17.1

Question 1

financial planning

Answer 1

the process of setting financial goals and developing plans to reach them
*SMART goals
*Long-term and short-term

Question 2

revenue

Answer 2

the earnings that a business receives for the goods and services it sells

Question 3

expense

Answer 3

the costs involved in operating a business

Question 4

financial management

Answer 4

a process used to manage the financial resources of a business

Question 5

accounting

Answer 5

the system of recording business transactions and analyzing, verifying, and reporting the results

Question 6

generally accepted accounting principles (GAAP)

Answer 6

the rules, standards, and practices businesses follow to record and report financial information

Question 7

audit

Answer 7

a review of the financial statements of a business and the accounting practices that were used to produce

Question 8

business entity

Answer 8

an organization that exists independently of the owner’s personal finances

Question 9

fiscal period

Answer 9

the period for which a business summarizes accounting information and prepares financial statements: the accounting period

Question 10

budget

Answer 10

a financial plan that reflects anticipated revenue and expenses and shows how it will be allocated in the operation of the business

Question 11

sales forecast budget

Answer 11

is projected sales units and revenue dollars for the period

Question 12

sales forecast

Answer 12

prediction of future sales based on past sales

Question 13

start-up budget

Answer 13

a budget created in the planning stages for a new business information in pro forma statements created for plan

Question 14

operating budget

Answer 14

is a projection of the sales revenue that will be earned and the expenses that will be incurred during a future period

Question 15

cash budget

Answer 15

is used to estimate the amount of money coming into and out of the business

Question 16

source document

Answer 16

are records that prove a business transaction occurred

Question 17

merchandise

Answer 17

an item, or items, bought with the intention of reselling to customers

Question 18

payroll

Answer 18

is a list of all employees working for the business and their earnings, benefits, taxes withheld, and other deduction

Question 19

withholding allowance

Answer 19

is an amount of income that is not subject to income taxes

Question 20

dependent

Answer 20

is an individual who relies on someone else for financial supports

Question 21

employee’s earnings record

Answer 21

is an individual record maintained for each employee

Question 22

payroll register

Answer 22

a summary of the earnings, payroll deductions, and net pay for all employees recorded for each payroll period

Question 23

gross pay

Answer 23

the amount of income earned before taxes and other deductions are withheld.

Question 24

account

Answer 24

is an individual record that summarizes information for a single category

Question 25

chart of accounts

Answer 25

a list of all accounts in the business

Question 26

double-entry accounting

Answer 26

recording the debt and credit parts of a transaction

Question 27

journal

Answer 27

a form used to record business transactions in chronological order

Question 28

journalizing

Answer 28

the process of recording business transactions in a journal

Question 29

ledger

Answer 29

a group of accounts

Question 30

posting

Answer 30

the transfer of information from journals to the ledger