Advertising and Financial Statements Flashcards

Advertising and Financial Statements Flashcards

Advertising is __

A means of communication with the users of a product or service.

Advertising has three primary objectives: __

To inform, to persuade, and to remind.

Advertising campaign is__

A time-limited set of ads - campaigns may run across different media, and for one month or ten years, but can be categorized together as they are the execution of a central idea

Product Placement is__

The practice of paying for a branded product to be used by a character in a movie

Product Positioning is__

Establishing the market niche of a product - which may not be as the brand leader - and advertising to the appropriate segment of the audience

Loss leader is__

A popular product sold with no profit, in order to attract customers to a store

Redeemable coupon is__

A certificate offering consumers a price reduction on a particular product

Purchasing cycle is__

The average length of time between a consumer's repeat purchases of the same product

Point-of-sale advertising is__

Advertising is done at the place where a product is sold.

Market expansion refers to __

The main objective that a manufacturer or a company achieves through advertising is market expansion.

Increases revenue refers to __

One of the significant positive characteristics of advertising is that it can lead to an increase in sales and revenue.

Increases competition refers to __

In today’s world of cut-throat competition, advertising is a well-tested method of staying ahead of competitors.

Builds consumer trust refers to __

When any manufacturer or company advertises their product, cause, or service, they ask customers to impose their faith in the company.

Build salesmanship refers to __

Advertising is one of the best methods to promote and build salesmanship.

Never Guarantees Sale refers to __

advertising is a way of promoting new products and services in the market, but it does not guarantee an increase in sales or the creation of a new customer base.

Can Lead to Negative Publicity refers to __

Advertising can make a negative impact on consumers. If a product ends up looking similar in design or specifications to rival products, this only adds confusion in the minds of consumers, which hurts both companies and the product.

Increases the Cost of Marketing refers to __

Companies and manufacturers invest much of their revenues and profits in advertising.

Creates Monopoly refers to __

Companies with considerable brand value and unlimited resources spend billions and billions of dollars on advertising, while companies with limited and restrictive resources end up with losses.

Distortion of Facts refers to __

Companies often sell their products and services by misrepresenting and distorting the facts.

Deposit is__

To place money in a bank; or money placed in a bank

Liquidity is__

Available cash, and how easily other assets can be turned into cash

Collateral is__

Anything that acts as a security or guarantee for a loan

A mortgage is__

A type of loan used to purchase or maintain a home, land, or other types of real estate.

Overdraft is__

Something that occurs when you make a purchase with your debit card or write a check for an amount that exceeds your checking account’s available balance.

A current account is__

An account at a bank against which checks can be drawn by the account depositor; a checking account

A savings account is__

A deposit account that generally earns higher interest than an interest-bearing checking account.

A deposit account is__

A bank account maintained by a financial institution in which a customer can deposit and withdraw money.

Solvency is__

When banks have enough money to cover potential losses.

Maturity date is__

This is the date of expiration for the contractual obligation of a financial instrument.

Financial intermediary is__

An institution that specializes in bringing lenders and borrowers together.

Clearing system is__

A set of arrangements in which debts between banks are settled by adding up all the transactions in a given period and paying only the net amounts needed to balance inter–bank accounts.

Trading account is__

Shows how gross profit (or loss) has been made from the trading activities of the business.

Profit or loss account is__

Calculates three profit figures: profit from operations (or operating profit); profit before tax; profit for the year

Appropriation account is__

Shows how the profit for the year is distributed between the owners, in the form of dividends to company shareholders and as retained earnings.

Revenue is__

Revenue is the amount a company receives from selling goods and/or providing services to its customers and clients.

Gross profit is__

Gross profit is net sales minus the cost of goods sold.

Net profit is__

The profit made by a business after all costs have been deducted from sales revenue.

Overheads/expenses are__

Overhead costs are expenses of the business that are not directly related to the number of items made or sold.

Operating profit is__

The total income of a company for a given period after paying all related operating expenses and before taking into account interest, taxes, and other non-operating items.

Operating income is__

The amount of revenue left after deducting the operational direct and indirect costs from sales revenue.

Operating expenses are__

Are the ongoing costs of running the business and may include items such as rent, employee payroll, depreciation, inventory costs, and marketing expenses.

Retained earnings is__

RE are the accumulated portion of a business’s profits that are not distributed as dividends to shareholders but instead are reserved for reinvestment back into the business.

COGS is__

Cost of goods sold is the cost of producing or buying in the goods actually sold by the business during a time period.

Depreciation is__

The fall in the value of a fixed asset over time.

Amortization is__

The process of incrementally charging the cost of an intangible asset to expense over its expected period of use, which shifts the asset from the balance sheet to the income statement.

Accrued expense is__

An accounting term that refers to an expense that is recognized on the books before it has been paid.

Prepaid expense is__

Represent goods or services paid for upfront where the company expects to use the benefit within 12 months.

Assets are__

Are those items of value which are owned by the business,; they may be fixed (non-current) or short-term current assets.

Non-current assets is__

Land, buildings, equipment and vehicles are non-current assets and owned by the business for more than one year.

Current assets are__

Cash, inventories (stocks) and accounts receivables (debtor customers who owe money to the business) are only held for short periods of time and are called current assets.

Liabilities are__

Are debts owned by the business.

Non-current liabilities are__

Are long-term debts owned by the business which do not have to be repaid within one year.

Current liabilities are__

Are short-term debts owned by the business which must be repaid within one year, for example overdraft and accounts payable