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4.01
Business Essentials
| Term | Definition |
|---|---|
| accounting | the process of keeping and interpreting financial records |
| accounts payable | all monies owed by the business to others |
| accounts receivable | all monies owe to a firm by its customers |
| acquisition of funds | finance activity involving making decisions about financing |
| administration of assets | finance activity involving making decisions about a firm investments |
| assets | anything of value that a business or individual owns |
| capital budgeting | a process in which a firms financial managers determine which projects it should invest in |
| capital investment decisions | decisions that determine which projects a business will invest in |
| capital investments decisions | decisions that determine which projects a business will invest in how the investment will be financed and weather to pay dividends to shareholders |
| capital structure | a firm mix of financing usually some combination of debt and equity |
| cash conversion cycle | ratio that refers to the number of days between a company paying for raw materials and receiving cash from selling the products made from those raw materials |
| debt funding | using money that is lent by a bank or other institution to finance a project |
| dividend | a sum money paid to an investor or stockholder as earnings on an investments |
| equity funding | using money from investor to finance a project in exchange for shares in the company |
| finance | in business the function that involves all money and money management matters |
| financing | funding a business activity or project through debt equity or venture capital |
| return on capital | a measure of how well a business generates cash flow in relation to the capital it has already invested in itself |
| venture capital | invested money used for new business opportunities |
| working capital management | management of a firms current balance of assets and liabilities involves accounts payable and receivable inventory and cash |
| accountant | an individual who has had specialized training in accounting procedures |
| accounting cycle | a process or series of steps that business compete to maintain their financial records effectively |
| accounting standards | rules that accountants must follow when preparing financial statements |
| accounting system | the methods and producers used in consistently handling the business financial information |
| accrual accounting method | a method of accounting that records transactions at the time they occur even if no money changes hands at the time |
| assets | anything of value that a business owns |
| balance sheet | a financial statement that captures the financial condition of the business at the particular moment |
| bookkeeping | the steps of the accounting cycle that involve recording each business transaction the process of analyzing financial transactions journalizing |
| cash | currency and coins |
| cash accounting method | an accounting method in which income and expenditures are recorded at the time the money changes hands |
| cash flow statement | a financial summary with estimates as to when where an how much money will flow into and out of a business |
| credit | the arrangement by which business or individuals can purchase now and pay later |
| expenditures | the monies that a business spends also called expenses |
| expenses | the monies that a business spends also called expenditures |
| financial accounting | a type of accounting that involves preparing and reporting financial data to external users who are not directly involved in business operations |
| financial statement | a summary of accounting information |
| income | money received by a business or an individual from outside sources |
| income statement | a financial summary that shows how much money the business has made or has lost also called the profit and loss statement |
| investors | those who invest their funds in a business may be owners or stockholder |
| journal | a special book or computer program in which a business's transactions are recorded in order |
| ledger | the accounting record for a specific department or area of the business |
| liabilities | debts that the business owes |
| managerial accounting | a type of accounting that involves preparing and reporting financial data |
| net worth | the total value of the business |
| owners equity | the amount an owner has invested in the business plus or minus profits and losses |
| transaction | a business activity such as a sale a purchase or a return |
| trial balance | the listing of a business different accounts and their current balances |
Created by:
Alzyion.s506
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