FMP - Finance - Part 01

  1. Accounting
    A monetary reporting system used to inform interested parties about a firm’s business transactions.
  2. Accrual basis accounting
    Revenues recorded when earned and expenses recorded when incurred.
  3. Activity based costing (ABC)
    A cost measurement system that is often used to track and control overhead costs; accumulates costs of activities that consume resources.
  4. Amortization
    The systematic reduction of a lump-sum amount; the expense applies to intangible assets (such as patents, franchises, leaseholds, and goodwill) in the same way depreciation applies to physical assets.
  5. Annual work plan (AWP)
    A plan that covers short-term needs, is very specific and based on solid projections.
  6. Asset
    Something that retains value for a period of time after purchase such as a building or a piece of equipment.
  7. Balance sheet
    A “snap shot” of a firm’s financial position at a specific point in time.
  8. Budget
    A formal, numerical expression of how an organization, or a part of the organization, expects to operate for a defined period of time.
  9. Business
    The use, interpretation, and management of documents related to the administration and management of contracts, service providers, and leases including lease agreements, business cases, charge backs, and procurement policies and procedures.
  10. Capital asset
    A depreciable item whose cost is significant to the company and whose expected life is longer than one accounting period and often much longer.
  11. Capital budget
    Shows financial impacts resulting from major, long-term, non-routine expenditures for items like property, plant and equipment.
  12. Capital rationing
    The allocation of investment funds among multiple projects when senior management places an upper limit on the size of the capital investments or the organization lacks sufficient money.
  13. Capitalization cutoff point
    A designated limit (or, “floor”) for capital requests: Under which an item is expensed in the period purchased. Over which it will be capitalized and depreciated for the length of its useful life.
  14. Cash flow
    Net cash before financing, including acquisitions.
  15. Chargeback / Cross charging / Recharging
    The ability of facility management “to charge its services to another group that is requesting those services."
  16. Chart of accounts
    Numerical list of all standard items that an accounting system tracks: assets, liabilities, net assets, revenues, and expenses.
  17. Closing fiscal period
    Process of transferring account balances from sub-ledgers to trial balance account at the end of an accounting period; typically associated with income statement accounts.
  18. Contract closeout
    The point at which the termination conditions of the contract have been met (and notice of termination served).
  19. Cost
    The price paid for acquisition, maintenance, production, or use of materials or services.
  20. Cost allocation
    The process of determining the proportional share of a total cost that belongs to a particular cost object based on data about the proportions of the total resource cost consumed by the cost object.
  21. Cost center
    An organizational unit in which budgetary funding is used to sustain operations.
  22. Cost drivers
    Those activities that have a direct and causal relationship to the incurring of overhead costs.
  23. Cost of operation
    The total costs associated with the daily operation of a facility.
  24. Cost of ownership
    • The cost to the owner of owning the building, servicing the existing debt, and receiving a return on equity. This also
    • includes the cost of capital improvements, maintenance and repair, operations, and disposal.
  25. Cost tracing
    Assigning direct costs to a particular cost object.
  26. Cost-benefit ratio
    Comparison of the net present value of an investment decision or project with its initial cost. Net present value is divided by the investment or project's initial cost; a ratio of greater than one indicates that the project is a viable.
  27. Credit
    The positive cash entries in a bank account.
  28. Creditor
    A lender of money or one to whom funds are owed.
  29. Currency conversion factor
    The net rate at which the organization converts revenues and expenses from one currency into another. This is often an internally agreed rate set at the start of the budget year so as to remove the effect of currency fluctuations from operational budgets, and is almost never the same as the nominal exchange rate.
  30. Debit
    An amount due to be paid from, or already paid from, an account.
  31. Debtor
    An individual, company, or other organization that owes debt to another individual, company, or organization (the creditor).
  32. Depreciation
    A noncash charge against assets, such as cost of property, plant, and equipment over the asset’s useful life. It is an expense associated with spreading (allocating) the cost of a physical asset over its useful life.
  33. Differential cost
    A cost concept that implies that costs and revenues differ depending on the conditions.
  34. Direct costs
    Costs that can be specifically traced to an item or activity (for example, repairing a hole in the roof).
  35. Discount rate
    The rate at which future cash flows are discounted because of the time value of money.
  36. Double-entry accounting / Dual-entry accounting
    An accounting system in which each transaction is recorded in at least two places: a debit to one account and a credit to another account.
  37. Earned revenue
    Revenue included in the budget because the organization has done a substantial amount of what it promised to do (provided goods or services).
  38. Earnings before interest and taxes (EBIT)
    A measure of an organization’s earning power from ongoing operations, equal to earnings before deduction of interest payments and income taxes.
  39. Earnings before interest, tax, depreciation and amortization (EBITDA)
    An approximate measure of an organization’s operating cash flow based on data from the organization’s income statement. Calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, and amortization.
  40. Equity
    The residual ownership interest in an organization’s assets after deducting all of its liabilities. Can also be the issued shared capital of the organization.
  41. Equivalent annual cost (EAC)
    The cost per year of owning and operating an asset over its entire lifespan. This measure facilitates comparisons of the cost effectiveness of various assets.
  42. Expenses
    Money outflow that represents goods and services consumed in the course of business operations.
  43. Feasibility study
    Study of a planned scheme or development, the practicality of its achievement, and its projected financial outcome.
  44. Finance
    The use, interpretation, and management of information related to the financial operation of the facility.
  45. Financial accounting
    Relates to the preparation of financial statements on the organization as a whole. May be used by owners and other internal parties but primarily intended for external parties such as creditors, investors, government agencies, unions, and suppliers. Information is developed according to specific accounting standards.
  46. Financial Accounting Standards Board (FASB)
    The primary financial reporting standards-setting body in the United States.
  47. Financial leverage
    The use of borrowed money in acquiring an asset.
  48. Financial ratios
    Analytical tools used to exam the relationship of one quantity to another.
  49. Financial reporting
    Process of presenting information about an entity’s financial position, operating performance, and cash flow for a specified period.
  50. Financial statements
    Documents (e.g., balance sheet, income statement, statement of cash flows, and statement of retained earnings) that report financial information about an organization.
  51. Fixed asset
    As asset, such as property, plant, or equipment, that has a long life and cannot be expensed in a single year or cannot easily be converted into cash.
  52. Fixed costs
    Costs that remain unchanged in total for a given time period, despite wide changes in the related level of total activity.
Author
faker1010
ID
342671
Card Set
FMP - Finance - Part 01
Description
FMP
Updated