CPS Financial Management & Budgeting Flashcards

Which financial document summarizes an organization's revenues, expenses, and net income over a specific period?

Answer: Income statement

An income statement (profit and loss statement) summarizes revenues and expenses to show net income over a reporting period.

What is petty cash typically used for in an office setting?

Answer: Covering small, miscellaneous office expenses

Petty cash is a small, on-hand cash fund used to reimburse minor expenses such as postage or office supplies without cutting a formal check.

When reconciling a bank statement, what does an 'outstanding check' refer to?

Answer: A check issued but not yet cleared by the bank

An outstanding check has been written and recorded in the company's books but has not yet been processed and cleared by the bank.

Which term describes the process of comparing internal financial records to an external statement to ensure they match?

Answer: Reconciliation

Reconciliation is the process of ensuring that two sets of records (such as a company ledger and a bank statement) agree and are consistent.

An accounts payable function primarily involves managing:

Answer: Money the company owes to its vendors and suppliers

Accounts payable refers to the short-term liabilities a company owes to its creditors and suppliers for goods or services received.

What is the primary purpose of a budget variance report?

Answer: To compare actual financial results against the planned budget

A budget variance report highlights the difference between budgeted figures and actual performance, helping management identify areas needing attention.