Chapter 12-Financial Management

An operating budget determines if a business has adequate finances to pay bills or if it will need to borrow money

Revenue > Expenses =

In simple terms, ____________________ are what a company owns.

This shows how much profit is being made by each dollar of sales for the period being analyzed.

The company’s liabilities divided by the owners’ equity is the current ratio.

Assets – Liabilities = Owner’s Equity.

The value of the buildlings and equipment owned by a business can be determined in the

The financial record of employee compensation, deductions and net pay is known as

which of the following is NOT one of the three important elements of a company's financial strength?

Sales, expenses, and profits or losses for a specific period are reported in a company’s income statement.

Basic Financial Equation is

At the end of the period covered by a budget, the business will prepare new financial statements.

Current liabilities are amounts owed that will be paid in less than

Which type of financial records identify the amount assets have decreased in value due to their age and use?

Accounts receivable record identifies the companies which credit purchases were made and the status of each account.

Current value of investments made by the owners of a business can be found in the

When a business expands....

First step of the budgeting process is to...

This ratio shows the rate of return the owner's are getting on the money they invested

Difference between actual and expected performance are

A Business Budget has two main purposes...

All of the following are private businesses that collect and publish financial information EXCEPT

All income that a business receives over a period of time is called profit.

Which type of budget is an estimate of the actual money received and paid out for a specific period?

An operating budget is usually planned for