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33 Cards in this Set
- Front
- Back
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What are the 4 types of business? |
- Sole proprietorship - Partnership - Corporation - Limited liability company |
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What is a sole proprietorship and who is liable? |
Owned by one, sole business owner who is completely liable for the organisation. Hard to transfer ownership and build capital. |
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What is a general limited partnership and who is liable? |
Owned by two or more individuals who both share decisions and liability. |
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What is a limited partnership and how is it different from a general partnership? |
In a limited partnership partners are limited to the amount they invested in the business, although one partner must ultimately accept "general partnership" and be completely liable. general partnerships spread liability equally. |
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What is a corporation and who is liable? |
A corporation is a separate legal entity. |
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What is the difference between a corporation , "S" corporation and professional corporations? |
"S" corporation receive less tax, but are limited to 75 shareholders. Professional corporations are Doctors, Lawyers, Accountants etc. |
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What is a limited liability company and who is liable? |
Like limited partnership but with no general partner. The cost of forming is the same as corporations. |
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What are the 4 things you can protect intellectual property through? |
1. Patents 2. Trademarks 3. Trade secrets 4. Copyrights |
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What does a patent protect? |
Design, utility, business methods, plants |
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What do trade secrets protect and how do you ensure this? What makes them hard? |
They protect ways of doing business, customer lists. Usually in the form of a non-disclosure form or clause in company contract. |
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What are the 4 "types" of trademark? |
1. Trademark (logos) 2. Service mark (redcross) 3. Certification marks (quality) 4. Collective marks (membership) |
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What is accrual accounting? |
Recording activity as it is recognised rather than when it happens. E.g. Noting sales before the money is handed over. |
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What is a balance sheet and what is balanced? |
A snapshot of an organisations financial position. Assets vs. Liabilities and owner equity |
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How are balance sheet assets ordered? |
In order of liquidity |
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What is a current asset? |
An asset that can be converted to cash in under a year |
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What are the 4 types of current assets on a balance sheet? |
Cash Marketable securities Receivables Inventory |
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What are receivables? |
Credit sales made |
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What are Inventories? |
Products hoping to be sold |
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What are Marketable securities? |
Short term, highly liquid assets |
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What is the time periods of fixed assets and name 4? |
Fixed assets are likely to not be sold in the next year and above They are: 1. Equipment/buildings 2. Depreciation 3. Accumulate depreciation 4. "Other" = rights |
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Name the 4 types of current liabilities |
Payables, Accrued wages, Bank loan, "Other" |
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Name the 3 types of long term liabilities |
1. capital lease = cost of equipment lease 2. Operating lease = provide maintenance in addition to finance 3. Owners equity = money contributed by owner |
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What are retained earnings? |
Profits retained by the business as a result of operations |
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What does an income statement track? |
change to the value of expenses/revenues over a given period |
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What is the cost of goods sold? |
The cost of labour/materials to produce a product |
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What are gross earnings |
net sales - the cost of production |
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What does the statement of cashflow show? |
How money flows in and out of an organisation at a given time. How changes in the balance sheet and income statement impact cash. |
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What does survival bottom line show? |
A ventures liquid resource |
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What are variable expenses |
Those that correlate directly with revenue |
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What are fixed expenses |
Expenses that don't change regardless of revenue |
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How to work out survival revenue? |
VCRR = Variable cost / revenue CFC = SR - VC SR = VC + CFC SR = CFC/(1-VCRR) |
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What is NOT included when working out cash fixed costs? |
Depreciation |
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Cool? |
cool. |
