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Business Mathematics Chapter 4: Income and Taxes Terms to Know: Section 1: Earning a Living Education is the biggest factor in earning a living. The two other main factors that affect earnings is years with the business and responsibility. You may be paid your wages by salary, hourly, commission, piecework, and tip. Salaries are paid weekly, bi-weekly, or monthly. Employees who are paid hourly are paid for the number of hours worked within the pay period. If you work more than a set number of hours within a certain period, you receive overtime pay which is more than your regular pay. A commission is a percentage of a sale. A tip is given to show appreciation for a service done. Section 2: Deductions from Gross Pay Net pay is paid after deductions. Section 3: Social Security Tax The two factors that determine the amount of FICA withheld is Social Security percent and the maximum taxable income. Inflation is the increase in the money supply.

Business Mathematics Chapter 3: Investment Terms to Know: Section 1: Reading the Stock Exchange Table The money you earn has two purposes (1) to spend on the present needs and wants and (2) to invest for future needs and wants. The principal is the amount spent on the stocks. Dividends are the portion of a profit. A fraction is a part of a whole object. The bottom number is the denominator, the top number is the numerator. The greatest common factor is the largest number that will divide evenly into both the numerator and the denominator. A prime number is a number that is divisible only by 1 and itself. A composite number that has other factors besides 1 and itself. The least common denominator is the smallest number that contains all of the denominators. An improper fraction occurs when the numerator is equal to or larger than the denominator. Section 2: The Stock Market Invert means to turn the fraction upside down Section 3: Buying and Selling Stock

Business Mathematics Chapter 2: Managing Your Business Terms to Know: Section 12: Metric Measures The metric system was developed in France around 1790, during the time of the French Revolution. milli = .001 centi = .01 deci = .1 deca = 10 hecto = 100 kilo = 1000 Section 13: Metric-English Conversions Liter = Quart 1 liter = 1.06 quarts 1 quart = .95 liter Mile = Kilometer 1 mile = 1.61 kilometers 1 kilometer = .62 mile Ounce = Gram 1 ounce = 28.35 grams 1 gram = .04 ounce Kilogram = Pound 1 kilogram = 2.2 pounds 1 pound = .45 kilogram Meter = Yard 1 meter = 1.09 yards 1 yard = .91 meter

Business Mathematics Chapter 2: Managing Your Business Terms to Know: Section 11: More English Measures Linear measures are used to measure line segments. The fluid ounce is the basic liquid measure. English Linear Measures 12 inches = 1 foot 36 inches = 1 yard 3 feet = 1 yard 5280 feet = 1 mile 1760 yards = 1 mile English Liquid Measures 2 cups = 1 pint 2 pints = 1 quart 4 quarts = 1 gallon 3 teasponns = 1 tablespoon 8 fluid ounces = 1 cup 16 fluid ounces = 1 pint English Dry Measures 2 pints = 1 quart 8 quarts = 1 pecj 4 pecks = 1 bushel 4 quarts = 1 gallon Measures of Time 60 seconds = 1 minute 60 minutes = 1 hour 24 hours = 1 day 7 days = 1 week 52 weeks = 1 year 365 days = 1 year 366 days = 1 leap year 12 months = 1 year 10 years = 1 decade 20 years = 1 score 100 years = 1 century 1000 years = 1 millenium English Measures of Weight 16 ounces = 1 pound 2000 pounds = 1 ton

Business Mathematics Chapter 2: Managing Your Business Terms to Know: Section 10: Storage and Inventory Volume is the measure of the content or capacity of a solid figure. Cube is the unit used to find the volume. V = lwh (V = volume, L = length, W = width, H = height) The conversion factor is the number of small units in one larger unit. A cube is a rectangular solid whose length, width and height are congruent (same size and shape). The sides of a cube are called its edges. A cone has one circular base and one vertex. Inventory is the number of goods in the sales area of the store plus those in the stockroom. < (less than) > (greater than)

Business Mathematics Chapter 2: Managing Your Business Terms to Know: Section 5: Inventory Turnover The inventory turnover is a measure of how many times the value of inventory is sold in one year. Inventory Turnover = Cost of Goods Sold / Average Inventory. Inventory Turnover = Net Sales / Average Inventory Section 6: Break-Even Point The break-even point is the point at which you stop losing money. Fixed costs remain the same no matter how many items are produced. Variable costs increase with the number of items produced. Parallel lines are lines that are equidistant apart at all points. Intersecting lines are lines that cross each other. PEMDAS Parentheses Exponents Multiplication Division Addition Subtraction Section 7: Break-Even Point Using the Formula Break-even point = Total fixed costs / Selling Price - Variable Cost/Unit Section 8: Trade Discount The list price is the suggested retail price. The price paid after the discount ha

Business Mathematics Chapter 2: Managing Your Business Terms to Know: Section 1: Ratio Analysis The ratio analysis is used often by business management to analyze the financial position of the business. A ratio compares two numbers or quantities by using division. The first term in a ratio is called the antecedent. The second term in a ration is called the consequent. Liquidity of assets means turning your assets into cash. Current ratio = Current Assets / Current Liabilities Current assets are cash assets or assets that can be quickly converted to cash. Current liabilities are debts due within one year. The current ration should be a minimum of 2.00 for a business to be financially sound. Quick ratio = Cash + receivables / Current Liabilities Section 2: Percent Analysis Percent means hundredth. Percent is another way to express a ration written as a ratio always has a consequent of 100. The amount of sales is always the consequent, and the other amounts in t

Business Mathematics Chapter 1: Stewardship Terms to Know: Section 10: Debits and Credits Assets, liabilities, capital, income, cost of goods sold, and expenses are the six accounting categories used in bookkeeping. A journal is a book of ruled with columns in which to enter the dollar amounts of any business transaction. A double-entry bookkeeping system means that for every financial transaction in a business there are two entries - a debit entry and a credit entry. A debit entry is a dollar amount that is recorded in the left column. A credit entry is a dollar amount that is recorded in the right column. How To Fill Out Credit Entries/Debit Entries An increase in assets is entered in the left (debit) column. A decrease in assets is entered in the right (credit) column. An increase in the cost of goods sold is entered in the left (debit) column. An increase in expenses is entered in the left (debit) column. An increase in liabilities is entered in the right (cr

Business Mathematics Chapter 1: Stewardship Terms to Know: Section 7: Income, Cost of Goods Sold, and Operating Expenses Income is the revenue (money) received. Cost of goods sold is the amount of the business paid for the merchandise for sale. The utilities, employee wages, insurance, property taxes, office supplies, and any other expenses incurred by the business are operating expenses. Division Process The number you are dividing in the division process is called the dividend. The dividend is divided by the divisor producing a quotient. Section 8: Profit or Loss Net sales are your income from sales less any sales returns or allowances made. Net profit occurs if your expenses are less than the gross profit. Net loss occurs if your expenses are more than the gross profit. Net Sales = Sales - Returns and Allowances Gross Profit = Net Sales - Cost of Goods Sold Net Profit = Gross Profit - Expenses Net Loss = Expenses - Gross Profit Equity A corporati

Business Mathematics Chapter 1: Stewardship Terms to Know: Section 1: Keeping Money Records Accounting (Bookkeeping) is the keeping of money records. Addition Process Adding is the arithmetic process of combining numbers to reach a total. The numbers combined are called addends, and the total of the addends combined is called the sum. When doing addition with decimals, always keep the decimal points aligned. Section 2: Cash Receipts and Payment Records Cash receipt records and cash payment records are two money records that can help families and individuals avoid financial problems. A deficit occurs when you have more payments than receipts. An excess occurs when you have more receipts than payments. Subtraction Process In subtraction, the number being decreased is the minuend, the amount of reduction is the subtrahend, and the remaining amount is the difference. Section 3: Assets An asset is a property that has any worth to your business. When cus

Economics Chapter 13: A Look at the Global Economy Terms to Know: Section 1: The Growth of the Global Economy Globalism is a philosophy which regards the entire world as one giant community that should be unified politically and economically. The United Nations is an international organization that would maintain international peace gained support among the Allied nations during World War II. The General Assembly meets at least once a year to discuss international problems, and each member country, regardless of its size, has one vote. The Security Council is a body which currently has five permanent and ten elected-member countries. The duties of the Economic and Social Council are to study economic and social problems and to make recommendations to the General Assembly and UN specialized agencies. The World Bank was first established at the end of World War II to lend money to Japan and the countries of Western Europe. Today, the World Bank consists of two institut

Economics Chapter 12: Promise and Performance in the Command Economy Terms to Know: Section 1: Goals of the Command Economy Nationalism is the promotion of one's own nation and government regardless of moral considerations. Communism is an economic system based upon public ownership and government control of the production and distribution of nearly all national resources. Bourgeois are property owners. The proletariat is the common working class. Section 2: The Infiltration of Socialism Socialism is an economic system based upon collective ownership and control of many or most national resources. Socialism is also known as welfare capitalism, managed capitalism, democratic socialism, and market socialism. We've been creeping closer to socialism, a system that someone said works only in heaven, where it isn't needed and in hell, where they've already got it.

Economics Chapter 11: Successes and Difficulties in the Market Economy Terms to Know: Section 1: Achievements of the Market Economy 6 Causes to Modern Economic Prosperity Competition Hard Work Entrepreneurship Saving Limited Governmental Control Technology Section 2: Business Cycles A business cycle is the recurrent fluctuations in the level of economic activity. An expansion (boom) is when industries increase the number of goods they produce. Gross Domestic Product (GDP) is the value of all finished goods and service produced within a country during a year's time. Gross National Product (GNP) refers to the value of all finished goods and services produced by citizens during a year's time. The peak is the highest point of the business cycle, where activity is at its highest. A recession is a period of economic decline. The trough is the lowest point in the business cycle. Leading indicators are components of the economy that normally change befo

Economics Chapter 10: Government and the Economy Terms to Know: Section 1: The Purpose of Government A government is an established system of political administration by which a nation, state, society, or organization is ruled. Section 2: Government and Macroeconomics Macroeconomics is the study of national and international economies and how they are affected by large-scale choices and public policies. Microeconomics is the study of specific components within a major economy and how the choices made by individuals and businesses affect that economy. Section 3: Governments' Potential Danger to Economies Socialism is an economic system based upon collective ownership and control of national resources. Five Potential Dangers to Economies: (1) Excessive Taxation (2) Inflation and debasement of money (3) Excessive public expenditure (4) Excessive regulation and direction of the economy (5) Political plundering of the economy Section 4: American Go

Economics Chapter 9: What Money is Good For Terms to Know: Section 1: The Three Functions of Money Money is anything that is generally accepted as a means of payment. The Three Main Functions of Money: (1) To be a medium of exchange (2) To provide a measure of value (3) To provide a store of value Bartering Bartering is the direct exchange of one good for another good without a standard form of money passing from hand to hand. The Six Characteristics of Money: Portability Durability Homogeneity Divisibility Constancy Intrinsic valuableness Section 2: Metallic Money Inflation is when the level of prices in the market rises because too much money is in circulation. Deflation when prices decrease because money seems more valuable and stable. Section 3: Paper Money Legal tender is any form of money that has been declared a valid means of payment. Bullion is gold, silver, or platinum. Fractional reserve banking is a system which allow