Jump Start Micro-Enterprise Key Financial Concepts Set 2 Flashcards

The 12 month period a company uses to report financial results.

Costs that do not vary based on the units sold by your enterprise. example: rent

A special account where individuals can deposit retirement funds that can grow tax-deferred until they withdraw them after they retire. The advantage of an IRA: there are no annual income taxes on any dividends or profitable sales that an IRA makes-the money remains in the account and only gets taxed when the individual retires. If an individual withdraws money from an IRA before he/she retires they are forced to pay the IRS significant penalties for early withdrawal.

Debt you owe someone that is paid in monthly payments. Examples: your car or truck payment, your credit cards and your mortgage are all paid in monthly installment payments.

A person or company with sufficient liquidity who guarantees to repay loan if a company cannot.

The amount of insurance policyholder receives from the insurance company to reimburse the policyholder for a covered loss. example: fire in store cost $20,000. After deductible of 500 the insurance will pay $19,500.

The individual or business that purchase an insurance policy for various types of protection.

The amount a policyholder pays for an insurance policy. example: fire insurance annual policy costs of $1,000.

The merchandise that a company sells to its customers.

A legal decision requiring a person or company to pay another person or company. example: I sued that company for failure to repay on loan. I win in court for the repayment of money plus lawyer's fees.