| A | B |
|---|
| Collateral | property that a borrower forfeits to the bank providing the loan if he or she defaults on the loan |
| Debt capital | money loaned to a business with the understanding that the money will be repaid |
| Debt to equity ratio | the relation between the dollars borrowed (debt) and the dollars invested in a business (equity) |
| Equity capital | money invested in a business in return for a share in the profits of the business |
| Net worth | difference between what is owned |
| Venture capitalists | individuals or companies that make a profit investing in startup companies |
| Assets | property owned by a person or company |
| Liability | a thing for which someone is responsible |
| Line of credit | greement by bank to lend up to a certain amount with interest |
| Balance sheet | a financial statement that lists what a business owns |
| Cash flow statement | an accounting report that describes the way cash flows into and out of a business over a period of time |
| Income statement | a financial statement that shows the business’s revenues and expenses incurred over a period of time and the resulting profit or loss |
| Depreciation | an asset’s value lowers to reflect its current worth |
| Account receivable | are assets; they are amounts due from customers who have purchased goods or services on credit |
| Accounts payable | are liabilities; they are amounts the business owes to suppliers. |
| Current liabilities | are debts that are due to be paid in full in less than a year |
| Long term liabilities | debts that are payable over a year or longer |
| Current assets/liquid assets | can be converted to cash easily and items that are used up in normal business operations |
| Fixed assets/illiquid assets | cannot be converted into cash easily and are things that will be used for many years by the business |
| Account | an accounting record that provides financial detail for a particular business item |
| Accrual method | an accounting method in which transactions are recorded when the order is placed |
| Cash method | an accounting method in which revenue is not recorded until cash (or a check) is actually received and expenses are not recorded until they are actually paid |
| Check register | booklet in which an account holder records the dates and amounts of the checks as well as the names of people or businesses to whom he or she has written the checks |
| Journals | accounting records of the transactions you make; there are five different journals that businesses use to record their transactions: sales |
| Payroll | list of people who receive salary or wage payments from a business |
| Transaction | any business activity that changes assets |
