Bluff Day 41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

24 25 26 27 28 29 30

31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68

This balance indicates the value of the owner’s investment (or share of the

business) at the beginning of the statement period. The ending capital balance of a

previous statement of changes in owner’s equity becomes the beginning capital

balance on the subsequent statement of

changes in owner’s equity.

beginning capital balance

This balance indicates the value of the owner’s investment (or share of the

business) at the end of the statement period. This amount needs to be compared with the

owner’s equity balance on the balance sheet.

ending capital balance

A statement that portrays the assets the owner invested (contributed or put in), how much he

withdrew (took out), and how much net income the company generated during a certain statement

period. It represents how the value of the owner’s share of the business increased or decreased for a

period of time.

statement of changes in owner’s equity (SCOE)

Assets expected to be used up within the business’s fiscal year.

current assets

Liabilities expected to be paid within the business’s fiscal year. Includes the current portion of

long-term liabilities.

current liabilities

Current assets ÷ current liabilitiesA liquidity ratio used usually to

analyze unhealthy companies. It is an indication as to whether a

company is able to meet its short-term obligations.

current ratio

Liabilities expected to be paid after the fiscal year.

long-term liabilities

Current assets – current liabilitiesAn indication of liquidity that shows how

much of a cushion there is to pay short-term bills. In case all the expected income doesn’t

materialize, there need to be some short-term assets available to cover the short-term

liabilities.

working capital

A person (or company) who lends money or capital with the intent of

being repaid with interest.

creditor

A stakeholder who has a vested interest in the business, including

managers, investors, and creditors.

decision maker

A person (or company) who becomes part owner by investing money or capital with the intent of

earning a return on the investment.

investor

A person who helps steer the direction of the company and

reports to the owner. manager

The process of predicting revenue and expenses for comparison purposes. If

expectations aren’t met, then an investigation may take place to reveal the

cause of the discrepancy. Conversely, budgeting is planning for each dollar received so the money can be used

effectively and overspending does not occur.

budgeting

Policies and procedures companies follow to safeguard

their assets. controls

The practice of obtaining an insurance policy that guarantees reimbursement to a company for

a loss sustained as a result of certain dishonest behaviors in

workers. employee bonding

Policies and procedures companies follow to safeguard

their assets from employee theft. internal controls

Different people take turns doing the same job so that a fresh pair

of eyes may notice discrepancies.

rotation of duties

People in jobs who handle cash, inventory, or other assets who

are different from the people who account for those assets. The same can be said of liabilities.

segregation of duties

A type of financial institution, usually a corporation, charted by a state or federal government, that offers many services, including, for example, making loans;

investing in securities; holding depositors’ money in individual

accounts, honoring demands for payment against those accounts, and paying interest on them; and issuing

drafts and cashier’s checks.

bank

A kind of property ownership in which everyone who uses a facility is a part owner (for example, credit

unions or some types of condominiums). A cooperative is

often called a co-op.

cooperative

cooperative financial institutions in which all members (depositors and borrowers) are part owners and have a vote in leadership.

generally offer the same types of services as banks.

credit union

A firm that provides protection from the possibility of future

financial harm in exchange for periodic payments. Types of

insurance include fire, theft, and business interruption.

insurance company

Companies that specialize in selling securities (like stocks or bonds) issued by businesses.

investment firms

A firm that offers saving and loan services to its clients. It is

generally managed by a vote of its membership. Savings and

loan is often abbreviated as S&L.

savings and loan

An alternate term for a savings and loan.

thrifts

A market where the price of an item is arranged by the mutual consent of sellers and buyers.

free market

The integration among people, companies, and governments

across geographical boundaries.

globalization

To unite with something else; to form, coordinate, or blend into a

functioning or unified whole.

integration

The mutual responsibility and dependency on others.

interdependence

When companies reduce costs by transferring portions of work to outside suppliers rather than

completing it internally.

outsourcing

An insurance policy that pays benefits to the survivor of if the

policyholder is killed accidentally. Partial payments are made if the covered employee loses a body

part or sight because of an accident.

accidental death and dismemberment policy

An employer-funded retirement plan with payouts to the retiree

based on a formula that includes length of service and salary history, such as a pension.

defined benefit plan

A retirement plan in which a certain amount or percentage of money is set aside each year, by the employee or the company, or both; payouts are dependent on

the amount of contributions made. A 401(k) is a type of defined-

contribution plan.

defined-contribution plan

Insurance that pays a monthly benefit to workers who, because of injury or illness unrelated to

work, cannot do their normal job or any other job.

disability insurance

A health care arrangement under which a healthcare provider charges, and the insurance

company pays for, each service separately.

fee-for-service (FFS) plan

A work schedule that shifts working hours either earlier or

later than usual, in order to accommodate an employee’s needs outside work (such as

child care) or to avoid traveling at peak commute times.

flextime

Insurance plans that include coverage for medical care, dental

care, and vision care.

health insurance

A health insurance plan that requires its members to receive services only from its network of providers. Benefits are typically provided at 100%, less a small

($10-$20) co-payment.

health maintenance organization (HMO)

Pay an employee receives when she takes a company-sanctioned

day off from work.

holiday pay

Pay an employee receives (usually full regular salary) when absent from work because of a

summons to appear for jury duty.

jury duty pay

A policy that pays a lump sum to the beneficiary (the person named

by the policyholder to receive benefits) upon the death of the

policyholder.

life insurance

Pay an employee receives (usually full regular salary) when

absent from work to fulfill a military obligation.

military duty pay

An arrangement in which an insurer contracts with medical

care providers to furnish services at lower than usual fees in return for a certain volume of patients.

preferred provider organization (PPO)

Benefits paid for by employee deductions but not counted in the

total income taxed, such as 401(k) contributions and health-

care premiums.

pre-tax benefits

A benefit not directly related to the workplace or insurance

coverage but that makes life easier for the employee, such as

child-care subsidies, flextime, and payment of health club fees.

quality of life benefit

A plan that sets aside funds in an investment account for the

employee’s retirement years.

retirement plan

Wages paid to an employee who is absent from work for illness.

sick leave pay

A right granted to employees to purchase company stock at a set price, within a certain time period.

stock option

A work arrangement in which employees work some of the time

from a remote location using telecommunication links.

telecommuting

Company payments for tuition and/or fees for an employee to take coursework related to the

job.

work-related education assistance

A tax on business assets, such as machinery, computers,

delivery trucks, and unsold goods held for sale, paid to the county.

business property tax

Taxes on corporate income, paid to the federal government.

federal corporate income tax

Money withheld from employee salaries and paid to the federal

government.

federal employee withholding tax

Taxes imposed on goods that cross national borders.

import tax

A taxing board (such as a county or city) grants a short-term or

long-term phase-in of the required taxes, usually offered to

businesses in an urban development zone.

income tax abatement

A credit against a company’s income taxes for each employee

trained, usually offered to businesses in an urban

development zone.

job tax credit

Money for training costs provided by a governmental authority,

usually offered to businesses in an urban development zone.

job training grant

Taxes on corporate income, paid to the county or city government

(or both).

local corporate income tax

Medicare is part of the Federal Insurance Contribution Act (FICA) tax collected by the

federal government that pays healthcare benefits to retirees, the disabled, and children of

deceased workers.

Medicare

A company pays less for its property taxes than it otherwise

would, up to a maximum percentage stated by law, usually offered to businesses in an urban

development zone.

property tax abatement

Tax paid on business property, much like property taxes on a

private home.

real estate tax

Tax on goods or services, usually paid to county or city

government.

sales tax

Part of the Federal Insurance Contribution Act (FICA) tax

collected by the federal government that pays benefits to

retirees, the disabled, and children of deceased workers.

Social Security Insurance (SSI)

State taxes paid as a percentage of gross income. All businesses

that have gross revenue above a given amount must pay this tax,

not just corporations.

state commercial activity tax

State taxes paid as a percentage of corporate assets—only paid by

corporations.

state corporate franchise tax

Taxes on telephone, cell phone, or Internet use.

telecommunications tax

Taxes paid to persons filing “unemployed” after beginning as

employed. These are collected by the federal government (FUTA) and state government (SUTA).

unemployment tax

Employers pay this tax that goes, in part, into an insurance fund to

mitigate losses against employees suing for getting hurt

while on the job.

worker’s compensation