Expenses/ lower page 2

• Expenses


  When an asset loses value because it is used to make money
• Types of Expenses

  • Operating Expense
  • Cost of Sales
  • Utilities Expense
  • Purchases
  • Freight Expense
  • Advertising Expense
  • Depreciation Expense
  • Interest Expense
  • Rent Expense
  • Supplies Expense
  • Licenses Fees and Taxes
• Operating Expense


  Expenses related to the company's main activities
• Cost of Sales


  Expenses directly related to producing goods or providing services
• Utilities Expense


  Costs related to the consumption of various utilities
• Purchases


  Costs related to buying goods or services
• Freight Expense


  Cost incurred by a company for the transportation of goods or materials
• Advertising Expense


  Cost incurred for the promotional activities of the company's product or services
• Depreciation Expense


  The gradual wear and tear, the obsolescence, or decline in asset value
• Interest Expense


  Cost incurred by a company for borrowing funds
• Rent Expense


  Amount paid by a business to a property or space
• Supplies Expense


  Cost of supplies used during a given period
• Licenses Fees and Taxes


  Amount of taxes a company owes to the government
• Discretionary Expense


  Considered as nonessential spending
• Types of Discretionary Expenses

  • Company Travel
  • Investments and Innovations
  • Employee perks
  • Office improvements
  • Employee training
• Company Travel


  Costs incurred by the company for its employees' business-related travel activities
• Investments and Innovations


  Costs incurred for research and development
• Employee perks


  Amount the company spends for rewarding employees with good performance
• Office improvements


  Costs incurred for office innovations or upgrades
• Employee training


  Costs related to training and development opportunities for its employees
• Refinement


  Once the prototype has been enriched with the analysis feedback, the final product or service can be crafted and delivered to the market
• Prototyping


  Once an idea has been selected, the company must prototype its proposed product or service
• Ideation


  Evaluate the ideas with the most promising potential for success in the market
• Testing


  Determine if the product functions as intended or if the desired service offering appeals to the target audience
• Statement of Owner's Equity


  A financial statement that shows the changes in the owner's equity during a specific period of time, including the beginning and end of the owner's equity, net income or loss, additional investments, or any withdrawals or distributions taken by the owner
• Balance Sheet (Statement of Financial Position)


  Shows a company's financial position at a specific point in time, provides a snapshot of its assets, liabilities, and shareholders' equity
• Statement of Cash Flow


  Shows how cash is generated from operating activities, investing activities, and financing activities over a specific period
• Types of Cash Flow Activities

  • Operating activities
  • Investing activities
  • Financing activities
• Operating activities


  Detail cash flow generated once the company delivers its regular goods or services
• Investing activities


  Cash flow from purchasing or selling assets using free cash, not debt
• Financing activities


  Cash flow from both debt and equity financing
• Income Statement


  Financial statement that shows a company's revenues, expenses, and net profit over a specific period of time
• Types of Business Ownership

  • Partnership
  • Corporation
  • Sole Proprietorship
  • Cooperative
• Partnership


  Two (2) or more partners who co-own a business to make a profit
• Corporation


  Exist in contemplation of law; business has its own identity separate and distinct from stockholders
• Sole Proprietorship


  Initiated, organized, owned, and managed by a single person
• Cooperative


  A duly registered group of persons with a common interest to voluntarily join to achieve a lawful social and economic end
• Scalable Startup Entrepreneurship


  Involves launching a small-scale enterprise intending to quickly expand and transform into a highly lucrative company, focused on disruptive innovation and can continue or renew itself indefinitely
• Social Entrepreneurship


  Focuses on innovating and creating novel solutions to address pressing issues, play an essential role in having innovative approaches to social issues, such as poverty, education, and healthcare
• Buyer Entrepreneurship


  Involves business individuals who possess substantial capital and utilize it to acquire established companies or merge with smaller businesses