What is one of the first things you should consider when determining how much money you need for the type of business you would like to open?
Personal Financial Objective
100
How many months of operating expense capital should an entrepreneur figure in his/her initial capitalization plan?
3 months
100
Projected report used to show expected financial status of a business at a future date
Pro Forma Financial Statements
100
An income statement can be compared to a _________ because it shows financial activity over a period of time.
video
100
An individual trained in the methods and procedures used in assimilating and maintaining financial records
What is an accountant?
200
The income left over after all expenses are paid
What is net profit?
200
Entrepreneurs will know the total amount of money needed for the business idea by adding these items...
one-time only capital needs + initial monthly/operating expenses
200
A balance sheet can be compared to a ____________. It shows a fixed moment in time.
snapshot
200
Growth projections can be made based on factors such as (name one):
market population growth
Business growth from becoming better known
Industry growth
200
Listing of revenues received each day from the business activity
What is a sales journal?
300
In researching the clothing industry, Chloe finds that a successful clothing business can expect to make a profit of 30% of total (gross) sales. Her personal financial objective is $40,000. How much must the store sell for Chloe to meet her objective?
Explain the difference between a business’s revenues and a business's expenses...
Business’s revenues (monies coming in) and business expenses (monies coming out)
300
Lists customers by name and the amount they owe the business for goods and services bought on credit
What is an accounts receivable ledger?
400
Name 3 one time-only costs...
Inventory
Fixture
Leasehold improvement costs
Appropriate sign
Cash register(s)
Stockroom shelves
Advertising for a “grand opening”
Utility deposits
Change for cash register
400
Building and equipment costs can be reduced considerably by ____________, rather than purchasing.
leasing
400
What is the basic accounting formula?
ASSETS = LIABILTIES + OWNER'S EQUITY
400
Purpose is to show all payments made by check on a particular day, to whom the check was written, and the type of expense incurred
What is a disembursement journal?
400
All purchases of current or long-term assets...
What is a Furniture, Fixture, Equipment Ledger
500
If the markup of inventory is 75% and retail sales is $150,000, how much did the sold inventory cost the business owner?
RETAIL SALES / (1 + MARKUP PERCENT) = COST
The number of times a business sells the amount of its base inventory in a year
What is inventory turnover rate?
500
Suzy Q. has just opened a beauty salon. She starts her business with $100 she has saved up and a $100 loan. She will repay the loan at 5% a day. She also buys her initial inventory: 5 bottles of shampoo at $7 each. She sells 3 bottles of shampoo at $10 each. Show her balance sheet
see handout
500
Listing, by account name, of all the bills the business needs to pay
What is an accounts payable ledger?
500
Any money borrowed for business activity should be recorded, showing from whom it was borrowed, date the note becomes due, interest rate to be paid, and any special payment arrangements in this...