Chapter 12: Financial Management

  1. Revenue
    All the income that a business receives over a period of time
  2. Expenses
    Costs of operating a business
  3. Budget
    Detailed plans for the financial needs of individuals, families and business
  4. Start Up Budget
    Plans income and expenses from the beginning of a new business 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
    Anything a business owns
  9. Liabilities
    Anything a business owes
  10. Owners Equity
    Value of the business investments
  11. Income Statement
    To report revenue, expenses, and specific period
  12. Net Income
    When revenue is greater than expenses
  13. Net Loss
    Expenses are greater than income
  14. Payroll
    the financial record of employee compensation, deductions, and net pay
  15. Payroll System
    maintains information on each employee to be able to calculate the company's payroll
  16. Payroll Records
    the documentation used to process earnings payments and record each employees pay history
  17. Earnings Report
    provides information for the current pay period as well as the cumulative amounts for the year
  18. Pay Stub
    The earnings report is attached to the pay check
  19. Direct Deposit
    the employer transfers net pay electronically into the employees bank account
  20. Financial Performance Ratios
    Comparisons of company's financial elements that indicate how well the business is performing
  21. Discrepencies
    differences between actual and budgeted performance
  22. Business Budget
    Anticipate sources and amounts of income for a business
  23. Profit
    Revenue greater than expenses
  24. Loss
    Expenses exceed revenue
  25. Payroll Taxes
    Social security, Medicare, and unemployment taxes
Card Set
Chapter 12: Financial Management
Financial Management