Business

What is a budget?

A detailed schedule that documents your expected financial inflows (revenues earned and received) and outflows (expenses incurred and paid).

What are discretionary costs?

Costs that you have control over.

What are non-discretionary costs?

Costs that you have little control over.

How do savings accounts differ from chequing accounts?

Savings accounts are interest-earning accounts.

What is the meaning of 'Pay yourself first!' in the context of saving?

Prioritize setting aside money for savings before other expenses.

What is credit?

Your ability to obtain goods and resources without immediate payment.

What is a credit score?

A numerical indicator of your creditworthiness.

List important components of a credit score.

Payment history, debt/credit ratio, length of credit use, variety of credit, new credit, and some credit checks.

What is a credit rating?

A measurement of risk; it indicates the likelihood of paying back borrowed money.

What do credit cards allow holders to do?

Make a purchase now and pay later.

List some potential drawbacks of credit cards.

They can make financial discipline hard, have high interest rates and fees, and late payments can damage your credit.

What are some details to understand in your credit card agreement?

Grace period, interest rate, late fees, and annual fees.

What are some tips for using credit wisely?

Put the credit card down when you are in trouble, do not use credit until you can control your credit habits, consistently pay a substantial amount each month toward the debt, and consider using cash or a debit card.

What is investing?

Reducing consumption in the current period in order to build wealth.

What is the key to building wealth?

Consistency and starting early.

What is compounding?

A powerful force in growing investments over time.

Name some investment options.

Common stock, preferred stock, bonds, certificates of deposit, mutual funds, and exchange traded funds.

What role does a brokerage firm play in acquiring financial assets?

Investors rely on a brokerage firm to buy/sell securities.

How does diversification affect risk?

Diversification reduces risk.

How does risk relate to potential returns?

Investments with potential high returns are usually riskier.

What is a good investment?

YOU! Devote time, effort, and money to your education, training, and health.

List the three types of good debt.

Education, appreciating assets, and investments.

What are some options when considering how to take control of your finances?

Avoid borrowing as much as possible, pay in cash, use debit card instead, and reduce your spending.

What should you evaluate when investing for retirement?

Tax advantages and company matching.

Who needs accounting information?

Managers, Shareholders, Employees, Creditors, Suppliers, Government Agencies

What are the different types of accountants?

Private accountants, Internal auditors, Public accountants, Government accountants, Forensic accountants

What is Financial accounting?

The branch of accounting that addresses the needs of external stakeholders; includes financial statements to provide broad information

What are International Financial Reporting Standards (IFRS)?

Accounting standards that are used in the preparation of financial statements to ensure that financial statements are Relevant, Reliable, Consistent, and Comparable

What are the three basic financial statements?

Balance sheet, Income statement, Statement of cash flows

What does a Balance sheet do?

Summarizes a firm’s financial position at a specific point in time

What is the accounting equation?

Assets = Liabilities + Owner’s equity

What is the purpose of an Income statement?

Summarizes a firm’s operations over a given period of time in terms of profit and loss

How is net income calculated?

Revenue – Expenses = Net income

What does the Statement of Cash Flows track?

Cash flowing into and out of the firm through Operations, Investing, and Financing

What are the three categories of cash flows?

Operating, Investing, Financing

What does the Statement of retained earnings do?

Reports how retained earnings have changed

What does the Shareholders’ equity statement do?

Reports how net income and dividend affect retained earnings

What are the key components to view with financial statements?

Auditor’s report, Notes to financial statements, Comparative statements

What type of opinion will an auditor issue?

An unqualified, qualified, or adverse opinion

What is horizontal analysis?

Uses comparative statements to identify changes in key accounts’ values over time

What is Managerial accounting?

Provides reports and analysis to managers to help them make informed business decisions

What are the responsibilities of managerial accountants?

Determining product costs, Performing incremental analysis, Developing budgets

What are Direct costs?

Can be directly traced to production.

What are Indirect costs?

Are the result of general operations.

What is Activity-based costing (ABC)?

A technique used to assign product costs based on links between activities that drive costs and the production of specific goods

What is Incremental analysis?

Evaluates the financial impact of different alternatives in a decision-making situation

What is Budgeting?

Outlines how resources will be used to meet goals

What do Operating budgets do?

Identify sales and production goals

What do Financial budgets do?

Focus on the firm’s financial objectives

What is Top-down budgeting?

Top management prepares the budget with little or no input from middle and supervisory managers

What is Bottom-up or participatory budgeting?

Allows middle and supervisory managers to actively participate in the creation of the budget

What is a Master budget?

Brings together all of the budgets to represent the overall plan

What is Management?

Achieving organizational goals through planning, organizing, leading, and controlling resources.

What are the different levels in the management hierarchy?

Top management, Middle management, First-line management

Why is employee motivation important for managers?

Motivating others to reach their best, resulting in increased productivity and job satisfaction.

What are the levels of Maslow's Hierarchy of Needs?

Physiological, Safety, Social (Belonging), Esteem, Self-Actualization

What are the key assumptions of Theory X?

Workers dislike work, fear is motivating, prefer to be directed.

What are the key assumptions of Theory Y?

Work is natural, different rewards can be motivating, can accept responsibility.

What elements are involved in creating jobs with meaningful content through Job Enrichment?

Skill variety, Task identity, Task significance, Autonomy, Feedback

What is Expectancy Theory?

Centers on the relationship among individual effort, individual performance, and individual reward.

What is Equity Theory?

Centers on how the perception of fairness directly impacts worker motivation

What is the planning function?

The function that is core to effective management; flexible to address cutthroat competition, rapid change and economic uncertainty

What are some sample questions to consider during Contingency Planning?

How should we respond if our competitors start a price war? What should we do if the government regulates our industry? How can we restart our business if a natural disaster destroys our plant? How will we evacuate employees if terrorists strike our headquarters?

What are the steps involved in strategic planning?

Define the mission, evaluate competitive position, set goals, create strategies, implement strategies, evaluate results.

Name some of the characteristics associated with Generation Y in the workforce.

Goal driven, NOW focused, Change oriented, Tech savvy, Diverse, Idealistic, Fulfillment focused

What is a Mission?

An organization’s purpose, values, and core goals, providing the framework for all other plans.

What does SWOT stand for in SWOT analysis?

Strengths, Weaknesses, Opportunities, and Threats

What is Organizing?

Logical structure for people, their jobs, and interaction.

What are the key organizing considerations?

Degree of centralization, span of control, departmentalization.

What are different ways for Departmentalization to occur?

Functional, product, customer, geographical, process.

What do staff managers do?

Provide advice and assistance (e.g., legal, accounting, HR).

What is a Line Organization?

Clear, simple chain of command.

What is a Matrix Organization?

Brings together specialists to work on projects; there is no clear chain of command.

What are the different types of Leadership Styles?

Autocratic, Democratic, Free-Rein

What do Autocratic Leaders do?

Hoard decision-making power for themselves.

What do Democratic Leaders do?

Share power with their followers.

What do Free-Rein Leaders do?

Set objectives for their followers but give them freedom to choose how they accomplish those goals.

What are the three leadership traits that go hand in hand with power and influence?

Position, Expertise, Personality

What are the steps in the Controlling process?

Establish clear performance standards, measure actual performance against standards, take corrective action if necessary.

What is Human Resource Management?

Maximizing the effectiveness of the workforce through recruiting talent, promoting career development, and boosting organizational effectiveness.

What must HR do to gain respect and recognition?

Focus on raising the value of the firm's human capital, and senior management must recognize the role of HR.

What is job analysis?

The study of jobs within an organization, including analyzing the activities an employee performs, the tools and equipment used, and the working conditions.

What is internal recruiting?

Transferring or promoting employees within the company.

What are examples of external recruiting resources?

Employment websites, newspaper ads, trade associations, colleges/universities, employment agencies, and employee referrals.

List the steps in the selection process:

Application, Interviews, Testing, References and background checks

Describe a structured interview.

Develop a list of questions prior to the interview, focusing on behaviors and experiences.

What is the STAR method?

A method to answer behavioral interview questions: Situation, Task, Action, Result.

What are contingent workers?

Temporary full-time workers, independent contractors, and on-call workers.

What are some benefits of training and development?

Increase innovation, technology adoption, productivity, motivation, and decrease liability.

What is the first step in the development process?

Effective orientations.

What is on-the-job training?

Employees begin working under the guidance of experienced employees.

What is off-the-job training?

Training that takes place away from the job setting, such as classroom training and job simulations.

What are performance appraisals?

Formal feedback to compare actual performance to the expected results, impacting compensations, incentives, promotions, transfers, and terminations.

What factors influence compensation?

Competition, Contribution, Ability to pay, Cost of living, Legislation

Define compensation.

The combination of pay and benefits, including wages, salary, and non-cash compensation.

Provide examples of pay for performance.

Commission, Bonuses, Profit sharing, Stock options, Pay for knowledge

List examples of optional benefits.

Extra paid vacation days, paid sick days, extended health care, retirement programs, and product discounts.

What are cafeteria-style benefits?

Employees are provided with a set dollar amount to spend on company benefits, tailoring them to individual needs.

List examples of flexible scheduling.

Flextime, Compressed Workweek, Telecommuting

What is Employment standards legislation?

Defines minimum workplace standards, such as hours of work and minimum wage