Business Finance Chapter 5 Vocabulary

current liabilities that are due to be paid within the year and often sooner.

• Account payable
• cash budget
• Account receivable
• current assets

the money owed for the purchases customers buy on credit

• Account payable
• cash budget
• Account receivable
• current assets

The number of an item a business must sell just to cover costs

• Account payable
• compensation
• Breakeven point
• current assets

the ability of the borrower to repay money owed

• Capacity
• compensation
• Account receivable
• current liabilities

an estimate of future cash receipts and cash payments for a specified period of time

• Capacity
• Cash budget
• breakeven point
• current liabilities

the wages or salary along with other financial benefits paid to employees

• Capacity
• Compensation
• breakeven point
• current liabilities

the guidelines used for approval of credit customers

• Credit policy
• fixed costs
• inventory
• current ratio

the conditions under which credit is extended by a lender to a borrower

• Credit terms
• fixed costs
• inventory
• current ratio

items of value in an organization that will likely be converted into cash within a year

• Credit policy
• credit terms
• compensation
• Current assets

amounts owed that need to be paid within the next year

• Credit policy
• credit terms
• compensation
• Current liabilities