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Finance LAP 7
ADescribe the role of finance and
accounting in a business organization.
Role of Finance and Accounting
Money Matters
Finance duties and accounting duties are closely interrelated
Large businesses separate these departments
Small businesses often combine them
In JA Company, they will be combined
Key differences: Finance - _________________ and
money ___________decisions
Accounting - ______________ activities
Finance and Accounting Department
Key differences:
Finance - boost ____________, reduce risks
Accounting - provide accurate and timely __________________
Finance and Accounting
Finance goals:
• Ensuring the business is __________________
• Reducing financial _____________
Finance in Business
Administration of assets (___________ ________)
Acquisition of funds (__________ _________)
Finance Activities
Helps set _______ for the future
Plans and controls company spending
Ensures sufficient financing
_______________ company money wisely
Decides whether to pay ______
Importance of Finance
Controls spending for production and ______________________
Responsible for _______________________ (collaborates with accounting)
Helps plan new projects and strategies
Relationships With Other Business Activities
Which projects to invest in—capital budgeting
How to finance—capital
• ________
• ________
Capital Investment Decisions
Whether or not to pay ________________
• When?
• How much?
• Cash or stock?
Capital Investment Decisions
What Is Accounting? What Is Accounting?
• The process of creating the following financial records:The process of creating the following financial records:
• ______statement: Shows the ___ or __________statement: Shows the ___ or ____
• ______ sheet: Balances the accounting equation ______ sheet: Balances the accounting equation (________ = _______ + _______________)(________ = _______ + _______________)
• Maintaining the following:Maintaining the following:
• Accounts _________: Money owed to othersAccounts _________: Money owed to others
• Accounts ________: Money owed to the companyAccounts ________: Money owed to the company
What Do Businesses Track with What Do Businesses Track with Accounting Information? Accounting Information?
• The value of the things they own (______)The value of the things they own (______)
• How much money they owe (________)How much money they owe (________)
• The company’s net worth (_______ ______)The company’s net worth (_______ ______)
Why Is AccountingWhy Is AccountingImportant to Businesses? Important to Businesses?
• Enables them to maintain ______________ of their Enables them to maintain ______________ of their moneymoney
• Is used to make good _________ decisions Is used to make good _________ decisions
How Does Accounting Maintain How Does Accounting Maintain Financial Control? Financial Control?
• Tracking the business’s ________________
• Planning for the __________
Chris—financial manager
• Working on a budget
• Friend in marketing wants more money
What should he do?
• Ride-go’s former CEO improperly spent investors’ money.
• Ride-go’s current CEO held a board meeting in the Bahamas.
Spent $350,000 on the “meeting”
Hired a tattoo artist, mermaids, and fire dancers
• What should Ride-go’s accountant do?
Approve payment for the trip?
Refuse to use company funds to pay for a party?
Acknowledgments
Original Developers:
Kerry Winfrey andLelia Ventling, MBAResearch
Version 2.0
Copyright © 2014MBA Research and Curriculum Center
Acknowledgments
Original Developers:
Kerry Winfrey andLelia Ventling, MBAResearch
Version 2.0
Copyright © 2014MBA Research and Curriculum Center
Digital-based photography sources:
ThinkStock Photography
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