Chapter 12: Financial management

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Chapter 12: Financial management
2013-10-01 10:56:56
Accounting financial management

Financial management
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  1. Revenue
    All income that a business receives over a period of time.
  2. Expenses
    The cost of operating a business.
  3. start-up budget
    It plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable.
  4. Operating budget
    Operating budget describes the financial plan for ongoing operations of the business for a specific period.
  5. Cash budget
    An estimate of the actual money received and paid out for a specific period.
  6. Financial records
    are used to record and analyze the financial performance of a business.
  7. balance sheet
    The assets, liabilities, and owner's equity for a specific date are listed.
  8. Assets
    are what the company owns.
  9. Liabilities
    are what the company owes
  10. Owner's equity
    is the value of the owner's investment in the business
  11. income statement
    To report the revenue, expenses, and net income or loss from operations for a specific period.
  12. payroll
    is the financial record of employee compensation, deductions, and net pay.
  13. Payroll records
    are the documentation used to process earnings payments and record each employee's pay history.
  14. Direct deposit
    the employer transfers net pay electronically into the employee's bank account.
  15. financial performance ratios
    are comparisons of a company's financial elements that indicate how well the business is performing.
  16. Discrepancies
    are the differences between actual and budgeted performance.
  17. types of records: Asset records
    identify the buildings and equipment owned by the business, their original and current value, and the amt. owed if money was borrowed to purchase the assets.
  18. types of records: Depreciation records
    identify the amt. assets have decreased in value due to their age and use.
  19. Inventory records
    identify the type and quantity of resources and products on hand along with the current value of each.
  20. cash records
    list all the cash received and spent by the business.
  21. Financial statements
    Reports that sums up the financial performance of a business
  22. owner's equity
    is the value of the business after liabilities are subtracted from assets.
  23. net
    loss occurs when expenses are greater than income
  24. payroll system
    maintains information on each employee to be able to calculate company's payroll
  25. Earnings report
    is included with the employee's paycheck