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PHA 617 > Financial Management > Flashcards

Financial Management Flashcards

1
Q

What are the three financial statements?

A

Income statement
Balance sheet
Cash flow statement

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2
Q

The art and science of gathering, collecting, classifying, summarizing, and closing entries or reports of a financial statement.

A

Accounting

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3
Q

The accounting system

A

People make decisions
⬇️
Business transaction occur
⬇️
Prepare reports to show the results of business operations

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4
Q

It is the analysis and interpretation of bookkeeping records

A

Accounting

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5
Q

Apart from revealing the level of performance, it throws light on the causes of weakness and deviation from plans.

A

Accounting

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6
Q

May use accounting information to manage their routine affairs like operating and managing their bank accounts to evaluate the worthwhileness of a job in an organization, to invest money, to rent a house, etc.

A

Individuals

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7
Q

They set goals, evaluate progress, and initiate corrective action in case of unfavorable deviation from the plan course of action.

A

Business managers

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8
Q

The ability of the company to pay for the short term by selling assets

Ease of converting it to cash

Short term ability to pay

A

Liquidity
Liquid Assets

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9
Q

Stability of the company for long-term loans

Ability of the company to meet its long-term debts and other financial obligations

One measure of a companies financial health because it demonstrates the ability to manage operation into the foreseeable future

A

Solvency

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10
Q

They are keen to evaluate the profitability and solvency of a company before they decide to provide money to the organization

A

Investors and creditors

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11
Q

They are charged with the responsibility of guiding the socioeconomic system of a country in such a way that it promotes the common good

A

Government and regulatory agencies

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12
Q

It is the language of financial decisions

A

Accounting

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13
Q

Two branches of assets

A

Current assets and fixed assets

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14
Q

This is any property owned by the company that can be consumed so converted to cash in a period of 12 months or during the accounting period

A

Current assets

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15
Q

Assets owned by the company that cannot be sold converted to cash during the accounting period.

A

Fixed Assets

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16
Q

Examples of fixed assets

A

Land
Building
Equipment
Intangibles like patent copyright and trademark

17
Q

Examples of current assets

A

Account cash
Accounts receivable

18
Q

Two types of accounting period

A

Calendar year
Fiscal year

19
Q

Payables that can be paid or settle during the accounting period or 12 months

A

Current liabilities

20
Q

Payables beyond 12 months

A

Long-term liabilities

21
Q

Equity two branches

A

Income and expenses

22
Q

Anything of use in the future operations of the enterprise and belonging to the enterprise

A

Assets

23
Q

In a broader sense, the term refers to total claims against the enterprise

A

Equity

24
Q

Equity is also known

A

Capital

25
Q

Equity can be further divided into two categories

A

Owners claim - capital

Outsiders claim- liability

26
Q

Formula for equity or capital

A

Assets - liability = equity

27
Q

The excess of assets over liabilities of the enterprise.

It is the difference between the total assets and the total liabilities of the enterprise.

A

Capital

28
Q

Amount owed by the enterprise to the outsiders

A

Liability

29
Q

Monetary value of the product of services sold to the customers during the period.

It results from sales, services, and sources like interest, dividend, and commission.

A

Revenue

30
Q

Expenditure incurred by the enterprise to earn revenue.

A

Expense or cost

31
Q

It is the amount deducted from the equity

A

Expenditure

32
Q

Money or value of goods belonging to the business used by the proprietor for his personal use

A

Drawings

33
Q

The person who invested his money or moneys worth, and bears the risk of the business

A

Owner

34
Q

A person from whom amounts are due for good sold or services rendered or in respect of a contractual obligation

It is also known as debtor, trade debtor, accounts receivable.

A

Sundry debtors

35
Q

It is an amount owed by the enterprise on account of goods purchased or services rendered or in respect of contractual obligations

A

Sundry creditors

PHA 617 (10 decks)

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