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Quantity foods > Financial management 1& 2 > Flashcards

Financial management 1& 2 Flashcards

1
Q

what is accounting?

A

an information system that identifies, records and communicates the economic events of an organization to interested users

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2
Q

what does the accountant do?

A

identifies financial transactions;

records, classifies and summarizes the transactions;

prepares financial reports

and analyzes and interprets them for users.

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3
Q

what is the accounting formula?

A

Assets = liability + Equity

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4
Q

what are assets?

A

what the business owns

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5
Q

what are liabilities?

A

what the business owes

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6
Q

what is equity?

A

the difference between assets and liabilities

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7
Q

what is a balance sheet?

A

financial summary of the health of the business on a given date (right now)

lists assets, liabilities and equity on specific date

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8
Q

whats an income statement?

(pprofit loss statement)

A

a financial report that includes the revenue, expenses, and net income over a period of time

shows whether made or lost money

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9
Q

what happens to the debits and credits for assets?

A

debits up, credits down

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10
Q

what happens to the debits and credits for liabilities and equity?

A

debits down, credits up

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11
Q

what are the Generally Accepted Accounting Principles (GAAP)?

A

a set of standards to be used when recording financial transactions

  • distinct business entity
  • going concern
  • matching
  • monetary unit
  • materiality
  • time period
  • objectivitiy
  • cost
  • conservatism
  • consistency
  • full disclosure
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12
Q

GAAP

what is a distinct business entity?

A

a business’s financial transactions must be kept separate from those of the owners

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13
Q

GAAP

what is the going concern

A

the assumptions that the business will be ongoing indefinitely and therefore, assets are recorded at the price paid for them and the n at the replacement value

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14
Q

GAAP

what are monetary units

A

financial statements must be prepared in a specific currency (ex $CAD)

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15
Q

GAAP

what is the time period?

A

the time period of the financial statements must be reported

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16
Q

GAAP

explain cost

A

all business transactions must be recorded at their cash cost

17
Q

GAAP

explain consistency

A

a business must consistently use one system to record transactions

18
Q

GAAP

explain matching

A

expenses incurred should closely match the actual revenue those expenses generated

19
Q

GAAP

explain materiality

A

if the value of an item is not significant, then other accounting principles may be ignored if its not practical to use them

20
Q

GAAP

explain objectivity

A

there must be evidence to back up finaicial transactions reported

21
Q

GAAP

explain conservatism

A

accountants must be conservative when reporting revenue and realistic when reporting expensies and other liabilities

22
Q

GAAP

explain full disclosure

A

requires that footnotes on the finaicial statements disclose any past or future events that could affect the financial health of the business

23
Q

what do records for control do?

A

collect data on the major phases of the operation

24
Q

give some examples of records for control for purchasing and recieving

A

purchase orders
invoices
recieving records
requisitions
discrepancy reports

25
Q

give some examples of records for control for storage and storeroom records

A

requisition or storeroom issue records
perpetual inventory
physical inventory

26
Q

give some examples of records for control for food production

A
  • menu
  • standardized recipes
  • portion control standards
  • production schedule
  • leftovers report
  • forecasts
27
Q

whats a current asset?

A

cash or items that will be converted to cash soon

28
Q

whats a fixed asset?

A

land buildings, equipment

can lose or gain value over time

29
Q

how might a ratio analysis be presented?

A
  • common ratio
  • percentage
  • turnover
  • per unit basis
30
Q

managers goal should be to establish menu prices that customers will percive as:

A

good value for the price - while also making a profit

31
Q

what factors might influence pricing?

A
  • competition
  • location
  • level of service
  • type of customer
  • product quality
  • portion sizes
  • which meals are being serves
  • food and labor costs
  • desired profit margin
32
Q

explain the sales mix

A

used to determine which products are selling and which arent.

Stars: high sales, high profit (sell alot and make money)

cash cow: low sales, high profit (opportunity to increase sales)

dog: low sales, low profit (remove from menu)

?: high sales, low profit (do we keep on the menu?)

33
Q

what is the marketing approach in menu pricing?

A

menu prices are aligned with customer expectations. goal is to maximize volume and be competitive with other similar foodservice operations in the same market

33
Q

what is the cost approach in menu pricing?

A

menu pricing considers the foodservice operations costs and profit goals

34
Q

explain the food cost percentage method

A

selling price = item food cost x pricing factor

be able to calculate food cost as a percent of sales on exam

35
Q

what are fixed costs?

A

these remain constant regardless of changes in sales volume (rent, insurance)

These are also non-controllable costs

36
Q

what are variable costs?

A

these change with sales volume; increase with more sales, decrease with few sales (labour, food and bev cost)

these are controllable costs

37
Q

what are the 4 types of budgets? explain them

A
  1. master budget
    - coordinates every aspect of the opertation; a compilation of several smaller budgets, such as:
  2. operating budget
    - forecasts revenue, expenses and profit for a specified time period. Guides day to day operations
  3. cash budget
    -keeps track of cash on hand to ensure funds are available to meet financial obligations
  4. capital budget
    - long term plan for financing capital costs, such as renovating, expanding or replacing equipment
38
Q

what are the 5 phases of budget planning?

A
  1. evaluation phase
    - looks at past performance and factors that could influence future performance
  2. preparation or planning phase
    - uses info from the evaluation phase to forecast and prepare the first draft of the budget
  3. justification phase
    - review, revision and final approval of the budget
  4. implementation or execution phase
    - applies the budget to the operation functions
  5. control phase
    - ongoing monitoring to ensure operations align with budgeted predictions

Quantity foods (4 decks)

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