Midterms Flashcards
an organization that handles financial transactions for individuals, groups, and other organizations – profit, non-profit, private, or government- owned.
financial institution
what are the most common examples of financial institutions?
banks and insurance companies
a document which signifies a legal or binding agreement between two parties.
financial instrument
Financial instruments typically have __________ associated with them.
monetary values
common examples of financial instruments
checks and stock certificates
a means for the buying and selling of stocks, bonds, and other financial instruments.
financial market
common example of financial market
Philippine Stock Exchange.
a statement of projected sales, expenses, income, and other financial transactions for the coming period.
budger
a firm’s financial plan.
budget
a statement of projected sales, expenses, income, and other financial transactions for the coming period.
budget
what are a budget’s two major purpose:
- a tool for planning
- a tool for control.
Types of Budget
Operating Budget
Financial Budget
a detailed projection of all income and expenses for a given period of time, which is usually on year. period.
Operation Budget
What are the sub-budgets in the operation budgets?
- Sales budget
- Production budget
- Direct materials budget
- Direct labor budget
- Factory overhead budget
- Selling and administrative expense budget
- Income statement
shows the impact of the planned operations and capital investments on a firm’s assets, liabilities, and owner’s equity.
Financial Budget
also shows the flow of cash and other funds in the business.
Financial Budget
What are the following Financial sub-budgets?
- Cash Budget
- Statement of Financial Position
What kind of budget is the sales budget?
Operational budget
indicates the number of units a firm expects to sell.
Sales Budget
the number of units is multiplied by the selling price.
sales budget
is the determinant of all the other budgets included in the master budget.
sales budget
indicates the total cash that is expected to be collected for each period.
schedule of expected cash collection
indicates the amount of product that will have to be manufactured or produced (expected production volume)
Production budget
Formula for Production Budget
Planned Sales + Desired Ending Inventory - Beginning Inventory = Total Expected Production Volume
