Accounting Fundamentals
What is the primary purpose of accounting in a business?
To track financial transactions and assess financial performance.
Name a key financial statement used to show a business’s financial performance.
Income statement (or profit and loss statement).
What is an “information system” in the context of business operations?
A system that collects, stores, and processes data to support business activities.
What is “data” in a business context?
Facts and figures collected for analysis and used to make decisions.
What is “marketing” in a business context?
The process of promoting, selling, and distributing a product or service.
Define “financial analysis.”
The process of evaluating a business’s financial data to make informed decisions.
What does the balance sheet summarize?
A business’s financial position, showing assets, liabilities, and equity.
Give an example of how a business might use an information system.
To manage inventory, track sales, or analyze customer data.
Why is data security important in business operations?
To protect sensitive information, maintain customer trust, and comply with regulations.
List one of the four elements of the marketing mix.
Product, Price, Place, or Promotion.
What does “accounts payable” represent?
Money a business owes to suppliers or creditors.
Describe what information an income statement provides.
Details on revenue, expenses, and profit or loss over a specific period.
Describe the purpose of a management information system (MIS).
To provide managers with the information needed to make operational and strategic decisions.
Define “database” and its function in a business.
A structured collection of data that can be easily accessed, managed, and updated.
Explain the role of “promotion” in the marketing mix.
Promotion involves activities that communicate product benefits and encourage sales.
Describe what “financial records” are used for.
To document business transactions, monitor financial health, and ensure regulatory compliance.
Explain the difference between a balance sheet and a cash flow statement.
A balance sheet shows assets, liabilities, and equity at a point in time, while a cash flow statement tracks cash inflows and outflows over a period.
What role do information systems play in data management?
They organize, store, and retrieve data, ensuring accuracy and accessibility.
How does technology support data analysis in businesses?
Technology provides tools for analyzing data quickly, enabling businesses to identify patterns and insights.
Describe how marketing supports a business’s goals.
By building brand awareness, attracting customers, and generating revenue.
Explain the importance of accurate accounting for business decision-making.
Accurate accounting provides reliable data for budgeting, forecasting, and evaluating business strategies.
How do businesses use the cash flow statement to manage their operations?
To assess liquidity, ensure sufficient cash for operations, and make investment decisions.
Explain how information systems can improve business decision-making.
By providing timely, accurate data for analysis, helping to identify trends and make informed decisions.
Describe one way technology has transformed business operations.
Automation has streamlined processes, reduced errors, and improved efficiency.
How does understanding customer needs impact marketing strategies?
It helps businesses tailor products, messages, and experiences to meet those needs, enhancing customer satisfaction and loyalty.