Money
Would you rather receive $100 today or $101 in a year? Why?
$100 today, since it can be invested
What are capital gains?
Profit earned from the sale of an asset (e.g., stocks, real estate)
Give three examples of commodities
E.g., gold, oil, agricultural products (wheat, corn)
What are the three main financial statements?
What is an ethical dilemma?
A situation in which a difficult choice has to be made between two courses of action
What is credit?
A person/business borrows money with the promise of paying it back (e.g., credit cards, loans, lines of credit)
Who needs financial information?
Individuals, businesses, governments
Is real estate a type of investment?
Yes
What is the basic accounting equation?
Assets = Liabilities + Equity
Is it always illegal to be unethical?
No, an unethical action may or may not be illegal
What is the most common type of currency?
Paper money
What are credit unions?
Non-profit organisations that offer the same services as banks, but have lower fees and more favourable interest rates
Who are stockbrokers?
Professionals who buy and sell securities on behalf of their clients; can also provide investment advice
What are audits?
A formal review of a person or company's financial records by professional accountants
What is the term for the obligation to reveal all information relevant to a transaction, or a publicly traded company's financial statements?
Full Disclosure
What does EFT stand for?
Electronic Funds Transfer
What are dividends?
The income received from stocks or mutual funds, which is usually a portion of the profits earned by the company
What is the difference between stocks and bonds?
Stocks represent ownership in a corporation. Bonds are a loan to a company or government.
What is managerial accounting?
Usage of financial information for decision-making
Marketing or Finance?
FINANCE
What are the three functions of money?
Medium of exchange, unit of measure, store of value
What principle is the concept of insurance based on?
What are mutual funds?
The money collected from various investors is pooled together to invest in different assets
What are the three main sections of a cash flow statement?
Cash flow from operating, investing, and financing activities
What is ERM?
Enterprise Risk Management - a company's way of managing risks