chapter 12 financial management

All income that a business receives over a period of time

The costs of operating a business.

When revenue is greater than the expenses

when expenses exceed revenue

Detailed plans for financial needs of individuals, families, and businesses.

• 2 purposes
• 1. anticipate sources and amounts of income for a business
• 2. predict the types of expenses for a specific business activity or the entire business.

plans incomes and expenses from the beginning of a new business or a major expansion until it becomes profitable

describes the financial plan for ongoing operations of the business for a specific period.

estimate of actual money revived and paid out for a specific period.

used to recognize and analyze the financial performance of a business.

company owns

what a company owes

value of the owners investment in the business

report that sums up the financial performance of a business.

to report the revenue expenses and net income or loss for operations for a specific period.

revenue is greater than expenses

expenses are greater than income

financial record of employee compensation

maintains info for each employee to be able to calculate the company's payroll

documentation used to process earnings payments and record each employee's pay history

employer transfers net pay electronically into the employees bank account

earnings report that is attached to the pay check is sometimes called this

comparisons of a companys financial elements that indicate how well the business is performing

current assets compared to the current liabilities

discrepancies are differences between actual and budget performance