Professional Practice Quiz 1

Front 1

entrepreneur

Back 1

someone who is willing to take a risk by starting and managing his or her own business

Front 2

sole practicioner

Back 2

individuals who start their own business and work alone

Front 3

independent interior design practice

Back 3

firm is free to specify any type of product for the projects they are engaged to design

Front 4

residential retail stores

Back 4

selling goods to the client might increase the service to the point of having a retail store while maintaining interior design services

Front 5

office furnishings dealer

Back 5

sell furniture and design services to augment sales and assist the client. Dealer means that the company has special buying power with one or more manufacturer

Front 6

architectural firms

Back 6

designers work on the projects obtained by the firm, though they may obtain projects independent of the architectural firm

Front 7

attorney

Back 7

provides legal advice and counsel to business owners and individuals

Front 8

bookkeeping

Back 8

means for an owner to keep track of income and expenses

Front 9

bookkeeper

Back 9

an individual who can do the various day to day posting, calculating, and verifying of financial records of the firm

Front 10

certified public accountant (CPA)

Back 10

an individual who has met educational and testing requirements established by the jurisdiction

Front 11

professional tax preparer

Back 11

training and experience to interpret tax laws in relationship to the owner's actual business operations

Front 12

banker

Back 12

provides service and counsel to new business owners

Front 13

debt capital

Back 13

funds that come from creditors as loans

Front 14

collateral

Back 14

an asset pledged to repay a loan

Front 15

long term loans

Back 15

more than one year and are usually granted to purchase capital items like home office equipment and delivery trucks, or an office location

Front 16

short term loans

Back 16

last for one year or less

Front 17

line of credit

Back 17

a type of short term loan which helps cover purchasing inventory and credit purchases from suppliers

Front 18

unsecure loans

Back 18

collateral is not required

Front 19

secured loans

Back 19

as protection against nonpayment, collateral is required

Front 20

equity capital

Back 20

funds obtained by investors

Front 21

venture capital

Back 21

equity capital funds that come from investors

Front 22

angel investor

Back 22

entrepreneurs that invest small amounts of money

Front 23

affiliated angel investor

Back 23

knows the small business owner, but is not related (i.e. neighbor)

Front 24

nonaffiliated angel investor

Back 24

someone that does not know the small business owner

Front 25

pro forma credit

Back 25

pay full price of the goods in advance of the shipment

Front 26

trade credit

Back 26

suppliers extend 30, 60, or 90 days of credit without charging interest

Front 27

independent insurance agent

Back 27

works for himself and can represent more than one insurance company

Front 28

exclusive agent

Back 28

works for a particular company and only writes policies from that one company

Front 29

broker

Back 29

multiple company representative and writes for commercial insurance, not personal

Front 30

malpractice insurance/professional liability insurance

Back 30

protects the professional in the event an event causes acts, errors, or omissions in the course of working on the project

Front 31

errors and omissions coverage (E&O)

Back 31

provides protection should the designer or her employees make a mistake which would be an error or forget to do something that was required which is considered an omission

Front 32

business owner's policy

Back 32

a package that includes various levels of property damage, liability, and personal injury insurance and often includes business interruption insurance

Front 33

property damage insurance

Back 33

protects the building and its contents from loss due to fire, theft, windstorms, lightning strikes, and other types of loss detailed in the policy

Front 34

liability insurance

Back 34

protects the business should the business be sued by a third party for injury or property damage due to negligence, product failure, or other claims of that kind

Front 35

product liability insurance

Back 35

covers injuries caused by products that are designed, sold, or specified by the interior designer

Front 36

personal injury insurance

Back 36

part of liability insurance and provides insurance in case of slander, libel, defamation, false arrest, and other personal injury torts

Front 37

workers compensation insurance

Back 37

insurance provided to protect the employee in case of work related injuries whether the injury happens in the office or on the job site

Front 38

business income insurance

Back 38

pays for the loss of net profit and for operating expenses in case a fire or other specifically covered event prevents the business from operating

Front 39

crime insurance

Back 39

protects the firm in case of theft of money or property

Front 40

disability income insurance

Back 40

provides continuing income if certain covered injuries or illnesses occur that prevent the business owner from working

Front 41

income statement

Back 41

an accounting report that formally reports all the revenues and expenses of a firm for a stated period of time. the result shows the net income (or loss) for the firm during the period; also called a profit and loss statement

Front 42

operating funds

Back 42

funds needed to keep the doors to the firm open and in business

Front 43

revenue

Back 43

the amount of inflows from the sale of goods or rendering of services during an accounting period

Front 44

expenses

Back 44

the amount of outflows of resources of a firm as a consequence of efforts made by the firm to earn revenues

Front 45

balance sheet

Back 45

an accounting form that shows the financial position of a firm at a particular moment in time, including a statement of its assets and liabilities, sometimes called a statement of financial position

Front 46

accounts

Back 46

financial entries with different names for clarification to show additions (increase) and subtractions (decreases) to the account

Front 47

sole proprietorship

Back 47

simplest and least expensive: all that is needed is an established location, licenses, and begin operation

Front 48

partnership

Back 48

when two or more individuals agree to start a business

Front 49

general partnership

Back 49

when two or more people join in for the purpose of forming a business and these people alone share in the profits and risks of the business

Front 50

limited partnership

Back 50

a business formation created according to statutory requirements. A limited partnership is formed with at least one general partner and one or more partners who are designated as limited partners

Front 51

limited liability corporation (LLC)

Back 51

a hybrid of the general partnership or sole proprietorship and the corporation

Front 52

members

Back 52

owner of the LLC's term. Those who manage the LLC are called managers

Front 53

corporation

Back 53

(C corporation) is an association of individuals created by statutory requirements and such it is a legal entity. Exists independently of its originators or any other person connected directly with the firm

Front 54

S corporation

Back 54

a special form of corporation that utilizes many of the benefits of a corporation but does not pay taxes as a corporation

Front 55

professional corporation

Back 55

a corporation formed by persons in professions such as law, medicine, dentistry, accounting, engineering, or architecture

Front 56

joint venture

Back 56

when two or more persons or firms agree on a temporary basis to share in the responsibilities, losses, and profits of a particular project or business venture

Front 57

incorporate

Back 57

to create a corporation

Front 58

incorporation

Back 58

the act or process of forming a corporation

Front 59

private/general corporation

Back 59

the most common type of corporation formed for private, profit-making interests

Front 60

public corporation

Back 60

those formed by some government agency for the benefit of the public. The US Postal Service is an example

Front 61

close corporation

Back 61

a corporation whose shares of stock are commonly held by only a few individuals. The stock is not traded on any of the public stock markets; also called family corporation or closely held corporation

Front 62

domestic corporation

Back 62

a corporation formed in one state and doing business only in the state. Domestic corporations are also corporations formed within the United States

Front 63

foreign corporation

Back 63

a corporation formed in one state but doing business in another state