Chapter 12

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  1. Revenue
    All income that a business receives over a period of time
  2. Expenses
    The costs of operating a busness
  3. Budget
    Provides detailed plans for the financial needs of individuals, families, and businesses
  4. Start-up Budget
    The plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable
  5. Operating Budget
    This describes the financial plan for ongoing operations of the business for a specific period
  6. Cash Budget
    Its 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. Owners Equity
    The value of the owners investment in the business
  11. Balance Sheet
    The assets, liabilities, and owners equity for a specific date are listed on it
  12. Income Statement
    To report the revenue, expenses, and net income or loss from operations for a specific period, this is what a business prepares
  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
    the employer transfers net pay electronically into the employee's bank account
  16. Financial Performance Ratios
    Camparisons of a company's financial elements that indicate how well the business is performing
  17. Discrepancies
    Differences between actual and budgeted performance
  18. Profit
    The revenue is greater than expenses, the business will make one
  19. Loss
    Expenses exceed revenue, the business will suffer one
  20. Business Budget
    • 2 purposes:
    • 1. Anticipate sources and amounts of income for a business
    • 2. Predict the types and amounts of expenses for a specific business activity or the entire business
  21. Asset Records
    This identifies the buildings and equipment owned by the business, their original and current value, and the amount owed if money was borrowed to purchase the assets.
  22. Depreciation Records
    Identify the amount assets have decreased in value due to their age and use
  23. Inventory Records
    Identify the type and quantity of resources and products on hand along with the current value of each.
  24. Financial Statements
    Reports that sum up the financial performance of abusiness
  25. Balance Sheet
    A company reports its assets, liabilities, and owners equity
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Chapter 12
2013-10-01 14:51:07
Financial Management

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