This is a system within a business for converting raw data into information that will help a manager make business decisions
What is Accounting
100
This equation is the basis for the Balance Sheet?
What is Assets = Liabilities + Owners Equity
100
These demonstrate relationships that shwo the relative size of some financial quantity to another financial quantity of a firm.
What are Financial Ratios?
100
These are created from ledgers.
What are Financial Statements
100
These are things your business owns.
What are Assets?
200
This has the acronym GAAP
What are the Generally Accepted Accounting Principles
200
This is the method in which income and expenses are recorded at the time they are actually received or paid
What is the Cash-basis method
200
This involves comparing your own numbers to your numbers from last year and the year before.
What is Trend Analysis?
200
These are financial statements that project what a firm's financial condition will be in the future.
What is pro forma?
200
These are things your business owes.
What are liabilities?
300
This is where we first record every transaction.
What is a Business Journal
300
This is the method when you report your income and expenses at they time they are earned or incurred.
What is the Accrual basis method
300
This ratio comparison takes an individual firm's ratios and compares them against the standard ratios for the firms industry.
What is industry average comparison?
300
These need to be stated when preparing pro forma statements.
What are assumptions?
300
This is what you, the owner, have invested in the business.
What is owner's equity?
400
This is where Journal transactions are transfered to.
What are Ledgers?
400
This equation represents the activity describved on the Income Statement.
What is Profit = Revenue - Expenses
400
This ratio comparison takes an industry leader or major competitor, and compares them to your business.
What is Benchmarking?
400
This is one of two ways to come up with Pro Forma numbers, but is not getting them from an owner in a similar but non-competing business.
What are industry averages.
400
This is a system in which the flow of income and expenses is recorded in a running log, basically like a checkbook.
What is Single entry accounting
500
This is the last step of the accounting process.
What is the computation of key ratios.
500
This equation is the basis for the Cash Flows.
Cash Flows = Receipts - Disbursements
500
This is one of 4 important categories of financial ratios, but it is not liquidity, activity, or leverage.
What is profitabiliity.
500
List the 3 major financial Statments.
What are the balance sheet, income statment, and statement of cash flows?
500
This is a system in which every business transaction is recorded in an asset account and a liability or owner's equity account so that the system will balance.