DECA BUSINESS ADMIN CORE PERFECT STUDY

401(k) Plan

A retirement savings plan sponsored by an employer. It allows employees to contribute a portion of their pre-tax salary, which may be matched by the employer, and grows tax-deferred until withdrawal. Example: An employee contributes 5% of their paycheck to a 401(k), and the employer matches half of that amount.

529 Plan

A savings plan designed to encourage saving for future education costs. Earnings grow tax-free, and withdrawals are tax-free when used for qualified education expenses. Example: Parents save for their child’s university tuition through a 529 plan.

Agent

A person or entity authorized to act on behalf of another (the principal), creating a legal relationship where the agent can bind the principal in contracts. Example: A real estate agent negotiates the sale of a house on behalf of the homeowner.

Annual Fee

A yearly charge some credit card issuers or financial institutions assess to cardholders or account holders, regardless of usage. Example: A credit card may have a $120 annual fee for premium rewards.

Annual Percentage Rate (APR)

The annual rate charged for borrowing money, expressed as a percentage that includes interest and certain fees associated with the loan. Example: A credit card with an APR of 19.99% charges that rate on outstanding balances each year.

Approach Stage

The initial phase of the sales process where the salesperson makes first contact with a potential customer, aiming to establish rapport and gain interest. Example: A car salesperson greets a customer entering the showroom and starts a friendly conversation.

Assets

Resources owned by an individual or organization that have economic value and are expected to provide future benefit. Example: Cash, buildings, and equipment are examples of business assets.

Assortment

The range of products or services offered by a business to meet the needs of its target market. It includes the breadth (variety of product lines) and depth (number of items within each line). Example: A grocery store offers a wide assortment of dairy products—milk, yogurt, and cheese in various brands.

ATM (Automated Teller Machine)

An electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller. Example: Using an ATM to withdraw $100 from your checking account.

Authoritarian Leader

A leadership style characterized by a leader who makes decisions independently with little or no input from subordinates. They maintain strict control and expect obedience. Example: A manager who gives orders and expects them to be followed without question.

Auto Insurance

A contract between you and an insurance company that protects you against financial loss in the event of an accident or theft involving your vehicle. Example: Collision insurance pays for repairs if you damage your car in an accident.

Bank Reconciliation

The process of comparing the cash balance on a company’s balance sheet to the corresponding amount on its bank statement to identify discrepancies. Example: An accountant finds that a $200 cheque hasn’t cleared yet when reconciling accounts.

Bankruptcy

A legal process where an individual or business that cannot repay their debts seeks relief from some or all of their obligations, often involving asset liquidation. Example: A retail chain files for bankruptcy after failing to pay creditors.

Beneficiary

A person or entity designated to receive benefits, such as assets, insurance proceeds, or trust distributions, from a will, trust, or insurance policy. Example: A spouse is listed as the beneficiary on a life insurance policy.

Bond

A debt instrument issued by a corporation or government entity to raise capital, representing a loan made by an investor to the issuer, which pays interest over time. Example: You buy a $1,000 government bond that pays 3% annual interest for 10 years.

Branding

The process of creating a unique name, symbol, and image for a product or company in the consumers’ minds, differentiating it from competitors. Example: Apple’s logo and minimalist design are key elements of its brand identity.

Budget

A financial plan that estimates future income and expenses over a specific period, used to allocate resources, track spending, and achieve financial goals. Example: A family creates a monthly budget to manage bills, groceries, and savings.

Business Activities

The actions and processes undertaken by a business to achieve its objectives, including production, marketing, finance, and human resources. Example: A bakery purchasing ingredients and baking bread are core business activities.

Business Cycles

The recurring fluctuations in economic activity, characterized by periods of expansion (growth) and contraction (recession), typically measured by changes in GDP. Example: During a boom, employment rises; during a recession, it falls.

Business/Feasibility Analysis

A study to determine if a proposed business venture is viable, considering factors like market demand, financial projections, operational capacity, and competition. Example: Before opening a café, the owner conducts a feasibility analysis to estimate profit potential.

Buyers

Individuals or organizations who purchase goods or services from sellers, driven by needs, wants, and the ability to pay. Example: A restaurant is a buyer of produce from a local supplier.

Buyers Market

A market condition where the supply of goods or services exceeds demand, giving buyers more bargaining power and often resulting in lower prices. Example: When many homes are for sale but few buyers exist, it’s a buyer’s market.

Buying Decision

The process a consumer or organization goes through when deciding whether or not to purchase a product or service, involving need recognition and evaluation. Example: Comparing phone models before choosing one to buy.

Buying Motive

The reason or rationale behind a buyer’s decision to purchase a product or service, which can be rational (price, quality) or emotional (status, desire). Example: Buying a luxury watch to feel successful rather than just to tell time.

Buying Plan

A systematic approach to making purchasing decisions, including identifying needs, gathering information, evaluating alternatives, and making the purchase. Example: A store manager plans seasonal inventory purchases based on last year’s sales.

Buying Process

The series of steps a consumer goes through when making a purchase—need recognition, information search, evaluation, purchase, and post-purchase evaluation. Example: Researching laptops online, comparing prices, and buying the best option.

Capital

Financial assets, such as money, property, and equipment, used to start or maintain a business or other income-generating activity. Example: A startup raises $200,000 in capital to purchase machinery.

Capital Investment

Expenditures made by a business to acquire or upgrade fixed assets, such as property, plant, and equipment, with the expectation of long-term benefits. Example: A factory invests in new automated equipment to increase production.

Cash Flow

The movement of money into (inflows) and out of (outflows) a business, project, or household over a specific period. Positive cash flow means more money is coming in than going out. Example: A company tracks monthly cash flow to ensure it can pay salaries and rent.

Channels of Distribution

The path a product takes from the producer or manufacturer to the end consumer, involving intermediaries like wholesalers, retailers, and distributors. Example: A soft drink travels from the manufacturer to a distributor, then to stores, and finally to consumers.

Charter

A formal document granting rights, privileges, or powers to a corporation, colony, city, or other defined group. It outlines the organization's purpose and governance. Example: A university operates under a state-issued charter that defines its authority.

Checking Account

A transactional bank account that allows for frequent deposits and withdrawals, typically used for everyday expenses. Funds are easily accessible via checks, debit cards, or ATMs. Example: You use your checking account to pay your phone bill.

Clientele

The body of customers or patrons of a particular business, professional person, or organization. It refers to the group of people who regularly use a service. Example: A hair salon has a loyal clientele that books appointments every month.

Close

In sales, the point at which a customer agrees to purchase a product or service, signifying the successful completion of the sales process. Example: A car dealer finalizes paperwork after the customer agrees on a price.

Close-ended Question

A question that can be answered with a limited range of responses, typically ‘yes’ or ‘no,’ or a specific piece of information. It restricts elaboration. Example: Asking 'Do you like coffee?' is a close-ended question.

Collateral

An asset pledged as security for a loan. If the borrower defaults, the lender has the right to seize and sell the collateral to recover the loan amount. Example: A car is used as collateral for an auto loan.

Compound Interest

Interest calculated on both the initial principal and also on the accumulated interest from previous periods. It allows your money to grow at an increasing rate. Example: A savings account earning compound interest increases faster than simple interest.

Consignment

An arrangement where goods are left in the possession of another party (the consignee) to sell, but the ownership remains with the original owner (the consignor) until sold. Example: A boutique sells handmade jewelry on consignment for local artists.

Consolidation

The process of combining multiple smaller shipments into a single, larger shipment to reduce transportation costs and improve efficiency. Example: A shipping company consolidates several small packages into one truckload for delivery.

Consumer

An individual or group that purchases goods or services for personal use, rather than for resale or production. Example: A customer buying groceries for home use is a consumer.

Consumer Buying Power

The ability of consumers to purchase goods and services, influenced by factors such as income, savings, credit availability, and price levels. Example: During inflation, consumer buying power decreases as prices rise.

Consumer Goods

Tangible items produced for direct use or consumption by individuals or households to satisfy their needs and wants. Example: Furniture, food, and clothing are examples of consumer goods.

Consumption

The utilization of goods and services by individuals or households to satisfy their needs and wants, leading to their depletion. Example: Drinking bottled water is an act of consumption.

Contractual Agreement

A legally binding agreement between two or more parties that creates mutual obligations enforceable by law, typically involving an offer, acceptance, and consideration. Example: A signed rental lease is a contractual agreement.

Credit Bureau

A company that collects credit information about individuals and businesses and compiles it into credit reports. These reports are used by lenders to assess creditworthiness. Example: Equifax is a major credit bureau.

Credit Limit

The maximum amount of credit a financial institution extends to a borrower on a credit card or line of credit. It represents the total amount available for borrowing. Example: A cardholder has a $5,000 credit limit on their Visa card.

Credit Rating

An evaluation of the creditworthiness of a borrower (individual, corporation, or government) based on their history of borrowing and repayment. Example: A person with a high credit rating is likely to qualify for lower-interest loans.

Credit Report

A detailed record of an individual’s credit history, including payment history, outstanding debts, and public records. It is used by lenders to assess risk. Example: Your credit report shows your loan balances and payment patterns.

Credit Score

A numerical representation of an individual's creditworthiness, calculated based on information in their credit report. It is used by lenders to determine loan eligibility and interest rates. Example: A credit score of 750 is considered excellent.

Debit Card

A payment card that allows the cardholder to make purchases by electronically transferring funds directly from their checking account to the merchant’s account. Example: Using your debit card to buy groceries at a store.

Decentralized Purchasing Structure

A purchasing system where buying decisions and authority are distributed across multiple departments, locations, or individuals within an organization. Example: Each branch of a retail chain independently orders supplies.

Decline Stage

The final stage in a product’s life cycle, characterized by decreasing sales, profits, and market share, often requiring strategic decisions about discontinuation. Example: DVD players are in the decline stage as streaming dominates.

Deductible

The amount of money an insured individual must pay out-of-pocket before their insurance coverage begins to pay for covered expenses. Example: You pay a $500 deductible before your car insurance covers accident repairs.

Democratic Leaders

Leaders who involve team members in the decision-making process, valuing input and collaboration to foster a sense of ownership and motivation. Example: A democratic leader asks the team to vote on a new marketing strategy.

Demographics

Statistical data relating to the population and particular groups within it. Common demographic factors include age, gender, income, education, and occupation. Example: Marketers analyze demographics to target specific age groups.

Demographic Segmentation

Dividing a market into segments based on easily identifiable characteristics such as age, gender, income, education, ethnicity, family size, and occupation. Example: A company targets young professionals with a new tech product through demographic segmentation.

Dependent

A person who relies on someone else for financial support, such as a child or elderly parent, and can be claimed as an exemption on tax returns. Example: Parents list their child as a dependent on their income tax return.

Direct Marketing

A marketing strategy that communicates directly with individual customers or prospects using channels like email, mail, phone, or text. Example: A clothing brand sends personalized emails with discount codes to subscribers.

Displays

Visual presentations of products or promotional materials designed to attract attention and encourage purchases, often found in retail stores. Example: A window display showcasing new clothing arrivals.

Disposable Income

The amount of income remaining after deduction of taxes and other mandatory charges, available to a household or individual for spending or saving. Example: After paying taxes, a worker uses disposable income to buy groceries and save for vacation.

Distribution

The process of making a product or service available for use or consumption by a consumer or business user, involving activities like transportation, storage, and sales. Example: A logistics company manages the distribution of online orders across regions.

Distribution Center

A warehouse or specialized building stocked with products to be redistributed to retailers, wholesalers, or directly to consumers, serving as a hub in the supply chain. Example: Amazon operates multiple distribution centers across the country.

Distribution System

The network of organizations and processes involved in moving goods and services from the manufacturer or producer to the end consumer. Example: A car company uses a distribution system of dealerships to sell vehicles nationwide.

Dividend

A payment made by a corporation to its shareholders, typically from the company’s profits, representing a portion of the company’s earnings. Example: A company declares a quarterly dividend of $1 per share.

Dollar Control

A method of inventory management that focuses on the total value of inventory held, aiming to maintain optimal investment levels and reduce excess stock. Example: A retail store uses dollar control to balance sales revenue with inventory costs.

Downward Communication

Information flowing from higher levels of an organization to lower levels, typically involving instructions, policies, feedback, and goals. Example: A CEO sends an email to employees explaining new company procedures.

Efficiency

The ability to accomplish a task with a minimum expenditure of time, effort, and resources; often measured as output per unit of input. Example: A factory increases efficiency by upgrading to automated machinery.

Elastic Demand

A situation where a change in price significantly affects the quantity demanded of a product or service; consumers are highly responsive to price changes. Example: Airline ticket demand is elastic—lower prices increase ticket sales.

Elasticity

A measure of responsiveness of one economic variable to a change in another; commonly used to describe how quantity demanded or supplied responds to changes in price. Example: Coffee demand shows elasticity when prices rise sharply.

E-Marketplaces

Digital platforms that connect buyers and sellers online, facilitating transactions for goods and services; examples include Amazon, eBay, and Alibaba. Example: A small business sells handmade crafts through an e-marketplace like Etsy.

Emergency Fund

A readily accessible savings account specifically designated to cover unexpected expenses, such as job loss, medical bills, or car repairs. Example: Financial advisors recommend keeping three to six months of expenses in an emergency fund.

Entrepreneur

An individual who creates a new business, bearing most of the risks and enjoying most of the rewards. Entrepreneurs identify a need and build solutions. Example: Elon Musk founded multiple companies to solve transportation and energy challenges.

Equilibrium Price

The market price where the quantity of goods supplied is equal to the quantity of goods demanded. At this price, there is neither a surplus nor shortage. Example: If apples sell for $2 per pound, both farmers and buyers agree on that equilibrium price.

Estate Planning

The process of arranging for the management and distribution of your assets after your death, including wills, trusts, and powers of attorney. Example: A person meets with a lawyer for estate planning to ensure their assets go to their children.

Ethical Standards

A set of moral principles and values that guide behavior and decision-making within an organization or profession, ensuring fairness and integrity. Example: Accountants follow ethical standards to maintain honesty and transparency in reporting.

Feature

A characteristic or attribute of a product or service, describing what it is or what it does. Features are factual aspects of the offering. Example: A smartphone feature is its 48MP camera.

Feature-Benefit Chart

A tool used in marketing and sales to connect the features of a product or service to the specific benefits they provide to the customer. Example: A car ad shows a feature-benefit chart linking ‘rear camera’ to the benefit of ‘easy parking.’

Feature-Benefit Selling

A sales technique where the salesperson emphasizes how a product’s features directly translate into benefits for the customer. Example: A laptop salesperson highlights how long battery life means more productivity for students.

Federal Communications Commission

An independent U.S. government agency that regulates interstate and international communications by radio, television, wire, satellite, and cable. Example: The FCC enforces laws to prevent unfair broadcasting practices.

FICO Score

A three-digit number, ranging from 300–850, that represents your creditworthiness based on your credit history, used by lenders to assess the likelihood of repayment. Example: A FICO score of 780 helps you qualify for low-interest loans.

Fidelity Bond

A type of insurance that protects a business from financial losses caused by dishonest acts of its employees, such as theft or embezzlement. Example: A company uses a fidelity bond to protect against employee fraud.

Finance Capital

Money used by businesses to fund their operations, investments, and growth; it can include debt financing (loans) and equity financing (selling shares). Example: A startup raises finance capital from investors to develop its first product.

Finance Charge

The total cost of credit, including interest, service fees, and other charges, expressed as a dollar amount. Example: The finance charge on a car loan includes interest and processing fees.

Financial Goals

Specific, measurable, achievable, relevant, and time-bound (SMART) objectives you set for your financial future, such as saving for retirement or paying off debt. Example: Setting a goal to save $5,000 in one year for an emergency fund.

Financial Literacy

The ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. Example: Financial literacy helps individuals make informed choices about credit and savings.

Financing

The process of providing funds for business activities, making purchases, or investing. It can include loans, bonds, equity, or retained earnings. Example: A company secures financing from a bank to expand operations.

Finished-Product Inventory

Goods that have completed the manufacturing process and are ready for sale to customers. It represents a company’s investment in sellable inventory. Example: A car dealership’s finished-product inventory includes all vehicles on display.

Fiscal Control

The management of a government’s revenues and expenditures to ensure efficient and effective use of public funds. It involves budgeting and cost control. Example: Fiscal control helps ensure taxpayer money is used properly for public projects.

Fiscal Policy

The use of government spending and taxation to influence the economy. It’s a tool used to stabilize the economy, promote growth, and control inflation. Example: The government lowers taxes to stimulate consumer spending during a recession.

Fixed Expenses

Recurring expenses that remain relatively constant from month to month, such as rent, mortgage payments, or loan installments. Example: Your monthly car payment is a fixed expense.

Flexible Expenses

Expenses that vary in amount from month to month and are often discretionary, such as groceries, entertainment, or transportation. Example: Dining out or buying movie tickets are flexible expenses.

Generic Products/Brand

Products that are not branded or trademarked and are typically sold at a lower price than brand-name equivalents. Example: A generic cereal brand costs less than Kellogg’s but offers similar ingredients.

Geographical Segmentation

Dividing a market into different geographical units, such as nations, states, or neighborhoods, and tailoring marketing efforts accordingly. Example: A clothing retailer promotes winter coats more heavily in northern regions.

Goods

Tangible items that satisfy human wants and provide utility; they can be seen, touched, and consumed. Example: Food, clothing, and electronics are types of goods.

Grade

A designation of the quality of a product, often based on established standards, helping consumers make informed purchasing decisions. Example: Meat is graded as A, AA, or AAA based on quality.

Gross Domestic Product (GDP)

The total monetary value of all goods and services produced within a country’s borders in a specific time period. Example: The GDP of Canada measures its annual economic output.

Gross National Product (GNP)

The total value of all finished goods and services produced by a country’s residents, regardless of where those residents are located. Example: The GNP of the U.S. includes profits earned by American companies abroad.

Gross Profit

The profit a company makes after deducting costs associated with making and selling its products. Example: A store earns $30,000 in revenue and $20,000 in costs, leaving $10,000 gross profit.

Growth Stage

The stage in a business’s life cycle characterized by rapid revenue growth, increasing market share, and often a need for significant investment. Example: A new app experiences a growth stage as downloads surge.

Guarantee

A formal assurance, typically written, that a product or service will meet certain standards or be repaired/replaced if it fails. Example: A TV comes with a one-year manufacturer’s guarantee.