Financial Management

  1. Revenue
    All income that a business receives over a period of time.
  2. Expenses
    are the costs of operating a business
  3. Budget
    Provides 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 or 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. Assest
    What the company owns
  9. Liabiliteies
    Are what the 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 are listed
  12. Income Statement
    To report the revenue, expenses and net income or loss from operations for a specific period
  13. Payroll
    The financial record of employee compensation, deductions, and net pay
  14. Payroll Records
    are the documentation used to process earnings payments and record each employee's pay history
  15. Direct Deposit
    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
    Differences between actual and budgeted performances
  18. Profit
    If revenue is greater than expenses
  19. Loss
    If expenses exceed revenue
  20. Business Budget: 2 Main Purposes
    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
  21. Budgeting Process: Four Fundamental Steps
    1. Prepare a list of each type of income and expenses that will be a part of the budget.

    2. Gather accurate info from business records and other info sources for each type of income and expense.

    3. Create the budget by calculating each type of income, expense, and the amount of net income or loss.

    4. Explain the budget to people who need financial info to make decisions.
  22. Types Of Records
    1. Assets Records - identify the buildings and equipment owned by the business, their original and current value, and the amount owned if money was borrowed to purchase the assets.

    2. Depreciation Records - identify the amount assets have decreased in value due to their age and use

    3. Inventory Records - identify the type and quantity
Card Set
Financial Management
PBA - Financial Management Flashcards