Chapter 12 Financial Management

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Chapter 12 Financial Management
2013-10-01 10:52:46
accounting financial management

Chapter 12 Financial Management vocab and important terms.
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  1. Revenue
    All income that a business receives over a period of time
  2. Expenses
    The costs of operating a business
  3. Budget
    Provides detailed plans for the financial needs of individuals, families and businesses
  4. Start-up budget
    plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable
  5. Operating budget
    Describes the financial plan for ongoing operations of the business for a specific period
  6. Cash budget
    An estimate of the actual money received and paid out for a specific period
  7. Financial records
    Used to record and analyze the financial performance of a business
  8. Assets
    What a company owns
  9. Liabilities
    What a company owes
  10. Owner's equity
    The value of the owner's investment in the business
  11. Balance sheet
    Assets, liabilities, and owner's equity for a specific date
  12. Income statement
    Reports the revenue, expenses, and net income or loss from operations for a specific period
  13. Payroll
    The financial record of employee compensation, deductions, and net pay
  14. Payroll records
    The documentation used to process earnings payments and record each employee's pay history
  15. Direct deposit
    Employer transfers net pay electronically into the employee's bank account
  16. Financial performance ratios
    Comparisons of a company's financial elements that indicate how well the business is performing
  17. Discrepancies
    Differences between actual and budgeted performance
  18. Business Budget
    Two main purposes.  Anticipate sources and amounts of income for a business.  Predict the types and amounts of expenses for a specific business activity or the entire business
  19. Small Business Administration (SBA)
    Provides many planning tools for new businesses
  20. Asset records
    identify the buildings and equipment by the business, their original and current value, and the amount owed if money was borrowed to purchase the assets
  21. Depreciation records
    identify the amount assets have decreased in the value due to their age and use
  22. Inventory records
    identify the type and quantity of resources and products on hand along with the current value of each
  23. Records of accounts
    identify all purchases and sales made using credit
  24. Accounts payable record
    identifies the companies from which credit purchases were made and the amounts purchased, paid, and owed
  25. Cash records
    lists all cash received and spent by the business