PART 1 Flashcards
Can be defined as a point where total costs (expenses) and total sales (revenue) are equal. __________ can be described as a point where there is no net profit or loss. The firm just “_________” Any company which wants to make abnormal profit, desires to have a ________. Graphically, it is the point where the total cost and the total revenue curves meet.
Break Even Point
The amount of time it takes to recover the cost of an investment. Simply put, the ________ is the length of time an investment reaches a break-even point.
Payback Period
The level of measurable work
Productivity
A reduction in the value of an asset with the passage of time, due in particular to wear and tear.
Depreciation
Remain the same, despite changes in volume.
For example: Rent, Telephone and internet costs, Insurance, Employee Salaries, Loan Payments
Fixed Cost
Are sensitive to volume and change.
Medication is a good example. The more patients are treated, the more medication is used.
Paper medical record documentation is another example. The larger the volume of patients, the more paper is used.
Other examples are direct labor, commissions, taxes, and operational expense
Variable costs
Perks that employers give to their employees above and beyond any financial compensation.
EX: Health insurance, life insurance, tuition assistance, childcare reimbursement, cafeteria subsidies, below-market loans, employee discounts, employee stock options, and personal use of a company-owned vehicle. and so on
Fringe benefits
Difference between planned and actual financial results that is in favor of the business.
For example, if a business expected to pay around $100,000 for equipment maintenance, but was able to contract a price of $75,000, they’ll have a ________ variance of $25,000.
Favorable Variance
Difference between planned and actual financial results that is not in favor of the business.
For example, if a business expected to pay around $75,000 for equipment maintenance, but was only able to contract a price of $100,000, they’ll have an unfavorable variance of $25,000.
Unfavorable Variance
The hours you must pay an employee for, when he or she is NOT producing income for the business. Basically it’s what is typically referred to as non-billable time.
Non-productive time allowance
What months are in quarter 1 of the fiscal year?
January, February, March
What months are in quarter 2 of the fiscal year?
April, May, June
What months are in quarter 3 of the fiscal year?
July, August, September
What months are in quarter 4 of the fiscal year?
October, November, December
Liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables.
Current Ratio
Shows how much your business is in debt.
Debt Ratio
What asset is the most liquid?
Cash
Tool used to predict income and expenses of a department to get the goal. It analyzes cost and the firm’s income to meet expenses. It manages performance over time.
Offers more control over spending at the department level, allowing teams to analyze performance in a granular way. … It can also help teams spot bottlenecks much faster than they would working under one budget for the entire organization.
Departmental Budget
What is the difference in asset accounts and liability accounts?
assets put money in your pocket and are in general ledgers or and liabilities take money out and are in balance sheets or any money that you owe
Focuses on the day-to-day running of the company/expenses and it usually covers a one-year period
Operating Budget
Focus on internal investment strategy and are usually long-term, although they may be updated annually.
Capital Budget
