Practice Prelim Flashcards
Address a deficit
Reconsider expenses - can anything be cut back such as are all employers required, find cheaper suppliers who will give discounts.
Increase sales revenue by increasing selling price or carrying out additional advertising to increase amount sold.
Offer discounts to customer who pay on time as this will encourage them to pay quickly.
Reduce level of trade credit given to customers.
Use of financial information in decision making
Look ahead and set aims and strategies. By identifying where cash is being spent and where is it being earned, management can plan to borrow, either to finance short-term cash flow problems or to finance long-term expansion.
Measures, evaluates and compares results with plans and supervises and check work is done. Gives management a tool that records quantifiable data that is the same for each department.
