L2 Flashcards
very much related to another management function, controlling.
Planning
is about setting the goals of the organization and identifying ways to achieve them.
Management planning
This maybe be broken down into
long-term plans and short-term plans.
are in form of budgets and projected financial statements.
Quantified plans
For corporations, long term and short term identify objectives. These has shown in company’s vision and mission statements.
Set goals or objectives
Resources include production capacity, human resources who will operate the operations and financial resources.
Identify resources
In this step, management must figure out how to achieve an objective.
Identify goal related task
If we identified the task to achieve goals, the next important step to do is to identify which department held accountable for this task.
Establish responsibility centers for accountability and timeline.
For corporations, the management must establish a mechanism to allow plans to monitor.
Establish an evaluation system for monitoring and controlling.
planning contingencies or unforeseen events
must be considered as well.
Determine contigency plans
is a description in quantitative usually monetary terms of desired future result.
Budget
is a prediction of the firm’s sales over a specific period, based on external and internal information.
Sales budget
is a financial planning related to the units of production that the management think that the business should produce in the upcoming period to match the estimated sales quantity,
Production budget
is a statement of the firm that has planned inflows and outflows of cash.
Cash budget
a tool of the company to set an overall goal of what the company’s performance and position will be for and as of the end of the year.
Projected financial statement
are resources you control that have resulted from past events and can provide you with the future economic benefits
Assets
your present obligations that have resulted from past events and can require you give up resources when settling them.
Liabilities
means assets minus liabilities. Other terms for equity are capital, net assets, and net worth.
The above elements are termed
Equity
because their life or usefulness continues throughout the life of the company.
Permanent accounts
usually the form used for submission to the government agencies and financial institution such banks.
Report form
All assets are found on the left side of the account and the liabilities and owner’s equity account are found on the right side of then account.
Account form
