chapter 12 financial management

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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. Profit
    When revenue is greater than the expenses
  4. loss
    when expenses exceed revenue
  5. budget
    Detailed plans for financial needs of individuals, families, and businesses.
  6. business budget
    • 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.
  7. start up budget
    plans incomes and expenses from the beginning of a new business or a major expansion until it becomes profitable
  8. operating budget
    describes the financial plan for ongoing operations of the business for a specific period.
  9. cash budget
    estimate of actual money revived and paid out for a specific period.
  10. financial records
    used to recognize and analyze the financial performance of a business.
  11. assets
    company owns
  12. liabilities
    what a company owes
  13. owners equity
    value of the owners investment in the business
  14. financial statement
    report that sums up the financial performance of a business.
  15. income statement
    to report the revenue expenses and net income or loss for operations for a specific period.
  16. net income
    revenue is greater than expenses
  17. net loss
    expenses are greater than income
  18. payroll
    financial record of employee compensation
  19. payroll system
    maintains info for each employee to be able to calculate the company's payroll
  20. payroll records
    documentation used to process earnings payments and record each employee's pay history
  21. direct deposit
    employer transfers net pay electronically into the employees bank account
  22. pay stub
    earnings report that is attached to the pay check is sometimes called this
  23. financial performance ratios
    comparisons of a companys financial elements that indicate how well the business is performing
  24. current ratios
    current assets compared to the current liabilities
  25. discrepancies
    discrepancies are differences between actual and budget performance
Card Set
chapter 12 financial management
chapter 12 financial management
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