Ch. 11
all activities involved in transforming a product idea into a finished product, as well as those involved in planning and controlling the systems that produce goods and services
operations management
parties who are interested in the activities of the business because they're affected by them
stakeholders
uniform set of rules for financial reporting issued by an independent agency called the Financial Accounting Standards Board (FASB)
Generally Accepted Accounting Principles (GAAP)
is thus the application of financial principles to the monetary decisions that you make, either for your individual benefit or for that of your family.
Personal finance
all manufacturers perform the same basic function: to transform resources into finished goods
manufacturing
system for measuring and summarizing business activities, interpreting financial statements, and communicating the results to management and other decision makers
accounting
financial statement summarizing a business's revenues, expenses, and net income
income statement
is the ongoing process of managing your personal finances to meet goals that you've set for yourself or your family.
Financial planning
production method in which products are made to customer specification
make-to-order strategy
provides information to decision makers inside the organization to help operate the business
management accounting
amount of money earned by selling products to customers
revenues
is a home loan pegged to the increase or decrease of certain interest rates that the lender has to pay.
adjustable-rate mortgage (ARM)
production method in which high volumes of products are made at low cost and held in inventory in anticipation of future demand
mass production (make-to-stock strategy)
furnishes information to individuals and groups inside/outside the organization to assess the firm's financial performance
financial accounting
costs incurred by selling products to customers
expenses
is the risk that poor management of an organization with which you're dealing may adversely affect the outcome of your personal-finances planning.
Management risk
management of inventory to ensure that a company has enough inventory to keep operations flowing smoothly but not so much that money is being wasted in holding it
inventory control
financial reports- including the income statement, the balance sheet, and the statement of cash flows- that summarize a company's past performance and evaluate its financial health
financial statements
accounting tool showing the resources of a business (assets) and the claims on those resources (liabilities and owner's equity)
accounting equation
1.Monetary or liquid assets include cash, money in checking accounts, and the value of any savings, CDs, and money market accounts. They're called liquid because either they're cash or they can readily be turned into cash.
2.Everything else is a tangible asset—something that can be used, as opposed to an investment.
2 Types of Assets