has actually been received and paid out of a depositors account is termed___
Reconciling
Which of the following terms refers to the accounting process that identifies the causes of all differences between book and bank balances
Outside equity
___ is money from selling part of a business to people who are not and will not be involved in the management of the business
Return on equity
___ measure a management's effectiveness in using the invested capital of the business to provide profit
Leverage
___ ratios measure the relative risk that a business setback could cause bankruptcy
Liquidity
___ ratios measure the business's ability to pay debts and expenses that are due in the current accounting period
Non-sufficient fund
___ refers to 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
Consignment
___ refers to the practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold
Bank ledger balance
_____ is the name given to the banks accounting system for all recognised transactions that affect the account, including deposits, electronic transfers, service fees and checks presented to the bank for payment