Starting a Business
3 examples of operating expenses
Payroll, Rent, bills, Bank fees, License renewal.
Who can manage financial records for a company?
Owner, qualified employee, Hired professional.
Accounting
Collecting, recording, and reporting financial transactions.
Accounting is often called the language of what?
An audit is a collection, recording, and reporting of financial transactions.
F
The man reason start-up money can be hard to obtain is because
There is no track record of whether or not the venture will be successful.
A plan for the amount the business owner spends on a daily, weekly, or monthly basis is a(n)
Cash budget
Audit
Review of accounting records and procedures.
A budget can help control what?
Spending
A financial plan can be used to attract investors.
T
3 examples of start up expenses
Assets, remodeling costs, security deposit, Supplies, Legal permits/Licenses
The Debts of a company are called
Liabilities
Accounting equation
Assets=Liabilities+Owner's equity
An income statement is sometimes called
A financial plan explains how a business will manage its records.
T
Summarized information about the financial status of a business
Bank statement
Financial reports
Money order
Net worth
Financial Reports
What does GAAP Stand for?
Generally accepted accounting principles
Financial Plan
Document that Projects future income, sees if there is enough money to start the business, describes assets that are needed to start the business.
What is the difference between fixed assets and current assets.
Fixed=Owned more than a year
Current=Sold within a business cycle
A cash budget is a plan for the amount expected to be spent and earned over a given period of time.
F
Why is unplanned growth not always a good thing for a business?
Can be chaotic
Why is a cash flow statement important?
To see where the business is spending and making money
Owner's equity
Owner's claim to the assets of the business
What is the difference between accounts payable and accounts receivable?
Payable=liability to creditors
Receivable= customer invoice/debt to the business
Everyone involved in a business should understand some of the basics of accounting.
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