Card Set Information
Principles of Business Administration Flash Cards.
All of the income that a business receives over a period of time.
The cost of operating a business.
When revenue is greater than expenses.
When expenses exceed revenue, the business will suffer a loss.
Provides detailed plans for the financial needs of individuals, families, and businesses.
Start up budget
Plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable.
Describes the financial plan for ongoing operations of the business for a specific period.
A estimate of the actual money received and paid out for a specific period.
Used to record and analyze the financial performance of a business.
Types of Records
Asset records-identify the buildings and equipment owned by the business.
Depreciation Records- identify the amount assets have decreased in value due to their age and use.
Inventory records- identify the type and quantity of resources and products on hand, along with the current value of each.
Types of Records Continued
Records of Accounts- identify all purchases and sales made using credit.
Cash Records-list all cash received and spent by the business.
What a company owns
The expenses that the company owns.
The value of the owner's investment in the business
Shows the assets, liabilities, and owner's equity for a specific date
Used to report revenue, expenses, and net income or loss from operations for a specific period.
The financial record of employee compensation, deductions, and net pay.
Documentation used to process earnings payments and record each employee's pay history
The employer transfers net pay electronically into the employee's bank account.
The federal government, state, and some local governments require employers to withhold income tax from their employees' pay.
Social Security and Medicare
The gov. requires employers to withhold these deposits.
Employers pay Federal Unemployment Tax tot he unemployment insurance system.
Financial Performance Ratios
Comparisons of a company's financial elements that indicate how well the business is performing.
Differences between actual and budgeted performance
Net income ratio
Total sales compared to the net income