Term
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Definition
| Money owed to your business by customers who purchased your product on credit |
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Term
| Pros to offering credit to customers |
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Definition
Providing credit usually results in higher sales revenue because of increased repeat business
Reduces cost of selling |
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Term
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Definition
§ Delays the receipt of cash
§ You have to replace the missing cash
§ Eventually someone won’t pay |
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Term
| Use your receivables in two ways to quickly lay your hands on cash |
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Definition
Pledge receivables as collateral for a commercial loan
You can sell your receivables to a finance company in a process called factoring |
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Term
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Definition
| selling the rights to collect accounts receivable to an entity outside your business |
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Term
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Definition
–Giving a third party legal rights to debts owed your business in order to provide assurance that borrowed money will be repaid. |
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Term
Right amount of inventory is determined by: |
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Definition
1.Cost of processing an order
2.Cost of keeping merchandise in inventory
3.Cost of lost sales if you run out
4.Time it takes to receive inventory after it’s ordered |
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Term
†Economic order quantity (EOQ) |
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Definition
–A statistical technique that determines the quantity of inventory that a business must hold to minimize total inventory cost.
EOQs are frequently used in larger companies with steady demand.
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Term
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Definition
–The amount of inventory that results in the minimum cost, when considering the cost of lost sales resulting from running out of stock, the number of units sold per day, and the number of days required to receive inventory |
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Term
–Also known as the reorder point |
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Definition
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Term
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Definition
–An amount of inventory carried to ensure that you will not run out of inventory because of fluctuating levels of sales. |
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Term
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Definition
–The practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer. |
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Term
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Definition
–A term for just-in-time inventory systems in which product is ordered and placed into production only after a sale has been completed. |
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Term
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Definition
–The purchase of inventory only after a sale is made; very typical with Internet firms. |
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Term
| Just-in-tim inventory reduces inventory levels by.... |
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Definition
- accepting inventory only as it is sold
- assembling product in the absolute minimum time possible
- shipping product to the customer immediately upon completion
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Term
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Definition
–process of physically counting business assets on a set schedule |
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Term
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Definition
–recording the receipt and sale of each item as it occurs |
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Term
| Other approaches to inventory control include (4) |
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Definition
- periodic inventory
- perpetual inventory
- bar coding
- point-of-sale (POS) system
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Term
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Definition
–Obtaining a Universal Product Code number and scan-ready visual tag, and printing it on the product or its packaging. Bar codes can then be scanned and recognized by others. |
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Term
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Definition
–Hardware and software combinations that integrate inventory management directly into accounting software. |
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Term
| UPCs are registered with and controlled by a private company called... |
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Definition
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Term
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Definition
–Assets that are expected to provide economic benefits for periods of time greater than one year. |
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Term
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Definition
–The difference between the original cost of an asset and the total amount of depreciation expense that has been recognized to date. |
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Term
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Definition
–The net amount realized after subtracting the costs of getting rid of an asset from its selling price. |
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Term
| There are two fundamental kinds of assets in a business..... |
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Definition
| short term, which includes inventory and accounts receivable, and operating or capital assets |
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Term
| Most small businesses determine the value of capital assets using some combination of the four common accounting methods of assigning asset value which are..... |
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Definition
- book value
- disposal value
- replacement value
- fair market value
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Term
| Depreciation is based on three assumptions: |
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Definition
- that the asset has a fixed, determinable period of utility (called useful life)
- that the asset has a fixed, determinable value that will exist when the depreciation process is complete (salvage value)
- that the value of the asset will decline in a continuous and predictable manner over the period of utility
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Term
Arm’s length transaction |
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Definition
–A business deal where the parties have a prior relation or affiliation, but where the business is conducted as if they were unrelated.
–approach is done to help guard against potential conflicts of interest.
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Term
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Definition
–The cost incurred to replace one asset with an identical asset. |
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Term
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Definition
–The price at which goods and services are bought and sold between willing sellers and buyers in an arm’s-length transaction. |
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Term
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Definition
–Determination of the amount of assets held by the firm for sale or production. |
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Term
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Definition
–A count of all the inventory being held for sale at a specific point in time. |
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Term
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Definition
–The total cost of acquiring an asset, including such costs as purchase price, transportation, installation, testing, and calibrating in order to ready it for its first productive use. |
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Term
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Definition
–The total cost of replacing an asset with an essentially identical asset. |
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Term
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Definition
–The sum of all costs of capital assets, including acquisition, ownership, operation, and disposal. |
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Term
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Definition
–Cost incurred in financing, insuring, taxing, or tracking an asset.
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include interest on funds borrowed and the opportunity costs of funds invested to acquire it
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insurance, property taxes, value of the space, cost of record keeping and security for the asset
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Term
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Definition
–The direct cost incurred in using an asset for the purpose for which it was intended.
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Term
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Definition
Cost incurred in the activities necessary to get rid of an asset
- such costs include meeting environmental regulations, disassembly, advertising, commisions, shipping, insurance, and fees
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Term
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Definition
the process of deciding among various investment opportunities to create a specific spending plan
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Term
| What is the goal of capital budgeting? |
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Definition
| to improve the quality of decisions about how to best use the scarce resources of the business |
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Term
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Definition
–The amount of time it takes a business to earn back the funds it paid out to obtain a capital asset. |
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Term
†Return on investment (ROI) |
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Definition
–A capital budgeting equation used to measure the relationship between initial investment and the profits that are expected to be received from making the investment. |
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Term
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Definition
| ROI= (average annual profits)/(average investment) |
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Term
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Definition
–A long-term rental in which ownership of the asset never passes to the person paying for the lease. |
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Term
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Definition
–A lease in which at the end of the lease period the asset becomes the property of the lessee, possibly with an additional payment. |
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Term
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Definition
| formalized partnership between two or more businesses for some specific purpose |
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Term
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Definition
–The materials, labor, and energy put into the production of a good or service. |
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Term
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Definition
–The process of transforming materials, labor, and energy into goods or services. |
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Term
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Definition
–The service or product that is produced for sale. |
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Term
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Definition
–The process of communicating within or to the organization about how the outputs worked or were received. |
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Term
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Definition
–The ratio measure of how well a firm does in using its inputs to create outputs, literally, productivity is outputs divided by inputs. |
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Term
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Definition
–The comparison of productivity ratios to see the extent that an organization has generated more outputs with fewer inputs. |
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Term
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Definition
–a product’s or service’s fitness for use, measured as durability, reliability, serviceability, style, ease of use, and dependability. |
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Term
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Definition
–the line of distribution of a product from its start as materials outside the target firm to its handling in the target firm to its handling by sellers into the hands of customers. |
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Term
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Definition
–Activities identified by authoritative bodies as examples of optimal ways to get things done in a particular industry, profession, or trade. |
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Term
| 3 general typs of events that cause business risk |
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Definition
- events related to the property of the business
- events related to personnel
- events related to customers and others
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Term
Regulation of the workplace |
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Definition
–Laws and governmental rules that limit the freedom of business owners to manage their businesses as they please. |
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Term
Loss of key employees is a particularly ____ for small businesses |
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Definition
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Term
| Rehabilitation Act of 1973 |
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Definition
| an act of congress that provides training for workers who are injured on the job |
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Term
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Definition
| A series of acts by Congress that prohibit discrimination on the basis of race, color, religion, sex or national origin |
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Term
| 2008 Consumer Product Safety Improvement Act |
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Definition
Enforces new limits on lead in children's products and makes it illegal to sell any items that don't meet those limits or have been recalled for any other reason
The standards were originally interpreted to apply only to new products, but now the CPSC says they apply to used items as well. |
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Term
| In order to comply, stores, flea markets, charities and individuals selling used goods — in person or online — are expected to |
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Definition
| consult the commission's 24-page Handbook for Resale Stores and Product Resellers and its Web site for a breakdown of what they can't sell. |
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Term
| OSHA rules in most industries do not apply to firms with fewer than____ employees |
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Definition
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Term
| Events Related to Customers and Others (2) |
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Definition
1.Injuries suffered while upon business property
2.Injury or damage that is caused during the use of the business’s products. |
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Term
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Definition
| payment for injury or damage that occurs during the use of the business' products |
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Term
| The 4 ways to manage risks are.... |
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Definition
- making specific plans for and arrangements to deal with foreseeable events
- creating and enforcing an appropriate code of conduct for yourself and employees
- ensuring that valuable assets are physically secure
- actively working to get rid of any physical hazards in your workplace
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Term
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Definition
| programs or pieces of equipment called routers which serve as a barrier between your PC and the Internet |
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Term
| Aeneas Internet and Telephone |
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Definition
- Hit by a tornado
- had back ups and plans ready to go
- back into operation within 72 hours
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Term
| Leidenheimer Baking Company |
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Definition
Sandy’s kit included: financial and payroll records, utility contact information, updated phone lists for his customers and employees, back-up files and software, as well as computer hard drives.
As part of Sandy’s written plan, he set-up a satellite office for the Leidenheimer Baking Company in Baton Rouge where he made contact with his bank, forwarded phone lines, and was receiving forwarded mail within two days after the evacuation.
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Term
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Definition
- Bill Munro, owner of a dry cleaning, uniform rental and safety apparel business
- Found out that emergency plan was outdated when hurrican rita hit
- only had a communication plan with cell-phones
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Created a more in-depth communication program that requires employees to contact their supervisors within 48-hours to let them know their location and a phone number where they can be reached.
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He stocked-piled supplies including bedding and linens, hygiene products and enough food to feed 15 key employees for up to three and a half days.
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Term
| Intellectual property rights |
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Definition
| comprise the legal rights to use unique features of products or services that provide competitive advantage. |
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Term
| The problem with legal protection methods for intellectual property is that there is______ |
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Definition
| NO governmental agency that will assist you, as the owner of a small business, in maintianing your legal rights |
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Term
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Definition
–A type of internal control that separates the physical control of an asset from the person accounting for that asset. |
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Term
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Definition
the highest source of theft 45%
- shoplifting is 35.6%
- administrative is 15.4%
- vendor fraud is 3.7%
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Term
| Nearly 40 percent of all frauds that were detected were found because of a.... |
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Definition
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Term
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Definition
–A set of rules and procedures that work to limit the opportunity for employee theft or malfeasance. |
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Term
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Definition
–Laws and regulations that specify the requirements of taxation
–include franchise or corporation taxes, income taxes, employee taxes, sales and use taxes, and property taxes |
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Term
| Managing Risk from Employee Violation of Government Regulations usually involves (3) |
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Definition
1.Have a written policy provided to each employee
2.Conduct training of managers and employees concerning those policies,
3.Immediately and consistently act upon receipt of any complaint. |
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Term
| Handling ADA Requirements (3) |
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Definition
1.Determine if you are subject to any of the provisions of the ADA
2.Obtain the services of experts on the ADA to evaluate the level of your compliance
3.Work diligently to meet the requirements to which you are subject. |
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Term
A properly conducted, independent internal audit will give you: |
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Definition
†An evaluation of your overall level of business risk.
†An objective evaluation of your risk control structure.
†A systematic analysis of your business processes and controls.
†Information on irregularities detected during the audit process.
Review of your firm’s compliance with relevant regulations.
A review of the existence and value of the assets of your business.
Review of operational and financial performance.
Recommendations for more effective and efficient use of resources. |
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Term
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Definition
–A contract between two or more parties in which one party agrees, for a fee, to assume the risk of another. |
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Term
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Definition
–Contractual provisions of insurance policies that specify what risks the insurance company is assuming. |
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Term
| Insurance is determined by.. (4) |
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Definition
–Property’s insurable value
–Amount of deductible loss
–Amount of co-insurance required
–Loss limits of the policy |
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Term
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Definition
–The amount of an asset for which a company will write an insurance policy. |
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Term
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Definition
–An amount of loss that will not be paid by an insurance company. |
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Term
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Definition
–A contract stipulation that requires a policyholder to carry insurance in an amount equal to a stated minimum percentage of the market value of the property insured. |
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Term
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Definition
–Bonds, also called dishonesty bonds, that repay employers for losses caused by dishonest or negligent employees. |
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Term
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Definition
–An agreement with an insurance or bonding company that will pay a specified amount in the event that the entity bonded fails to comply with specified contractual requirements. |
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Term
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Definition
–Insurance that provides money to owners of a business to buy the shares of any deceased owner from that owner’s heirs. |
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Term
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Definition
–An agreement between two or more entities to pool resources in order to complete a project |
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Term
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Definition
–A fee paid by a client to an attorney to engage the attorney’s services. |
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Term
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Definition
–Fee paid by a client to an attorney for legal services that is dependent upon the outcome of a case. |
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Term
Trade name or assumed name or a doing business as (dba) |
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Definition
–The name under which a business is operated. |
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Term
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Definition
–A being, human or nonhuman, such as a corporation, that is recognized as having rights and duties, such as the right to own property. |
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Term
The stock of S corporations is freely transferable, while the ownership of ____ is not. |
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Definition
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Term
This free transferability of interest means the shareholders of S corporations are_______ |
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Definition
| able to sell their interest without obtaining the approval of the other shareholders. |
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Term
| S corps are limited to only_____ shareholders |
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Definition
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Term
| an LLC can elect to be taxed as a sole proprietor, partnership, S-corp or corporation, providing flexibility with __________ taxation |
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Definition
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Term
An LLC is simpler to operate because it is not subject to the formalities by which _____ must abide. |
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Definition
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Term
| An LLC can have __________ members |
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Definition
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Term
| A corporation can be a part of a LLC... True or False? |
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Definition
True
This allows you to create an additional level of ownership, which is designed to create an entity that can offer such traditional fringe benefits as retirement plans and an additional level of protection from liability. |
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Term
Some states do not tax partnerships _______LLCs. |
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Definition
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Term
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Definition
Each member's pro-rata share of profits represents taxable income--whether or not a member's share of profits is distributed to him or her.
Earnings of most members of an LLC are generally subject to self-employment tax.
Earnings of an S corporation, after paying a reasonable salary to the shareholders working in the business, can be passed through as distributions of profits and are not subject to self-employment taxes.
Lack of uniformity in Limited Liability Company statutes. Businesses that operate in more than one state may not receive consistent treatment. |
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Term
The choices available to the family of a LLC or S-corp would generally be |
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Definition
–to sell the deceased's stock (with an S Corp. it can be freely sold to anyone)
–attempt to live off of any dividends that the corporation may pay
–assume a working position within the corporation |
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Term
A stock purchase plan is similar to a cross purchase plan whereby......... |
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Definition
| a price is determined and each stockholder agrees to purchase a proportionate share of the deceased shareholder's stock. |
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Term
Articles of organization |
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Definition
–Document setting forth information about a limited liability company that is filed with the state to establish an LLC. |
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Term
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Definition
–Earnings of the business are taxed once with the owners paying the taxes. |
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Term
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Definition
–Earnings of the business are taxed twice with the business as well as its owners being subject to tax. |
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Term
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Definition
–Earnings of the business are distributed to the business owners and those owners pay individual tax on the earnings. |
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Term
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Definition
–The dissolution of a corporate form, making it back into a sole proprietorship or general partnership, if the court finds that the owner carelessly mixed up personal and business assets or finances. |
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Term
| Which corporation is double taxed? C or S corporations |
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Definition
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Term
To be an independent contractor the person has to display three characteristics: |
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Definition
1.Behavioral: The contractor solely decides how the work is to be done.
2.Financial: The contractor pays his own expenses directly
3.Relational: The independent contractor is employed for a project and the service the contractor provides is not central to the operation of the business. |
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Term
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Definition
–A federal law describing the steps publicly traded businesses must take to protect and provide their key financial information. |
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Term
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Definition
–A formal dispute resolution method that operates using the court system, typically with a lawyer representing each party. |
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Term
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Definition
–A dispute resolution process held instead of court cases in which both sides present their case to a legal professional. |
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Term
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Definition
–Part of a contract in which a person agrees not to open a certain type of business or seek employment doing certain things in a particular area for a period of time. |
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Term
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Definition
–Part of a contract in which a party to the contract states that he or she will not be responsible for certain actions. |
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Term
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Definition
–A type of waiver in which a party agrees not to hold another party responsible for certain events. |
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Term
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Definition
–A 14-year patent for a new, original, and ornamental design for an article of manufacture. |
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Term
| patents, trade secrets, trademarks, and copyrights are examples of.. |
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Definition
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Term
| Factors most valuable to employees (5) |
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Definition
teamwork
recognition
training
empowerment
contribution |
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Term
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Definition
–A management philosophy of selecting and promoting people based on family ties. |
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Term
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Definition
–A management philosophy of selecting and promoting people based solely on their being the most capable person for the job. |
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