financial reports
enable a business to analyse past performance and plan for future requirements.
- Budget
- balance sheet
- Profit and loss statement
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| Term | Definition |
|---|---|
| financial reports | enable a business to analyse past performance and plan for future requirements. - Budget - balance sheet - Profit and loss statement |
| Balance sheet | indicates the financial position of the business at a point in time (reflects financial stability). - assets - liabilities -equity |
| Assets | an item owned by the business for use within the business (cash at bank, property, equipment, land) |
| Liabilities | An amount owed by the business to other entities. - an obligation that requires an outflow or resources |
| Equity | The remaining share of the business when liabilities have been deducted from assets (profit, (loss)). |
| Budget | A financial plan that outlines expected revenues and expenditures - assists in planning for the future -budgeted balance sheet: shows changes in assets, liabilities, and equity - budgeted p/l statement: shows the income/expenses and profit/loss - budgeted cash flow statement: shows the cash inflows and outflows |
| Profit and loss statement | indicates the financial performance of the business over a period of time. - summarises the company's revenues and expenses |