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| free enterprise system | an economic system in which people can choose what they buy, what they produce and sell, and where they work. |
| profit | amoun of money earned over and above the amount spent to keep the business operating. |
| business plan | written proposal that describes a new business and strategies to launch that business. |
| strategic plan | writeen outline of the business goals and the steps to take and acheive them. |
| marketing plan | written outline of how the business will be promoted to increase customers and sales. |
| financial plan | written outline of how the business will get money to start up and operate, and how the business will maintain financial operations and business records. |
| accounting | systematic process of recording and reporting the financial position of a business. |
| transaction | any activity that has an effect on the financial situation of a business. |
| generally accepted accounting principles (GAAP) | standard set of guidelines for recording and reporting financial changes in a business. |
| budget | fromal, written statement of expected income and expenses for a future period of time. |
| merchandise | goods retailers buy with the intent to resell to customers. |
| inventory | merchandise retailers have for sale. |
| cash flow | amount of cash that is available at any given time. |
| negative cash flow | when a businness spends more money than it receives. |
| capital | the money you will need to establish a business, operate it for the first few months, and expand it once it stabilizes. |
| start-up capital | money required to start your business. |
| start-up costs | costs or fees involved in establishing your business. |
| operating capital | amount of capital needed to operate a business for the first few months or years. |
| financial forecasting | the process of estimating a business's operating capital. |
| projected financial statements | statements that predice the financial position of a business in the onths and years to come. |
| fixed expenses | expenses that remain the same regardless of business activity. |
| variable expenses | expenses that may change. |
| reserve capital | money that is set aside for unexpected costs or oppurtunitites. |
| chart of accounts | list of all the general ledger accounts that a business will use. |
