Key Terms
This term refers to all the income a business receives.
What is revenue?
the first step in preparing a business budget
What is preparing a list of each type of income and expense?
This type of record shows all cash received and spent by the business.
What are cash records?
This is the process where funds are deposited electronically into an employee's account.
What is direct deposit?
the first step in making financial decisions for a business
What is to prepare a budget?
This type of budget is used to plan for the ongoing operations of a business.
What is an operating budget?
This type of budget is created for a new business until it becomes profitable.
What is a start-up budget?
This record type tracks the value decrease of assets over time.
What are depreciation records?
to maintain information on each employee to calculate payroll and make necessary payments
What is the purpose of the payroll system?
This helps managers identify problems before they become serious.
What is looking for discrepancies between actual and budgeted performance?
This financial document shows a business's assets, liabilities, and owner's equity.
What is a balance sheet?
the basic financial equation that guides financial planning
What is Revenue - Expenses = Profit or Loss?
to ensure accuracy and keep information up to date
What is the purpose of maintaining financial records?
Name one benefit that can be included in employee payroll.
What are vacation days, sick days, or retirement plans?
should be done after identifying discrepancies in financial performance
What is to make needed adjustments?
This term describes the costs required to run a business.
What are expenses?
to estimate the actual money received and paid out for a specific period
What is the purpose of a cash budget?
This type of record includes all purchases and sales made on credit.
What are records of accounts?
the two main types of employee payment structures
What are hourly and salary?
his term refers to the amount of money owed by a business.
What are liabilities?