Book Keeping and Business Management Flashcards
Effective management requires that decisions be made at the
lowest level practible in the organization
executive ability can be realized to the fullest extend only when
-the executive is relieved of all unneccesary details or special work
-standards of performance are established, definete plans and plicy formulated
-adequate controls are installed, then the executive may direct his time and attention to those matters which are the exception to the normal operation
the basic principles and many techniques used by business to control operations and assist human judgement in management are applicable to
small and large businesses
where is overhead expense covered
by proper cost estimating
management should always remeber to consider each problem from
the other persons point of view
the success or failure of a business depends largely upon
the proper handling and treatemtn of personnel
a good financial policy is
cash plus goods receivable exceeed current liabilities
one of the most consisten failings of managment is in neglecting to instruct personell as to their
responsibilities and delegating adequate authority to excercise these responsibilities
the logical source from which to obtain the amount and percentage of overhead is the
income and expense statement (profit and loss statement)
when the sales volume expands, the net working capital is not enough to meet all the commitments as they become due; the contractor then tends to bid the job at cost or below cost in order to obtain capital to pay off the previous obligations and liabilities. the next thing that may happen may be
bankrupcy
a contractor who will take the neccessary time to study and apply which of the following basic principles will find himself well on the way toward establishing a sound financial policy
investment in the net fixed assets should be in proper proportion to owners equity
fixed assest are
such things as land, buildings, trucks, equipment. it is assets used to run the business and is not purchased for resale
in book keeping, fixed assets are listed as
assets on the balance sheet
fixed assets are usually shown on the balance sheet as
cost less depreciation
the most severe type of competition is between managements. businesses do not compete (t/F)
True
in bookkeeping, ratios as used extensively indicate the relationship of one number to another. the ratio is computed by dividing the first named item by the second named item (t/f)
True
some popular ratios are
cash plus goods receivable to current liabilities
the ratio of investment in net fixed assets to tangible net worth is a ratio that means it is unsafe for any business to invest too much of its capital in fixed assets (t/f)
True
as an example of the above ratio, suppose the net fixed assets are $9,500 divided by owners equity or net worth of $33,000 which would be?
28.8 ratio
the ratio of sales to the net working capital would be the dividing of annual sales by the net capital; this will show the turnover of net working capital. Too high a turnover will lead to overtrading an shows there is not enough net working capital for the sales volume (t/f)
true
the gross profit is
-net profit plus total expenses
-sales minus cost of sales
place holder
the functional areas of management include
planning and coordination
the behavioral aspects of management include
human relations and cooperation
the most difficult part of changing roles from employee to contractor (manager) may be in developing the clear understanding of what is important for successful management. Management theory has been divided into two different areas
functional and behavioral
in order to control costs, a small contractor must
schedule and coordinate the overall job
subcontractrs should be chosen on the basis of their ability to perfomr a job as well as the price that they woute. delyaed completion and unprofessional work quickly eliminate the potential savings of the lowest bid (t/f)
True
a balance sheet shows
assets, liabilities, and net worth
on a job that utilizes multiple trades, it is best to plan the total job in phases according to the trades involved. which of the following is the more complex scheduling system used in general construction
pert chart
one of the most common reasons that contractors fail is because they do not intelligently plan the jobs for several customers that they are working on at the same time. if a contractor takes the time to use one ____ chart for each job, he could then utilize his man power by comparing all of the time requirements on all of the jobs.
-critical path analysis
-percentage
as shown on an invoice for materials, the term: 2%-10th prog. net 15 means:
a 2% discount can be taken off the invoice total if paid within 10 days of billing, etc
accurate acconting records are essential for
effective management
