Financial management

Question 1

Accounting

Answer 1

Identification recording and communication a financial information

Question 2

Auditing

Answer 2

Independent reviews of accounting and financial records

Question 3

Generally excepted accounting principles GAAP

Answer 3

Provide consistency and prep and communication of financial statements

Question 4

Cash Accounting

Answer 4

Recognizes monetary transaction at time cash is received

Question 5

Accrual accounting

Answer 5

Method that recognizes revenues when earned or expenses incurred regardless of cash received

Accrual is most common

Question 6

Depreciation

Answer 6

Part of accrual accounting. Decrease in value of an asset overtime typically annually equipment company car building

Question 7

Budgets

Answer 7

Plans for operating a business to control expenses and profit against sales

Question 8

Expense

Answer 8

Cost required to purchase some thing (materials) cost to operate a business (electricity)

Question 9

Revenue/sales

Answer 9

Total money generated by sales of goods or services

Question 10

Net income or net profit

Answer 10

Financial gain after all expenses have been paid. bottom line of a financial statement

Question 11

Operating budget

Answer 11

Guide for day-to-day operations includes revenue and expense budget

Question 12

To develop an operating budget first develop sales or revenue portion of the budget

Answer 12

A. Consider changed in pricing food prices board rates at universities

B. Consider competition economy industry trends

C. Consider profit objective and projected profit

Question 13

Second part of planning operating budget

Answer 13

Budget expenditures estimates for food labor equipment repair and special projects.

Budget for labor account increases in salaries and wages, payroll taxes.

Question 14

When should capital budget be completed?

Answer 14

At the same time as operational budgets

Question 15

What is included in the capital budget?

Answer 15

Building improvements, new equipment,replacement of equipment, service maintenance, contracts expansions, repairs facilities

Question 16

Payback Period

Answer 16

Time it takes an organization recover money invested

Question 17

Cash budget

Answer 17

Estimate of the amount of money that will flow in and out of a business helps to determine if funds will be available to meet financial obligations

Question 18

Incremental budget Or traditional budget

Answer 18

Begins with existing budget give slight increase is no change or slight decrease as the various line items departments or programs

Question 19

Performance budget model

Answer 19

Less revenue and expenses by line item for each program or service and as a performance measure typically in government not-for-profit organization

Question 20

Zero based budget model

Answer 20

Every function within an organization is organized for evaluation and starts at zero needs and cost for each function or reviewed with detail Time intensive

Question 21

Flexible budget model

Answer 21

Adjust the various levels of operation or sales good for operations with Darian sales or revenues throughout the year

Question 22

Fixed budget model

Answer 22

Prepared for one level of sales or revenues if you anticipated changes throughout the year common in government and nonprofit

Question 23

Operating expenses

Answer 23

Labor supplies administrative and other general expenses

Question 24

Fixed costs

Answer 24

Cost that remain constant regardless of increases in sales or customer volume

Examples include salaried personnel rent taxes depreciation insurance

Question 25

Variable costs

Answer 25

Cost that change in direct proportion to sales volume this includes food paper products cleaning supplies hairnets facemasks

Question 26

Semi variable cost

Answer 26

Portion remains fixed and a portion changes with sales volume this includes overtime utilities or maintenance or labor

Question 27

Direct costs

Answer 27

Cost associated with a direct production of a good or service includes food and beverage direct labor costs

Question 28

Indirect costs

Answer 28

Cost not associated with direct production of a good or service Examples include utilities rent Marketing office supplies employee benefits gifts and Depreciation

Question 29

Recurring revenue

Answer 29

Based on the idea of predictability business has reasonable assurance they will receive payment regular times example monthly subscription for Netflix

Question 30

Project revenue

Answer 30

Generated through one time projects example catering operation may only work with client one time

Question 31

Service revenue

Answer 31

Sells time not good example private practice dietitian corporate wellness dietetics consultant

Question 32

Profitability

Answer 32

Primary goal of business Measured using revenues versus expenses and other possibility ratios Financial accountability I need for a company to make a profit

Question 33

Resources allocation

Answer 33

Process and strategy of an operation deciding where resources like people equipment and food Should be used in the production of goods and services Should be efficient to reach desired goals

Question 34

Balance sheet in financial statements

Answer 34

List assets or resources liabilities or debts and owners equity or owners interest is a snapshot of a given date and time

Question 35

Balance balance sheet

Answer 35

For the balance sheet to be balanced each increase or decrease in assets must be accompanied by an equal decrease in another asset or increase in liability or owners equity

Question 36

Current assets (short term)

Answer 36

Cash and all assets that will be converted into cash in a short period of time

Question 37

Fixed assets (long term)

Answer 37

Long-term permanent assets that are not intended for sale

Question 38

Accounts receivable

Answer 38

Money owed to the company from outside entities

Question 39

Debt to asset ratio

Answer 39

Financial leverage indicator if you have a 50% ratio this means 50% of each dollar has some form of debt shows ability to pay financial responsibilities

Question 40

Current liabilities

Answer 40

Obligations that must be paid within a period of one year

Question 41

Fixed liabilities or long-term liabilities

Answer 41

Obligations that will not be paid within the current year

Question 42

Owners equity

Answer 42

Retained earnings Monetary value of the company wants debts are paid off held by owners

Question 43

Income statement or Profit and loss statement

Answer 43

A report of operating results over a period of time. Focuses on revenues or money made from sales and expenses including wages rent and utilities.

Question 44

Net profit

Answer 44

Sales minus expenses

Question 45

Gross profit

Answer 45

Sales minus the cost of goods sold

Question 46

Profit margin

Answer 46

How many sense of profit the business generates for each dollar sales

Question 47

Return on assets

Answer 47

Indicate sense of profit for every dollar in assets

Question 48

Break even point

Answer 48

We’re company is not making profit or incurring any loss