The Role of Accounting
The recording, classifying, summarizing, and interpreting of financial events and transactions that affect an organization.
What is Accounting?
This reports how a firm handles the flow of cash coming into and out of a business.
What is the Statement of Cash Flows?
The people who examine financial data prepared by accountants and recommend strategies to improve the financial performance of the firm.
What are financial managers?
Their responsibilities include paying the company's bills at the appropriate time, collecting overdue payments, analyzing tax implications, and checking financial statements to make sure all transaction follow GAAP.
The function of the business that acquires funds for the firm and manages them within the firm.
What is Finance?
Financial management is the job of managing of a firm's resources to meet its goals and objectives.
Name at least one type of information available to businesses today.
What is -
1) business process information, 2) physical-world observations, 3) biological data, 3) public data, and 5) data that indicates personal preference or intention.
A main difference between bookkeeping and accounting.
What is - bookkeeping is the systematic recording of data. Accounting includes classifying, summarizing, interpreting, and reporting data to management?
Net profit or loss is also referred this this term.
What is the bottom line?
How might a manager of finance carry out financial planning?
What is by analyzing short-term and long-term money flows to and from the firm. Its overall objective is to optimize the firm's profitability and make the best use of its money. It has three steps: 1) forecasting, 2) developing budgets, and 3) establishing financial controls?
Name one (1) of the most common reasons a firm fails financially.
What is -
1. Undercapitalization (insufficient funds to start the business).
2. Poor control over cash flow.
3. Inadequate expense control.
Identity theft
What is the obtaining of individuals personal information, such a SSN and credit card numbers, for illegal purposes.
Bookkeepers summarize journal entries by posting them here.
What is the ledger?
What is the Income Statement?
This is a document that sets forth management's expectations for revenues and, on the basis of those expectations, allocates the use of specific resources throughout the firm.
What is a budget?
This is the process in which a firm periodically compares its actual revenues, costs and expenses with its budget. Usually there are monthly reviews and corrective action is taken when necessary.
What is financial control?
Name two of the four characteristics of information that make it useful.
What are -
1 - quality
2 - completeness
3 - timeliness
4 - relevance
The first place bookkeepers record transactions.
What is a journal?
State the Accounting Equation.
What is Assets = Liability + Equity?
The title of the executive in charge of the financial operation of the business.
What is CFO?
Name two things that would be included in a budget.
What are income and expenses?
A group of connected devices in one physical location, such as a home or office.
What is a LAN or local area network.
WAN - wide area network extends over a large geographic area and connects individual users or multiple LANs.
Two (2) of the steps in the accounting cycle.
What is (1) analyzing documents; (2) recording information into journals; (3) posting that information into ledgers; (4) developing a trial balance; (5) preparing financial statements; (6) analyzing financial statements?
An Asset.
What is an economic resource (thing of value) owned by a firm?
A financial manager would look at this item on the balance sheet to tell them what the business has of value that is relatively permanent.
What is fixed assets?
Name at least two needs for operating funds.
What are -
1. Managing day-to-day needs of the business.
2. Controlling credit operations.
3. Acquiring needed inventory.
4. Making capital expenditures.
The use of data analytic tools to analyze an organization’s raw data and derive useful insights from them.
What is Business intelligence (B I) or analytics?
Stockholders, bondholders and banks, labor unions, employees, and the IRS?
The financial statement that reports a firm's financial condition at a specific time.
What is the Balance Sheet?
Equity Financing
What is money raised from within the firm, from operations or through the sale of ownership in the firm (stock or venture capital).
Debt financing refers to funds raised through various forms of borrowing that must be repaid.
Name and describe one source of short-term financing.
What is -
Trade Credit (by now, pay later), Family and Friends, Commercial Banks (secured loan, unsecured loan, or line of credit), Factoring (selling account receivable for cash), Commercial Paper (unsecured promissory notes, in amts of >$100k, that mature or come due in 270 days or less), and Credit Cards.
The effect information technology had on business management.
What is - eliminate some middle-management functions and flatten organizational structures. Allow employees to work from home. On the negative side, allow info to fall into the wrong hands. Enable privacy concerns.