Financial Management Mid Term Exam Study Review[2]

Financial Management Mid Term Exam Study Review[2] -...

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Accounting – The process of recording, classifying and summarizing financial transactions. FASB - is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States in the public's interest. Sets federal accounting standards subject to the approval Accounting Cycle – Series of steps in recording an accounting event from the time a transaction occurs to its reflection in the financial statements. 1. Daily transactions and source documents, 2. Books of original entry 3. Books of final entry Trial Balance – A printed document that is logged by a business each time cash is received for a good or service . At the end of each accounting period, a trial balance is prepared to check the accuracy of the ledger account balances Budget – An itemized summary of estimated or intended expenditures for a given period along with proposals for financing them. Budget Cycle – 1. Budget preparation 2. Governing board approval 3. Budget Execution Line-Item Budget - Budget in which the individual financial statement items are grouped by cost centers or departments . The accounting tool can be created to reflect year over year differences between same expenditure types or to reflect the difference between budget and expenses for a single year. You can also use the accounting tool to calculate and monitor accrued or projected expenses Performance budgets - use statements of missions, goals and objectives to explain why the money is being spent. It is a way to allocate resources to achieve specific objectives based on program goals and measured results.” Purchase controls – Procedure that entail authorization… signatures… traceability. Who authorized it?
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