chp. 17.1 Flashcards
Financial planning
the process of setting financial goals and developing plans to reach them
revenue
earnings that a business receives for the good and services it sells
expense
cost that involves in operating a business
financial management
process used to manage the financial resources of a business
accounting
the system of recording business transaction and analyzing verifying and reporting the result
generally accepted accounting principles
rules, standards and practices businesses followed to record and report financial information
audit
review of the financial statement of a business and the accounting practices that were produce to produce them
business entity
organization that exits independently of the owners personal finances
fiscal period
period which a business summarizes accounting information and prepares financial statements
budget
financial plans that reflect anticipated revenue and expenses
sales forecast budget
projected sales units and revenue dollars for the period
sales forecast
prediction of future sales based on past sales
start-up budget
budget created in the planning stage for a new business. information in pro forma statement created for business plan
operating budget
projection of the sales revenue that will be earned and the expenses that will be incurred during future period
cash budget
used to estimate the amount of money coming into and going out of the business
source document
records that prove a business transaction occurred
sale on account
Partial payment of an amount owed
purchase on account
Goods or services are received, but immediate payment is not made.
merchandise
in item or items bought with the intention of reselling to costumers
payroll
largest expense for business
withholding allowance
is amount of income that is not subject to income taxes
dependent
individual who relies on someone else for financial support
employee earnings record
individual record maintained for each employee
payroll registers
summary of the earning payroll deducting and net pay for all employee recorded for each pay roll
gross pay
amount of income earned before taxes and other deduction
account
individual record that summarizes information for a single category
chart of accounts
list of all accounts in the business
double entry accounting
recording the debt and credit parts of transaction
journal
a form used to record business transaction in chronological order
journalizing
the process of recording business transaction journal
ledger
a group of accounts
posting
transfer all information from journals to the leadger
