Chapter 12 Financial Management

  1. Revenue
    All income that a business receives over a period of time.
  2. Expenses
    The cost of operating a business
  3. Budget
    A detailed plan for the financial needs of indivuiduals, 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
    The assets, liabilities, and owner's equity for a specific date
  12. Income Statement
    A report that covers the revenue and expenses of a business for a specific period.
  13. Payroll
    A financial record of employee compensation, deductions, and net pay
  14. Payroll Records
    The documentations used to process earnings payments and record each employee's pay history
  15. Direct Deposit
    when the employer transfers 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
    The differences between actual and budgeted performance
  18. Records of Accounts
    Identifying all purchases and sales made using credit.
  19. Accounts Payable Record
    Identifies the companies from which credit purchases were made and the amounts purchased, paid, and owed
  20. Account Receivable Record
    Identifies customers that made purchases using credit and the status of each account
  21. Cash Records
    List all cash received and spent by the business
  22. Payroll Records
    Contain info on all employees of the company, their compensation, and benefits
  23. Tax Records
    Shows all taxes collected, owed, and paid
  24. Financial Statements
    A report that sums up the financial performance of a business
  25. Net Income
    When revenue is higher than expenses
Card Set
Chapter 12 Financial Management
Chapter 12 note cards for Principles of Business Administration