Financial Records
Accounts receivable means money _____ the business; accounts payable means money the business _____.
Receivable = money owed TO the business;
Payable = money owed BY the business.
What is the equation for Net Profit?
Net Profit = Gross Profit – ALL Expenses
What are fixed costs? Give one example.
Costs that do not change Ex: rent.
What is debt financing?
Borrowing money and repaying with interest
What is a demand deposit?
Money available on demand (checking)
What is an asset?
Anything of value owned by the business.
COGS includes what?
Materials, direct labor, production costs.
What are variable costs? Give one example
Costs that change Ex: materials, groceries
What is equity financing?
Selling ownership shares in the business
What is a CD account?
A savings deposit held for a set time
Define an income statement.
A report showing revenue (sales), expenses, and profit.
What is the equation for Gross Profit?
Gross Profit = Revenue – COGS
What is the break-even equation?
Break-even = Fixed Costs ÷ (Price – Variable Cost)
What is retained earnings financing?
Using profits the business kept
Name the three major types of banks
Commercial banks
savings institutions
credit unions