Business Essentials 4.01 ACCT Review

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Finance is the business function that involves managing

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money.

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The goals of the finance function are to ensure profitability and

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reduce risks.

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Accounting is distinct from finance because its main focus is on

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recordkeeping activities.

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The administration of assets refers to decisions about

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investments.

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Decisions about financing refer to the

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acquisition of funds.

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The finance function ensures that the company’s financial goals are

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in line with organizational priorities.

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How does the finance function relate to company spending?

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It plans and controls spending.

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Money the business owes is known as

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accounts payable.

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Money owed to the business is known as

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accounts receivable.

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To keep communication flowing with other departments, the finance function depends on

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information systems.