Finance past paper questions Flashcards
Describe the purpose of preparing a Statement of Financial Position.
Shows the assets and liabilities of a business
show how much the business is worth at a particular time
can be used to compare with previous years
to provide information for decision making
can be used to calculate ratios
shows the work equity figure
Explain the purpose of preparing a cash budget.
A cash budget will highlight a deficit. This means it will give the organisation time to arrange finance and find a solution
a cash budget will highlight a surplus. This means it will give the organisation time to arrange investments
to give departments a budget to focus on. this means it will help the business stay within the budget which is predicted.
to make comparisons between predicted and actual figures. this means the performance of the business can be monitored
will monitor spending throughout the organisation. This means it will ensure the organisations finances are used effectively
Explain the use of technology by the finance department
Spreadsheet can be used to produce graphs and charts. this means it is easy to identify any changes in profits over a period of time
By using spreadsheet the formulae used can be replicated. this means time is saved where the employee can be doing something else
word can be used to produce financial reports for shareholders. tis means that shareholders can get all the information they need in an easy to read format
Describe how an organisation could improve their liquidity
use just in time stock management
increase their current assets
reduce their current liabilities
reduce theft or breakages of stock
