BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Budgeting is much easier for a new business than for a well-established business. Records of accounts identify all purchases and sales made using credit. There is no point in comparing your financial statements with those of another company.

Detailed explanation-2: -A net loss occurs when a company’s expenses are higher than its total revenue. This can be a sign of problems that need to be addressed. It can, however, also happen because a company has a (relatively) short-term need for more income than it earns.

Detailed explanation-3: -Budgets are normally used only by profit-making businesses. The objectives of budgeting are (1) establishing specific goals for future operations, (2) executing plans to achieve the goals, and (3) periodically comparing actual results with these goals.

Detailed explanation-4: -A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called master budgeting.

Detailed explanation-5: -The leverage ratio category is important because companies rely on a mixture of equity and debt to finance their operations, and knowing the amount of debt held by a company is useful in evaluating whether it can pay off its debts as they come due.