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18 Cards in this Set
- Front
- Back
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what are the 2 purposes of business budget?
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to anticipate sources and amounts of income and to predict the types and amounts of expenses for a specific business activity or the entire business
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the most important step in financial planning
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developing a budget
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plans income and expenses from the beginning of the business until it becomes profitable
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start-up budget
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describes the financial plan for the day-to-day operations of the business
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operating budget
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an estimate of the actual money received and paid out for a specific time period
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cash budget
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what skills are required when preparing the business budget?
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financial information, computer skills, basic math skills, effective communications skills
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list all cash receipts and disbursements
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cash records
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identify all credit purchases and sales
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records of accounts
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identify the type and quality of products available for sale
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inventory records
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contain information on al lemployees of the company and their earnings
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payroll records
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identify the buildings and equipment owned by the business, their original and currnet value, and the amount owed if money was borrowed to purchase the assets.
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asset records
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steps in the budget process
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1. prepare a list of each type of revenue and expenses that will be a part of the budget
2. gather information 3.create the budget using computer 4. show and explain the budget to ppl |
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reports that summarize the financial performance of a business
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financial statements
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what are the 2 most used financial statements?
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balance sheet, and income statement
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list the assets, liabilities, and owner's equity
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balance sheet
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reports the revenues, expenses, and net income or loss from business operations for a specific period
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income statement
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derive when income is greater than expenses
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net income
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when expenses is greater than income
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net loss
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