Financial Management

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Financial Management
2013-10-01 11:30:27
Financial Management Accounting

Chapter 12 Financial Management flashcards.
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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
    Where the assets, liabilities, and owner's equity for a specific date are listed.
  12. Income statement
    Where a business 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
    What an employer uses to transfer 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. Profit
    When revenue is greater than expenses.
  19. Loss
    When expenses exceed revenue.
  20. Financial statements
    Reports that sum up the financial performance of a business.
  21. Payroll system
    Maintains information on each employee to be able to calculate the company's payroll and to make the necessary payments to each employee.
  22. Current ratio
    Current assets compared to the current liabilities.
  23. Debt to Equity Ratio
    A ratio that tells you how much of the business is relying on the money borrowed from others that will have to be paid back rather than money provided by the owners.
  24. Return on Equity Ratio
    Shows the rate of return the owners are getting on the money they invested in the company.
  25. Net income ratio
    Shows how much profit is being made by each dollar of sales for the period being analyzed.