finance Flashcards
What is finance in the context of business?
Finance is the life-blood of any business. It is essential for starting and successfully coordinating business activities.
Why is the availability of sufficient finances important for a business?
It is the basic rule of success for business to have sufficient finances according to the need.
What is the primary task of finance in a business?
The primary task is to provide funds needed by the enterprise on terms that are most favourable to its objectives.
What does a firm do with the capital it secures?
It employs the capital and generates returns on the invested capital.
What is the meaning of finance?
Finance refers to the management of money and the process of acquiring needed funds.
What is the meaning of business?
Business encompasses activities involved in the production, buying, and selling of goods and services.
What are the objectives of finance?
The objectives include raising capital, managing funds efficiently, and ensuring liquidity.
What are the functions of the Finance and Accounts Department?
Functions include raising funds, managing cash flow, and financial reporting.
Fill in the blank: Finance is essential for _______ and successfully coordinating business activities.
[starting a business]
True or False: Finance has no impact on the success of a business.
False
What forms of business organizations raise funds?
Different forms include sole proprietorships, partnerships, corporations, and cooperatives.
What is the organizational structure of the Finance and Accounts Department typically focused on?
It is focused on managing financial resources and ensuring compliance with financial regulations.
What is the basic aim of business finance?
Wealth maximization.
What is financial planning?
Financial planning is done keeping in view the objectives, policies, and functions of the organization by the finance department.
What is the objective of procurement of funds?
To procure funds from different sources as per the requirement.
What does the organization of finance function involve?
It involves the assignment of functions, rights, and duties of chief finance manager, controller, and keeping proper books of accounts.
What policies are related to the management of assets?
Management of fixed assets, cash policies, stock management policies, debtors realization, and payment of creditors.
What is included in the management of income?
Preparation of balance sheet, income statement, profit and loss account, and ascertainment of net profit after adjusting expenses, interest, taxes, and provisions.
What is the role of financial control?
To keep control over the financial planning of other departments by preparing capital budget, cash budget, flexible budget, etc.
How is financial performance evaluated?
Through comparative study based on last year’s results, valuation of the current year’s disposition of works using cash flow statement, ratio analysis, variance analysis, etc.
How is accounting defined?
Accounting is the science of classifying and recording various business transactions intended to be of a financial nature.
What dual nature does accounting possess?
Accounting is both a science and an art, as it involves summarizing a firm’s financial performance.
What is the primary objective of accounting related to business transactions?
To keep a systematic record of business transactions
This systematic record helps track expenses and income.
How does accounting help ascertain profit and loss?
It provides records of income and expenses during a specific time period
This allows businesspersons to make informed decisions based on actual financial results.
