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BE4.01
role of finance and nature accounting
| Term | Definition |
|---|---|
| accounting | the process of keeping and interpreting financial records |
| accounts payable | all monies owned by the business to others |
| accounts receivable | all monies owned to firm by its customers |
| acquisition of funds | finance activity involving making decisions about a firms investments |
| administration of assets | finance activity involving making decisions about a firms investments |
| assets | anything of value that a business or individual owns |
| capital budgeting | a process in which a firms financial managers determine in which projects it should invest in |
| capital investment decisions | decisions that determine in which projects a business will invest in how the in investments will be financed and whether to pay dividends to shareholders |
| capital structures | a firms mix of financing, usually some combination of debt and equality |
| cash conversion cycle | ratio that refers to the number of days between a company paying for raw materials and receiving cash from selling the products made from those raw materials |
| debt funding | using money that is lent by a bank or other institution to finance a project |
| dividend | a sum of money from investors or stockholder as earnings on an investments |
| equity funding | using money from investors to finance a project in exchange for shares in the company |
| finance | In business, the function that involves all money and money management matters |
| Financing | Funding a business activity or project through debt, equity, or venture capital |
| Return on capital | A measure of how well a business generates cash flow in relation to the capital it has already invested in itself |
| Venture capital | Invested money used for new business opportunities |
| Working capital management | Management of a firm's current balance of assets and liabilities; involves accounts payable and receivable, inventory, and cash |
| Accountant | An individual who has had specialized training in accounting procedures |
| Accounting | The process of keeping financial records |
| Accounting cycle | A process or series of steps that businesses complete to maintain their financial records effectively |
| Accounting standards | Rules that accountants must follow when preparing financial statements |
| Accounting system | The methods and procedures used in consistently handling the business's financial information |
| Accrual accounting method | A method of accounting that records transactions at the time they occur even if no money changes hands at the time |
| Assets | Anything of value that a business owns |
| Balance sheet | A financial statement that captures the financial condition of the business at the particular moment |
| Bookkeeping | the steps of the accounting cycle that involves recording each business |
| cash | currency and coins |
| cash accounting method | an accounting in which income and expenditures are recorded at the time the money changes |
| cash flow statement | a financial summary with estimates as to when, where, and how much money flow will into and out of a business |
| credit | the arrangement by which business or individuals can purchase now and pay later |
| expenditures | the monies that a business spends; also called expenses |
| expenses | the monies that a business spends; also called expenditures |
| financial accounting | a type of accounting that involves preparing and reporting financial data to external users who are not directly involved in business operations |
| financial statement | a summary of accounting information |
| income | money received by a business or an individual from outside sources |
| income statement | a financial summary that shows how much money the business had made or has lost; also called the profit and loss statement |
| investors | those who invest their funds in a business; may be owners or stockholders |
| journal | a special book or computer program in which a business's transactions are recorded in the order in which they occure |
| ledger | the accounting record for a specific department or area of the business |
| liabilities | debts that the business owes |
| managerial accounting | a type of accounting that involves preparing and reporting financial data to internal users, usually managers, who need financial decisions and plans affecting the business |
| net worth | the total value of the business |
| owners equality | the amount an owner has invested in the business plus or minus profits and loose |
| transaction | a business activity such as a sale, purchase, or return |
| trial balance | the listening of a business's different accounts and their current balances; used to check the accuracy of journal and ledger entries |
Created by:
carmen.m923
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