Chapter 12 Financial Management

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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. Profit
    if revenue is greater than expenses
  4. Loss
    if expenses exceed revenue
  5. Budget
    detailed plans for the financial needs of individuals, families, and business
  6. Business Budget
    • anticipates sources and amounts of income for a business
    • predicts the types and amounts of expenses for a specific business activity or the entire business
  7. Start-up Budget
    plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable
  8. Operating Budget
    describes the financial plan for ongoing operations of the business fro a specific period
  9. Cash Budget
    an estimate of the actual money received and paid out for a specific period
  10. Financial Records
    used to record and analyze the financial performance of a business
  11. Asset Records
    identify 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
  12. Depreciation Records
    identify the amount assets have decreased in value due to their age and use
  13. Inventory Records
    • identify the type and quantity of resources and products on hand along with the current value of each
    • accurate records are crucial
  14. Assets
    what a company owns
  15. Liabilities
    what a company owes
  16. Owner's Equity
    the value of the owner's investment in the business
  17. Balance Sheet
    lists the assets, liabilities, and owner's equity for a specific date
  18. Income Statement
    used to report the revenue, expenses, and net income or loss from operations for a specific period
  19. Payroll
    financial record of employee compensation, deductions, and net pay
  20. Payroll Records
    the documentation used to process earnings payments and record each employee's pay history
  21. Direct Deposit
    the employer transfers net pay electronically into the employee's bank account
  22. Financial Performance Ratios
    comparisons of a company's financial elements that indicate how well the business is performing
  23. Discrepancies
    differences between actual and budgeted performance
  24. Records of Accounts
    identify all purchases and sales made using credit
  25. Accounts Payable Record
    companies from which credit purchases were made and amounts purchased, paid, and owed
  26. Accounts Receivable Record
    identifies customers that made purchases using credit and the status of each account
  27. Cash Records
    list all cash received and spent by the business
  28. Payroll Records
    contain info on all employees of the company, their compensation, and benefits
  29. Tax Records
    show all taxes collected, owed, and paid
  30. Advise of deposit
    receipt of deposit
Card Set:
Chapter 12 Financial Management
2013-10-01 14:43:59
accounting financial management

chapter 12 financial management
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