chapt 17.1

Question 1

financial planning

Answer 1

is the process of setting financial goals and developing plans to reach them

Question 2

revenue

Answer 2

is the earning that a business receives for the goods and services it sells

Question 3

expense

Answer 3

are the costs involved in operating a business

Question 4

financial management

Answer 4

is a process used to manage the financial resources of a business

Question 5

accounting

Answer 5

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

Question 6

generally accepted accounting principles

Answer 6

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

Question 7

audit

Answer 7

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

Question 8

business entity

Answer 8

is an organization that exists independently of the owners personal finaces

Question 9

fiscal period

Answer 9

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

Question 10

budget

Answer 10

is 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 the projected sales unit 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

Question 14

operating budget

Answer 14

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 going out of the business

Question 16

source document

Answer 16

are records that prove a business transaction occurred

Question 17

sale on account

Question 18

purchase on account

Question 19

merchandise

Answer 19

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

Question 20

payroll

Answer 20

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

Question 21

withholding allowance

Answer 21

an amount of income that is not subject to income taxes

Question 22

dependent

Answer 22

an individual who relies on someone else for financial support

Question 23

employees earnings record

Answer 23

is an individual record maintained for each employee

Question 24

payroll register

Answer 24

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

Question 25

gross pay

Answer 25

amount of income earned before taxes and other deductions are withheld

Question 26

account

Answer 26

is an individual record that summarizes information for a single category

Question 27

chart of accounts

Question 28

doubt entry accounting

Answer 28

recording the debit and credit parts of a transaction is called double entry accounting

Question 29

journal

Answer 29

a form used to record business transactions in chronological order

Question 30

journalizing

Answer 30

the process of recording business transactions in a journal

Question 31

ledger

Answer 31

a group of accounts

Question 32

posting

Answer 32

the transfer of information from journals to the ledger