Question

Name five (5) pieces of accounting information that would be used by the School of Management when preparing a budget.

a) Income, Expenses, Assets, Liabilities, Profit
b) Revenue, Expenditure, Accounts Receivable, Accounts Payable, Net Income
c) Cash Flow, Depreciation, Equity, Capital, Operating Costs
d) Budgeted Sales, Cost of Goods Sold, Gross Profit, Operating Expenses, Net Income

Answer 1

The School of Management needs to consider Revenue, Expenditure, Accounts Receivable, Accounts Payable, and Net Income when preparing a budget as these provide a comprehensive financial overview for effective management.

Step-by-step explanation:

When preparing a budget, the School of Management would likely consider the following accounting information: Revenue, Expenditure, Accounts Receivable, Accounts Payable, and Net Income. These components are essential as they provide a comprehensive overview of the financial performance and expectations of the school. Revenue is the income generated from the school's activities, while expenditure represents the costs involved in running the school. Accounts Receivable tracks money owed to the school, such as tuition fees due, and Accounts Payable represents the school's obligations to pay vendors and service providers. Finally, Net Income is the bottom line, indicating the school's financial health after subtracting expenses from revenues.