1. Budget and Finance Part II BCS-BE-26: The student explains the process in developing a budget. BCS-BE-27: The student analyzes the financial statements of a business and utilizes those statements to make important business decisions. BCS-BE-28: The student identifies financial aspects associated with opening a business. BCS-BE-29: The student completes records which are fundamental for any business.

2. Accounting for Business Many companies hire accounting firms to _____or audit their financial _____. accounting the systematic process of ______and reporting the financial position of a person or an ______

3. Accounting for Business An accountant maintains and ____business records. An _____is a review of accounting records and _______.

4. Accounting for Business Accounting is often called the “______of business.” Everyone involved in a _______should understand the basics of accounting.

5. Rules for Accountants Each company sets up an accounting system ______to its specific needs, but all _______follow generally accepted accounting principles (GAAP). generally accepted accounting principles (GAAP) the set of accounting rules used by accountants to prepare _______

6. Property Ownership and Control The right to own property is _____to a free enterprise _____. property anything of value that is owned or ______ Accounting provides financial information about property and rights to it.

7. Property Ownership and Control In accounting, property and ______claims are measured in ______amounts. Dollar amounts measure the cost of property and the property rights, or financial claims to the _______.

8. Financial Claims in Accounting Land and _____are examples of assets. assets property and other items of value ______by a business

9. Financial Claims in Accounting Current assets include cash, supplies, ______, and accounts receivable. current assets assets that are either used up or _______to cash during the normal cycle of the _______ accounts receivable the total amount of ______owed to a business

10. Financial Claims in Accounting Equipment and _____are examples of fixed assets. fixed assets items of _____that will be held for more than one _____

11. Financial Claims in Accounting The ______term for the financial claims to all ______is equity. equity the present value of an asset less all _____against it

12. Financial Claims in Accounting When a person or ______buys property and ______to pay for it later, they are buying on credit. The business or person selling the ______is called the creditor.

13. Financial Claims in Accounting Liabilities are measured by the amount of _______a business owes its ______. liabilities creditors’ claims to the assets of a ________

14. Financial Claims in Accounting Owner’s equity is also ______to as the owner’s _____. owner’s equity an owner’s claim to the assets of a _______.

15. The Accounting Equation The accounting equation ______that all accounting records will be _______. accounting equation a rule that ______that assets must always equal the sum of liabilities and owner’s equity

16. Graphic Organizer _____________Owner’s _____ =+ The Accounting Equation Example Company Assets: $100,000 Liabilities: $40,000 Owner’s Equity: $60,000 =+ The owner’s rights to the assets that the owner possesses.

17. Financial Statements The accounting system is ______to ______financial statements. financial statements documents that summarize the changes resulting from business ______that occur during an accounting period

18. Financial Statements Financial ______provide information that business owners use to make ______decisions.

19. Financial Statements _____, employees, _____, and investment companies use financial statements to learn about the financial conditions of a ______. Corporations must release their ______statements to the public.

20. Income Statements The income statement is sometimes called a ____and _____statement. income statement a report of the _______, expenses, and net income or net loss over an accounting period

21. Income Statements Total revenue is greater than total _______ Total ______is less than total expenses Net income Net loss $ $

22. Balance Sheet A balance sheet is like a _______of a business’s finances at a specific moment. balance sheet a report of the _____in all assets, liabilities, and owner’s equity accounts at the end of an accounting period

23. Balance Sheet The balance sheet applies the ______equation. When added up, the two sides of the equation are equal, or in ________.

24. Statement of Cash Flows Cash flows are not ______in the income ______or the balance sheet. cash flows the ______that is available to a business at any given time

25. Statement of Cash Flows The statement of cash flows helps ______ensure that the ______does not run out of money. statement of cash flows a financial report that shows ______and outgoing money during an accounting period

26. Statement of Cash Flows Lenders and investors expect _____loan _____to be able to show a consistently positive cash flow.

27. Computerized Accounting Most companies use computer ______to _______their accounting procedures because they are efficient at _______and analyzing data.

28. Figure 17.1 Income Statement Using Peachtree Software

29. Figure 17.2 Balance Sheet Using QuickBooks ® Software