Marketing and finance 2: FINANCE (Part B) Flashcards

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1
Q

Define accounting

A

a process of ID, recording, summarising and reporting economic information to decision makers in the form of financial statements

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2
Q

Define financial accounting

A

focuses on specific needs of decision makers external to the organisation, such as stockholders, suppliers, banks and government agencies

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3
Q

Define finance

A

the study of how and under what terms savings (money) are allocated b/w leaders and borrowers. Not that finance is distinct from economics in that it addresses not only how resources are allocated but also under what terms and through which channels

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4
Q

What is the accounting system?

A

a series of steps performed to analyse, record, quantify, accumulate, summarise, classify, report and interpret economic events and their effects on an organisation and to prepare the financial statements

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5
Q

What do managers want to know in terms of accounting?

A

if a new product will be profitable

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6
Q

What do owners wan to know in terms of accounting?

A

which employees are productive

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7
Q

What do investors want to know?

A

if a company is a good investment

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8
Q

What do creditors want to know?

A

if they should extend credit, how much to extend and for how long

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9
Q

What do government regulators want to know?

A

if financial statements conform to requirements

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10
Q

What are the 2 key questions of financial management and accounting?

A
  • what is the financial picture of the organisation on a given day?
  • how well did the organisation do during a given period?
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11
Q

What is a balance sheet?

A

financial picture on a given day that shows assets, liabilities, shareholder equity and net worth

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12
Q

What is a profit and loss account?

A

considers total outgoings and total income in terms of performance over a given period

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13
Q

What is a cash flow statement?

A

documents the cash (liquid asset) status of the company and its performance over a given period

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14
Q

What are the key performance indicators?

A

profit margins, sales per staff member, customer satisfaction, staff training/ CPD

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15
Q

What can yo use for benchmarking?

A
  • key performance indicators
  • costs
  • processes (quality control of customer services)
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16
Q

What business decisions are faced by vets?

A
  • new services
  • old services
  • new premises
  • more/less staff
  • different staff
  • staff training/ CPD
  • market development
  • new equipment/ capital
17
Q

What issues should be considerd with financial decision making?

A
  • costs
  • costs forgone
  • new revenue to be gained
  • short/ medium and long-term outcomes
  • market requirements
  • true boundaries of possibility
18
Q

T/F: there are many differences b/w accounting and finances

A

True

19
Q

What are the 3 major financial statements?

A
  • balance sheet
  • profit and loss statement
  • cash flow statement
20
Q

What two things are critical for good business?

A

benchmarking and decision making