Chapter 12 Financial Management

  1. Revenue
    All income that a business receives over a period of time.
  2. Expenses
    The costs of operating a business.
  3. Profit
    When revenue is greater than expenses.
  4. Loss
    When expenses are greater than revenue.
  5. Budget
    Provides detailed plans for the financial needs of individuals, families, and businesses.
  6. Business Budget
    • 1. Anticipate sources and amounts of income for a business.
    • 2. Predict the types and amounts of expenses for a specific business activity or the entire business.
  7. Small Business Administration (SBA)
    Provides many planning tools for new businesses.
  8. Start-up Budget
    Plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable.
  9. Operating Budget
    Describes the financial plan for ongoing operations of the business for a specific period.
  10. Cash Budget
    An estimate of the actual money received and paid out for a specific period.
  11. Financial Records
    Used to record and analyze the financial performance of a business.
  12. 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.
  13. Depreciation Records
    Identify the amount assets have decreased in value due to their age and use.
  14. Inventory Records
    Identify the type and quantity of resources and products on hand along with the current value of each. Accurate records are crucial to determine if adequate resources are available to meet operating and production needs as well as customer demand.
  15. Records of Accounts
    Identify all purchases and sales made using credit.
  16. Accounts Payable Record
    Identifies customers that made purchases using credit and the status of each account.
  17. Cash Records
    List all cash received and spent by the business.
  18. Payroll Records
    Contains information on all employees of the company, their compensation, and benefits.
  19. Tax Records
    Show all taxes collected, owed, and paid.
  20. Asstes
    What a company owes
  21. Liabilities
    What a company owes.
  22. Owner's Equity
    The value of the owner's investment in the business.
  23. Financial Statements
    Reports that sum up the financial performance of a business.
  24. Balance Sheet
    The assets, liabilities, and owner's equity for a specific date are listed here.
  25. Income Statement
    The report the revenue, expenses, and net income or loss from operations for a specific period.
  26. Current Assets
    Assets that can easily be converted into cash
  27. Long-term Assets (Fixed Assets)
    Assets with a life span of more than a year.
  28. Current Liabilities
    Liabilities that will  be paid within a year.
  29. Long-term Liabilities
    Debts that will continue for longer than a year.
  30. Payroll
    The financial record of employee compensation, deductions,
Card Set
Chapter 12 Financial Management
chapter 12 financial management, includes accounting.