| A | B |
|---|
| Entrepreneurs | people who have ideas, develop plans and take action to pursue moneymaking opportunities |
| Sole proprietorship | when the same person is both the owner and a worker |
| Partnership | two or three people owning and operating a business |
| Corporation | when a number of people own and operate a business under a state issued license or charter |
| Franchise | a legal contract with an established well recognized company |
| Target market | the group of consumers who would most likely purchase certain goods or services |
| Investors | people who put money into an enterprise in the hopes of getting a profit in return |
| Start-up period | when a business is beginning |
| Working capital | money required to meet the ongoing expenses of a business |
| Balance sheet | summary of assets, liabilities, and net worth |
| Assets | what a business owns |
| Liabilities | what a business owes |
| Net Worth | the difference between assets and liabilities |
| General ledger | the principal book of accounts containing the final entries of assets and liabilities |
| Profit-and-loss statement | detailed, month-by-month record of income obtained from sales and expenses incurred to produce sales |
| Cash Flow | the amount of money available in a business at a specific time |
| Sound Financial Management | getting the most for your money through planned control of your earnings, savings, and spending |
| Gross earnings | total earnings before deductions |
| Deductions | items subtracted form your earnings such as taxes, insurance, pension, and other miscellaneous items |
| Net Pay | the amount of money you receive after subtracting your deductions |
| Endorsement | the signature of the payee on the back of a check |
| Direct Deposit | When an employee deposits your net pay directly into your bank account |
| Salary | when the employer pays a fixed sum of money to a worker every year |
| Wages | The employer pays a worker a fixed amount of earnings per hour, day or week. |
| Piecework | the employer pays a worker according to the amount the worker produces |
| Commission | The employer pays a sales person a certain percentage of his or her sales |
| Overtime pay | The employer pays a specified rate for work performed beyond regular hours |
| Check | an order written by a depositor directing the bank to pay out money |
| Bank statement | a bank report that shows the status of the depositor’s account |
| Canceled check | a check that has been paid by the bank |
| Check register | a place where you record the checks you write |
| Deposit slip | provides a record of the money put into an account |
| Bounced Check | a check that is written with insufficient funds in your account |
| Savings Account | a bank account that pays interest to customers in return |
| Interest | the amount lenders pay the use of a customer’s money |
| Compound interest | pays interest on interest on a daily basis |
| Certificate of Deposit | a special type of deposit account with a bank or other financial institution that typically offers a higher rate of return of interest than a regular savings account |
| Closed-ended credit | a one-time loan made for the purchase of a costly item such as a car or major appliance |
| Open-ended credit | a loan made on a continuous basis for the purchase of products up to a specific dollar limit. |
| Creditors | people who lend money |
| Credit history | a record of how you’ve borrowed and repaid debts |
| Budget | a plan for saving and spending income |
| Fixed Expenses | bills that usually remain the same each month |
| Flexible expenses | bills that change form one month to the next |
