1. what is the basic financial equation for businesses?
revenue-expenses=profit or loss
2. what are the 4 steps in preparing a business budget?
-prepare a list of each type of incomeand expense that will be part of the budget.
-gather accurate information from business records and other info sources for each type of income and expense
-create the budget by calculating each type of income, expense, and the amount of net income or loss
-explain the budget to people who need financial info to make decisions.
3. identify and describe the 3 types of budgets needed by all businesses.
-Start up budget- plans income and expenses form the beginning of a new business
-operating budget – is the money used to operate the business to continue you cash flow
-cash budget- is the actual money received and paid out of a period of time.
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