ESB Exam Study Guide with Complete Solutions!!

Acquisition Cost - ANSWER-the cost of obtaining data that you don't have Contingency costs - ANSWER-amount of money included to cover potential events that are not specifically accounted for in a cost estimate Variable Cost - ANSWER-a cost that rises or falls depending on how much is produced fixed costs - ANSWER-costs that do not vary with production or sales level pro forma - ANSWER-financial statement Small Business Administration (SBA) - ANSWER-government agency that helps small business owners develop business plans and obtain financing Limited Liability Company (LLC) - ANSWER-a form of business ownership that offers both limited liability to its owners and flexible tax treatment S cooperation - ANSWER-a small business entity that is created under state laws liquid assets - ANSWER-cash and items that can be quickly converted to cash Assets - ANSWER-resources owned by a business dividend - ANSWER-The portion of corporate profits paid out to stockholders liability - ANSWER-An amount owed by a business Net Income - ANSWER-the difference between total revenue and total expenses when total revenue is greater shareholder - ANSWER-Individual who owns part of a corporation account payable - ANSWER-money owed for products and services purchased on credit Accounts Receivable - ANSWER-Amounts to be received in the future due to the sale of goods or services Angel Investors - ANSWER-individuals who invest in start-up companies with high growth potential in exchange for a share of ownership Bonds - ANSWER-Certificates of debt that carry a promise to buy back the bonds at a higher price Capital/Equity - ANSWER-Funds contributed by investors to a business. capital expenditures - ANSWER-Expenditures on equipment the business will use for many years. equity capital - ANSWER-money that a business gets from its owners in order to operate fiscal year - ANSWER-A fiscal period consisting of 12 consecutive months. Crowdfunding - ANSWER-using social networking to appeal to potential investors Guarantor - ANSWER-a person who agrees to pay a debt if the primary debtor does not Income Statement Equation - ANSWER-Revenues - Expenses = Net Income Income Statement - ANSWER-A financial statement showing the revenue and expenses for a fiscal period Current Ratio - ANSWER-current assets divided by current liabilities Accounting Equation - ANSWER-Assets = Liabilities + Owner's Equity retained earnings - ANSWER-the amount of net income retained in the corporation