BHS 2016 Sample Finance Exam

Acreage (BL:001)

An area of land

Duty of Care (BL:069)

Basic principle that expects all individuals and businesses to exhibit social responsible behavior by using caution to prevent harm and by watching out for one another

Tort (BL:069)

A private wrongdoing that potentially harms another person or entity

Taxation of Roth IRAs (BL:134)

Contributions paid into Roth IRAs are taxed, withdrawals during retirement are tax-free

Transmittal Letter (CO:133)

Should always accompany important business papers (such as contracts) sent by mail. Lets recipient know exactly whats in the package and if they need to take action

Acknowledgement Letter to Vendors (CO:133)

Acknowledges the receipt of business papers

Claim Letter to Vendors (CO:133)

Requests a solution to a problem

Request Letter to Vendors (CO:133)

Asks vendors for information

Grapevine (CO:014)

Oral communication method in which information is passed around the company but not formally announced or verified

Matrix Organizational Structure (EC:103)

Combination of functional structure and divisional structure. Includes traditional departments but also broken down by division. (New. Ish)

Tentative Agreement (EC:015)

Stage which union and management have agreed on the terms of a contract but still need union members to aprove or reject the contract.

Something an economy with High Unemployment Level has (EC:082)

Lower rate of inflation (less money in circulation, less inflation)

Coaching’s Important Aspect (EI:041)

Listening so they understand what the other person is saying.

Prompt Payment Act (FI:063)

When the U.S federal government owes money to a contracted employee or business, they must pay.

Financial Planning Pro (FI:065)

Good way to realize what it takes to get the things you want

Deposit-Taking Financial Institutions (FI:336)

Credit Unions, Savings and Loan Associations, and Commercial Banks

Securities in Capital Markets (FI:337)

Capital Markets buy and sell long-term securities, including corporate bonds, common and preffered stock, and treasury bonds.

Economic Indicators for the Stock Market (FI:574)

GDP, unemployment, and inflation

Derivatives (FI:575)

Financial instruments whose value depends on the value of other financial instruments. Used to hedge (reduce potential losses) the risk of investing in the FOREX market

Total Liabilities (FI:093)

Debts the business owes: accts. payable, salaries, taxes, and long-term notes (mortgages).

Not included in Total Liabilities (FI:093)

Does not include cash, machinery, or equipment

Cost Allocation (FI:663)

Assignment of costs to cost objects (project, dept., customer)

Debt Financing (FI:340)

Where businesses borrow money to fund their operations

Vertical Analysis (FI:334)

Calculate each item on an financial statement as a percentage of the total. Develops common size statements to compare across companies

Horizontal/Trend Analysis (FI:334)

Analyzing dollar amounts on financial statements for a company across several years

Ratio Analysis (FI;334)

The calculation of ratios based on a company’s financial data. Compars numbers within a financial statement and determine relationships among numbers on diff. financial statements + performance of mult. companies

Balance Sheet Equation (FI:335)

Assets = Liabilities + Owner’s Equity

Importance of Controlling Costs (OP:015)

Purchasing controls costs, which lets businesses lower selling prices

Self-esteem (PD:013)

The regard or respect you have for yourself. Understanding and liking yourself