Lecture 7a and 7b Flashcards
(24 cards)
What is the first step in the process of financial statements?
The process of financial statements goes through the trial balance.
What are the two types of items identified after the trial balance?
IS (Income Statement) and FP (Financial Position) items.
What is calculated after identifying IS and FP items?
Adjustments with dual effects.
What does ‘Sales’ represent?
IS (Income Statement).
What does ‘Inventory’ represent?
IS.
What does ‘Purchases’ represent?
IS.
What does ‘Electricity’ represent?
FP (Financial Position).
What does ‘Vehicles’ represent?
FP.
What does ‘Equipment’ represent?
FP.
What does ‘Bank’ represent?
FP.
What does ‘Wages’ represent?
IS.
What does ‘Trade Payables’ represent?
FP.
What does ‘Interest on Loans’ represent?
IS.
What does ‘Trade Receivables’ represent?
FP.
What does ‘Rent’ represent?
IS.
What does ‘Insurance’ represent?
IS.
What does ‘Long Term Loans’ represent?
FP.
What is a budget?
A detailed plan for the use of financial and other resources over a specific period of time.
What does the Master Budget represent?
A comprehensive expression of management’s plan for the future and how to accomplish them.
What does planning involve?
Developing objectives and preparing various budgets to achieve these objectives.
What does control involve in budgeting?
Steps taken by management that attempt to ensure objectives are attained.
What is one advantage of budgeting?
You can define goals and objectives.
Fill in the blank: A budget allows you to ______ for the future.
think and plan.
Fill in the blank: Budgeting allows you to allocate ______.
resources.
