The Finance Function Flashcards Preview

CIMA E1 > The Finance Function > Flashcards

Flashcards in The Finance Function Deck (14):
1

What are the qualities of good accounting information? CCCRROT

Relevance
Comprehensibility
Reliability
Completeness
Objectivity
Timeliness
Comparability

2

What are the different types of accounting?

Financial Accounting - Routine accounting, providing reports, cashier duties
Management accounting - cost, budgets, financial management of projects
Treasury - Raising funds, cash flow control, investments
Internal Audit - preventing fraud, following regulations

3

Define: Financial Accounting

A method of reporting the results and financial position of a business in its financial statements

4

Earnings per share formula

Profit after tax (less preference shares) / Weighted average of ordinary shares in issue

5

Price per earnings ratio

Share price / Earnings per share

6

Dividends yield formula

Dividends per share / Current share price x 100

7

What is in a cost card?

Direct material costs
Direct labour
Variable costs
Fixed overheads

8

Why are budgets used? CRUMPET

Co-ordination
Responsibility
Utilisation
Motivation
Planning
Evaluation
Telling

9

What are the main roles of a treasurer?

Working capital management
Funds management
Currency management
Corporate finance
Tax management

10

Gearing ratio formula

Long term debt / shareholder funds x 100

11

What are the different types of tax processes?

Tax avoidance - legal but not in the spirit of the law
Tax evasion - illegal
Tax mitigation - Legal and in the spirit of the law

12

What are the two types of conflict?

Interdependent - eg, all finance works together as each are is dependent of each other.
Independently - eg. The audit team needs to work separately from the finance team to ensure work is being done correctly.

13

Define: BPR

Business Process Re-engineering
Is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed

14

What are hammer and Champy's four themes of BPR

Process Reorientation - Focus on resources, tasks and constraints
Creative use of IT - Should be explored
Ambition - Do be restricted
Challenge and break the rules