ENTREP FINALS

• Business cycle

  Stages of a business: Introduction, Growth, Stability, Decline
• Introduction stage


  • Products or services are produced and developed in the market
• Growth stage


  • Sales/revenues, profits or earnings are increasing yearly
• Stability stage


  • Business is in a state of equilibrium regardless of sales, costs etc. or on the point of break even
• Decline stage


  • Business is on the phase of decreasing or a higher loss in terms of sales, not gaining profit for 3-5 consecutive years
• Cottage enterprise


  Asset size of 250,000 to 500,000 pesos
• Small enterprise


  Asset size of 500,000 to 2.5 million pesos
• Types of activities in Cash flow

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


  Transactions that relate to how a business earns money on a day-to-day basis
• Financing activities


  Activities come from entering into loans to avail more cash or to pay long-term debts; owner's additional investments and withdrawals
• Investing activities


  Come from the sale (receipts) and purchase (payments) of non-current assets, businesses, and securities used for the maintenance of and additions to support/expand the company's operation and competitiveness in the future
• Statement of cash Flow


  Financial statement that explains the net change in cash for the year
• Statement of Financial Position


  Other term of Balance sheet in the accounting concepts
• Statement of Comprehensive Income


  Statement that discusses the sales/revenue of the company records every year
• Gain


  If the expenses is greater than the sales or revenue, what is the effect of the Net income
• Loss


  If the expenses is lesser than the sales or revenue, what is the effect of the Net income
• Depreciation Expense


  Allocated portion of the cost of property, plant and equipment charged to expense in the current accounting period
• Amortization Expense


  Write-off of an intangible asset over its expected period use, which reflects the consumption of the asset
• Bad Debts Expense


  Amount of accounts receivable that is estimated as uncollectible and is recognized as an expense in the current accounting period
• Cost of Sales


  Cost of merchandise or goods that were sold during a particular accounting period
• Wages Expense


  Costs of the service rendered by workers who are paid on an hourly or based on output
• Accounts Payable


  Open accounts which represent the amount of money owed by the business to creditors or suppliers
• Notes Payable


  Amount of money owed by the business to the supplier or creditor evidenced by a promissory note
• Mortgage Payable


  Amount of money borrowed by the business from a bank or a lending institution which is secured by collateral, usually payable more than one year
• Interest Income


  Interests earned on notes received and bank interest on savings
• Gain on sales of other assets


  Income derived from the sales of assets used in the business operation
• Service revenues


  Earnings made by any business involved in rendering services
• Expenses


  Costs being incurred by the business in generating revenues
• Liabilities


  Present obligations of the business arising from past transactions or events, what the business owes
• Assets


  Major account which are resources owned by the business as the result of company's transactions
• Revenues


  Earnings from rendering of services or selling of goods