17.1 n' .2

Question 1

financial planning

Answer 1

process of setting financial goals and developing plans to reach them

Question 2

revenue

Answer 2

is the earnings that a business receives for the goods and services it sells

Question 2

expense

Answer 2

are the costs involved in operating a business

Question 3

financial management

Answer 3

Process used to manage financial resources of business

Question 4

accounting

Answer 4

system of recording business transaction and analyzing, verifying, and reporting results

Question 5

generally accepted accounting principles (GAAP)

Answer 5

rules, standards, and practice businesses follow to record and report financial information

Question 6

audit

Answer 6

review of financial statement of a business and accounting practices that were used to produce them.

Question 7

business entity

Answer 7

organization that exists independently of owners personal finances

Question 8

fiscal period

Answer 8

the period for which business summarizes accounting info and prepares financial statements, the accounting period

Question 9

business budget

Answer 9

financial plan that reflects anticipated revenue and expenses and show how it will be allocated in operation of business

Question 10

sales forecast budget

Answer 10

projected sales unites and revenue dollars for priod

Question 11

sales forecast

Answer 11

prediction of future sales based on past sales

Question 12

start-up budget

Answer 12

budget created in planning stages for new business

Question 13

operating budget

Answer 13

is projection of the sales revenue that will be earned and expenses that will be incurred during future period

Question 14

cash budget

Answer 14

is used to estimate the amount of money coming into and going out of business

Question 15

withholding allowing

Answer 15

is amount of income that is not subject to income taxes

Question 16

merchandise

Answer 16

an item, or items, bought with the intention of reselling to customers

Question 17

payroll

Answer 17

list for employees working for the business and their earnings, benefits, taxes withheld, and other deductions

Question 18

source documents

Answer 18

are records that prove business transaction occurred

Question 19

dependent

Answer 19

is an individual who relies on someone else for financial support

Question 20

employees earning record

Answer 20

is an individual record maintained for each employee

Question 21

payroll register

Answer 21

summary of earnings, payroll deductions, and net pay for all employees recorded for each payroll period

Question 22

gross pay

Answer 22

amount of income earned before taxes and other deductions are withheld

Question 23

account

Answer 23

is an individual record that summarizes information for a single category

Question 24

chart of accounts

Answer 24

list of all accounts in business

Question 25

double entry accounting

Answer 25

recording debit and credit parts of a transaction is called

Question 26

journal

Answer 26

is a form used to record business transaction in chronological order

Question 27

journalizing

Answer 27

is the process of recording business transaction in journal

Question 28

ledger

Answer 28

group of accounts

Question 29

posting

Answer 29

transfer of information from journal to ledger

Question 30

accounting cycle

Answer 30

is the sequence of steps businesses follow to record, summarize, and report financial information

Question 31

stakeholder

Answer 31

people with interest in the businesses

Question 32

balance sheet

Answer 32

reports the assets, liabilities, and owner's equity

Question 33

cash flow statement

Answer 33

reports how cash moves into and out of a business

Question 34

income statement

Answer 34

reports business revenue and expenses for a specific period; shows net income or net loss

Question 35

financial ratio

Answer 35

evaluate overall financial condition of business by showing relationships between selected figures on financial statements

Question 36

working capital

Answer 36

difference between assets and current liabilities

Question 37

current asset

Answer 37

is cash or any asset that will be exchanged for cash or used within 1 year

Question 38

current liability

Answer 38

is a short-term debt that must be paid within 1 yearr

Question 39

current ratio

Answer 39

show relationship of current assets or current liabilities

Question 40

debt ratio

Answer 40

shows percentage of dollars owed compared to assets owned

Question 41

net profit ratio

Answer 41

illustrated how much profit is generated per dollar of sales

Question 42

operating ratio

Answer 42

shows relationship of expense to sales