Business Module 4 study guide

Accountant

An individual who has had specialized training in accounting procedures

Accounting

The process of keeping financial records

Accounting cycle

A process or series of steps that businesses complete to maintain their financial records effectively

Accounting standards

Rules that accountants must follow when preparing financial statements

Acquisition of funds

Finance activity involving making decisions about financing

Administration of assets

Finance activity involving making decisions about a firm’s investments

Assets

Anything of value that a business owns

Balance sheet

A financial statement that captures the financial condition of the business at that particular moment

Capital investment decisions

Decisions that determine which projects a business will invest in, how the investment(s) will be financed, and whether to pay dividends to shareholders

Cash flow statement

A financial summary with estimates as to when, where, and how much money will flow into and out of a business

Dividends

A sum of money paid to an investor or stockholder as earnings on an investment

Expenses

The monies that a business spends; also called expenditures

Finance

In business, the function that involves all money and money management matters

Financial statement

A summary of accounting information

Income

Money received by a business or an individual from outside sources

Income statement

A financial summary that shows how much money the business has made or has lost; also called the profit-and-loss statement

Liabilities

Debts that the business owes

Net worth

The total value of the business

Owner’s equity

The amount an owner has invested in the business plus or minus profits and losses

Bottom line

A business’s net income; the decisive point

Holding cost

The money it takes to keep inventory in stock

Inputs

Resources

Inventory

All the stock that a business has on hand

Inventory control

Tracking the amount, the kind, and the value of inventory that a business has on hand

Logistics

Refers to managing the flow of goods and services from production to consumption

Operations

The day-to-day activities for continued business functioning

Outputs

In the operations function, goods, or services

Purchasing

The buying of goods and services for a business

Quality control

Ensuring the degree of excellence of a good or service

Routing

The production activity that determines the sequence of the steps in the production process

Scheduling

The production activity that establishes the timetable to be followed in production

Timing

In the production process, determining when materials will arrive at a certain destination and how long they will stay there

Advertising

Any paid form of nonpersonal presentation of ideas, goods, or services

Marketing

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Personal selling

The form of promotion that determines client needs and wants and responds through planned, personalized communication that influences purchase decisions and enhances future business opportunities

Place

Marketing element focusing on considerations in getting a selected product in the right place at the right time

Price

Marketing element requiring marketers to determine the amount of money they will ask in exchange for their products

Product

Marketing element referring to what goods, services, or ideas a business will offer its customers

Promotion

A marketing function needed to communicate information about goods, services, images, and/or ideas to achieve a desired outcome

Publicity

Any nonpersonal presentation of ideas, goods, or services that is not paid for by the company or individual that benefits from or is harmed by it