| Sole Proprietorship | business owned by one person who operates it for his or her own profit. |
| Partnership | consists of two or more owners doing business together for profit. |
| Corporation | entity created by law. |
| Common Stock | the purest & most basic form of coporate ownership. |
| Dividend | Periodic distributions of cash to the stockholders of a firm. |
| Board of Directors | group elected by the firm’s stockholders responsible for approving goals and plans, corporate affaris, and expendiures. |
| Shareholders (stockholders) | owners of a coporation whose ownership takes the form of either common or perferred stock. |
| Treasure | Firm’s cheif fiancial manager who manges the firm’s cash,oversee’s it pensionplans, and manages key risk. |
| Controller | Firm’s cheif accoutant, who is responsible for firm’s accounting activites as tax management, financial & cost accounting. |
| Accrual Basis of Accounting | preparation of finacial statements recongizes revenue at the time of the sale & recongizes expenses when they are incurred. |
| Cash Basis of Accounting | Recongizes revenue & expenses only with respect to acutal inflows and outflows of cash. |
| Risk | Chance that actual outcomes may differ from those expected. |
| Risk Adverse | Requiring compensation to bear risk. |
| Financial Markets | Forums in which suppliers of funds and demanders of funds can transact business directly. |
| Financial Markets | Forums in which suppliers of funds and demanders of funds can transact business directly. |
| Common Stock | Purest & most basic form of corporate ownership. |
| Preferred Stock | Special form of ownership having a fixed periodic dividend that must be paid prior to payment or any dividend to common stock. |
| Corporate Bonds | Long term debt instrument indicating that a corporation has borrowed money and promises to repay it. |
| Capital Stock | Authorized shares, max number of shares authorized under the corporations terms. |
| GAAP | Practice & procedure guidelines used to prepare and maintain financial records and reports. |
| FASB | Accounting professions rule-setting body, which authorizes generally accepted accounting principles. |
| Balance Sheet | Summary statement of the firm’s financial position at a given point in time. |
| Income Statement | Provides a financial summary of the firm’s operating results during a specified period. |
| Current Assets | Short-term assets, expected to be convered to cash in less than a year. |
| Current Liabilties | Short-term liabilities expected to be paid within a year. |
| Long-term Liabilties | Liabilties with a future benefit over 1 year. example: notes payable |
| Statement of Retained Earnings | Reconcils the net-income of the year. And cash dividends paid, with the cahnge in retained earnings from Beg. and End. |
| Retained Earnings | Cumulative Total of all earnings net of dividends that have been retained & invested in the firm. |
| Paid-in-Capital | Amount of proceeds in excess. |
| Statement of Cash Flow | Provides a summary of the firms operating investments and finacing cash flow and reconcils the changes. |
| Ratio Analysis | Involves methods of calculating and inerpreting financial ratios to analyze and monitor the firm’s performance. |
| Current Ratio | Measures of liquidity calculated by dividing the firms current assets by its current liabilties. |
| Quick (Acid-Test) Raio | Measures of liquidity calculated by dividing the firms current assets minus inventory by its current liabilties. |
| Depreciation | Time period over which an asset is depreciated. |
| Pro-Forma Financial Statement | Projected ,or forecast, income statements and balance sheets. |
| Present Value | Current dollar value of a future amount. Then invested today at a given interest rate over a specified period to equal the future amount. |
| Ordinay Annuity | An annnity for which cash flows occurs at the end of each period. |
| Perpetuity | An annuity wtih ininite life, providing continus annual cash flows. |
| Future Value | The value at a given future date of an amount placed on a deposittoday and earning interest at a specified rate. Apply compound interest over a specified period of time. |
