Principles of business chap. 12 – Flashcards
44 test answers
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true
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sales and profits for a specific period are reported in a company's income statement
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true
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assets - liabilities = owner's equity
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false
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a majority of employees in most businesses receive a weekly or monthly salary
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true
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payroll taxes consist of income taxes, social security, medicare, and unemployment taxes
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false
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the company's liabilities divided by the owners' equity is the current ratio
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true
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at the end of the period covered by a budget, the business will prepare new financial statements
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revenue is greater than expanses
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a business will make profit if
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new factories and equipment may be needed
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when a business expands,
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the business's financial records
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for long-established businesses, the main source of budget information is
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the national federation of independent business
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all of thee following are private businesses that collect and publish financial information on similar businesses and industries except
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to convince employees to take a big pay cut so the business can avoid bankruptcy
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which of the following is not generally a goal of a business budget
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prepare a list of each type of income and expanse that will be part of the budget
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the first step of the budgeting process is to
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a cash budget
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which type of budget is an estimate of the actual money received and paid out for a specific period
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operating budgets are commonly prepared for all of the above time frames
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an operating budget is usually planned for
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depreciation records
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which type of financial records identify the amount assets have decreased in value due to their age and use
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assets
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in simple terms, __ are what a company owns
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inventory
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which of the following is not a long-term asset
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net income
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total revenue - total expanses =
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six months or a year
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an income statement usually covers
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interest earned on investments
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all of the following would be considered expanses EXCEPT
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yearly
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which of the following is not a common way businesses pay employees
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a salary
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which of the following would not be considered a benefit
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FICA taxes
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employers must make matching contributions to
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earnings report or pay stub
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most businesses include an __ with the employee's paycheck; this document usually includes information for the current pay period as well as the cumulative amounts for the year
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net income ratio
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this shows how much profit is being made by each dollar of sales for the period being analyzed
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make needed adjustments to the budget
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the final step in the financial decision-making process is to
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expanses
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the costs of operating a business are called
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budget
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a detailed plan for a business's financial needs is called
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start-up
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an __ budget plans income and expanses from the beginning of a new business or a major business expansion until it becomes profitable
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operating
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an __ budget describes the financial plan for ongoing functions of the business for a specific period
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asset
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records are financial records that name the building and equipment owned by the business, their original and current value, and the amount owned if money was borrowed to purchase them
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accounts
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records of __ identify all purchases and sales made using credit
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inventory
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records identify the type and nu,her of products on hand for sale
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balance
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a company reports its assets, liabilities, and owner's equity on the __ sheet
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current
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assets include cash and those items that can be readily converted into cash
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payroll
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an __ is the financial record of employee compensation, deductions, and net pay
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self
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proprietors must pay ___ - employment taxes, which are contributions to medicare and social security
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direct
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with ___ deposit, an employer transfers net pay electronically into an employee's bank
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ratios
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financial performance ___ are comparisons of a company's financial elements that indicate how well the business is performing
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discrepency
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an ___ difference between actual and budgeting performance
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