DECA Business Management and Administration Terms Questions and Answers ( Graded A+)

DECA Business Management and Administration Terms Questions and Answers ( Graded A+) Annual Receipts - ANS- "Receipts" means total income (or in the case of a sole proprietorship, "gross income") plus "cost of goods sold" as these terms are defined and reported on Internal Revenue Service tax return forms. Business Plan - ANS- A written outline that evaluates all aspects of your business. Business Profile - ANS- A type of definition that summarizes the important characteristics of the business and helps to identify areas for improvement. Calendar Tax Year - ANS- 12 consecutive months beginning January 1 and ending December 31. Fiscal Tax Year - ANS- 12 consecutive months ending on the last day of any month other than December, or a 52-53 week year. Capital - ANS- The funds and assets invested in a business by the owners Cash Basis of Accounting - ANS- Method of accounting in which you recognize income when you receive the cash and expense when you receive the bill Accrual Basis of Accounting - ANS- Method of accounting in which you match revenue with expense regardless of when the cash may or may not be collected Cash Flow Control - ANS- A simple method of projecting your future needs for cash Commodity Business - ANS- A business for which you must have the lowest cost to survive Contract - ANS- A mutually binding legal relationship obligating the sell to furnish supplies or services and the buyer to pay for them Corporation - ANS- A group of persons granted a state charter legally recognizing them as a separate entity having its own rights, privileges, and liabilities distinct from those of its members Credit Rating - ANS- A grade assigned to a business concern to denote the net worth and credit standing to which the concern is entitled in the opinion of the rating agency as a result of its investigation. Debt Financing - ANS- The provision of long term loans to small business concerns in exchange for debt securities or a note. Demographics - ANS- The statistical data of a population, especially those showing average age, income, education, etc. Due Dilligence - ANS- The overall process of evaluating a business opportunity including examination of financial records Earning Power - ANS- The demonstrated ability of a business to earn a profit, over time, while following good accounting practices. Emerging Small Business - ANS- A small business concern whose size is no greater than 50 percent of the numerical size standard applicable to the Standard Industrial Classification code assigned to a contracting opportunity. Employer Identification Number (EIN) - ANS- Used to identify the tax accounts of employers, sole proprietors, corporations, partnerships, and other entities. Employment Taxes - ANS- Federal income tax withholding, social security and Medicare taxes, and federal unemployment tax. Entrepreneur - ANS- One who organizes, operates and assumes the risk in a business Equity - ANS- An ownership interest in a business Equity Financing - ANS- The provision of funds for capital or operating expenses in exchange for capital stock, stock purchase warrants, and options in the business financed, without any guaranteed return, but with the opportunity to share in the company's profits. Equity Partnership - ANS- A limited partnership arrangement for providing start-up and seed capital to businesses. Escrow Accounts - ANS- Escrow Accounts Funds placed in trust with a third party, by a borrower for a specific purpose and to be delivered to the borrower only upon the fulfillment of certain conditions. Estimated Tax - ANS- Regular, estimated payments on income during the year. Foreclosure - ANS- The act by the mortgagee or trustee upon default, in the payment of interest or principal of a mortgage of enforcing payment of the debt by selling the underlying security. Franchising - ANS- A continuing relationship in which the franchiser provides a licensed privilege to the franchisee to do business, and offers assistance in organizing, training, merchandising, marketing and managing in return for a consideration. Hazard Insurance - ANS- Insurance required showing lender as loss payee covering certain risks on real and personal property used for securing loans. HR Department - ANS- Human Resources Department including payroll functions and training. Independent Contractor - ANS- Someone who it self-employed Innovation - ANS- Introduction of a new idea into the marketplace in the form of a new product or service, or an improvement in organization or process. IPO - ANS- Initial Public Offering (the first public issuance of stock in a company.) Job Description - ANS- A written statement listing the elements of a particular job or occupation, e.g., purpose, duties, equipment used, qualifications, training, physical and mental demands, working conditions, etc. Joint Venture - ANS- The cooperation of two or more individuals or enterprises in a specific business enterprise, rather than in a continuing relationship as in a partnership. Just-In-Time - ANS- The controlling of inventory so that materials are delivered just in time for assembly or manufacture. Limited Partnership (LP) - ANS- An association of two or more partners formed to conduct a business jointly and in which one or more of the partners is liable only to the extent of the amount of money they have invested. Line-of-credit - ANS- A lender agrees to allow a borrower to draw a pre-specified amount from an account on an as needed basis.