Chapter 12

Question 1

An estimate of the actual money received and paid out for a specific period

Answer 1

Cash Budget

Question 2

The costs of operating a business

Answer 2

Expenses

Question 3

What a company owns

Answer 3

Assets

Question 4

Describes the financial plan for ongoing operations of the business for a specific period

Answer 4

Operating budget

Question 5

Differences between the actual and budgeted performance

Answer 5

Discrepancies

Question 6

Lists the business’ assets, liabilities, and owner’s equity for a specific date

Answer 6

Balance Sheets

Question 7

All income that a business receives over a period of time

Answer 7

Revenue

Question 8

Used to record and analyze the financial performance of a business

Answer 8

Financial records

Question 9

Plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable

Answer 9

Start-up budget

Question 10

The employer electronically transfers net pay into the employees bank account

Answer 10

Direct deposit

Question 11

Provides detailed plans for the financial needs of the individuals,families and businesses

Answer 11

Budget

Question 12

Reports the revenue expenses and net income or loss from business operations for a specific period

Answer 12

Income statement

Question 13

A form used to document each employee’spay history

Answer 13

Payroll record

Question 14

Comparisons of the company’s financial elements that indicate how well the business is performing

Answer 14

Financial performance ratio

Question 15

The financial records of employee compensation deductions and net pay

Answer 15

Payroll

Question 16

The value of the owners investments in the business

Answer 16

Owner’s equity

Question 17

What a company owes

Answer 17

Liabilities

Question 18

Profit or loss equation

Answer 18

Revenue expenses

Question 19

Reports that some of the financial performance of a business.

Answer 19

Financial statements

Question 20

How a company reports its assets, liabilities, and owners equity, and net profits

Answer 20

Balance sheet

Question 21

Cash and those items that can be readily converted to cash such as inventory and accounts receivable.

Answer 21

Current assets

Question 22

Assets with a lifespan of more than a year. Also known as fixed assets.

Answer 22

Long-term assets

Question 23

Amounts owed by the business to others.

Answer 23

Liabilities

Question 24

The value of the business after liabilities are subtracted from the assets.

Answer 24

Owners equity