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Questions and Answers
What is the primary purpose of a budget in an organization?
What is the primary purpose of a budget in an organization?
What is a budget, according to the definition?
What is a budget, according to the definition?
What is the primary purpose of a cash budget in a pharmacy?
What is the primary purpose of a cash budget in a pharmacy?
What is the main objective of budgeting?
What is the main objective of budgeting?
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What type of budget focuses on daily activity revenues and expenses?
What type of budget focuses on daily activity revenues and expenses?
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What is the main function of accounting according to the AICPA?
What is the main function of accounting according to the AICPA?
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What is the primary purpose of a master budget?
What is the primary purpose of a master budget?
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What is the main purpose of financial statements?
What is the main purpose of financial statements?
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What is the purpose of a capital budget?
What is the purpose of a capital budget?
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What is the main difference between a capital budget and a cash budget?
What is the main difference between a capital budget and a cash budget?
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What is the primary purpose of a master budget?
What is the primary purpose of a master budget?
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What is the importance of accounting principles in financial reporting?
What is the importance of accounting principles in financial reporting?
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What is one of the purposes of budgeting systems?
What is one of the purposes of budgeting systems?
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What is the primary objective of budgeting in an organization?
What is the primary objective of budgeting in an organization?
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What are accounting principles?
What are accounting principles?
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What is one of the benefits of budgeting systems?
What is one of the benefits of budgeting systems?
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What is the primary purpose of financing activities in a pharmacy setting?
What is the primary purpose of financing activities in a pharmacy setting?
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Which of the following is NOT a type of activity that a pharmacy engages in?
Which of the following is NOT a type of activity that a pharmacy engages in?
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What is the main purpose of a balance sheet?
What is the main purpose of a balance sheet?
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When can a pharmacy prepare a balance sheet?
When can a pharmacy prepare a balance sheet?
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What is the primary focus of conducting a profitable operation in a pharmacy setting?
What is the primary focus of conducting a profitable operation in a pharmacy setting?
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What type of investments does a pharmacy make?
What type of investments does a pharmacy make?
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What is the primary goal of a pharmacy?
What is the primary goal of a pharmacy?
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What are the three fundamental activities that a pharmacy engages in?
What are the three fundamental activities that a pharmacy engages in?
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Study Notes
Financial Management in Pharmacy Practice
- A budget is a critical step in planning any economic activity, and it is a key tool for planning, control, and decision making in virtually every organization.
- A budget is a detailed plan, expressed in quantitative terms, that specifies how resources will be acquired and used during a specified period of time.
Types of Budgets
- Master budget: a comprehensive set of budgets covering all phases of a pharmacy organization's operations for a specified period of time.
- Cash Budget: shows expected cash receipts and planned cash disbursements to pay the bills incurred by the pharmacy.
- Operational budget: focuses on daily activity revenues and expenses, such as sales, cost of goods sold, and operating expenses.
- Capital budget: a financial plan that outlines a company's long-term investments in assets such as buildings, equipment, and technology.
Purposes of Budgeting Systems
- Planning: determines the pharmacy's goals and objectives.
- Allocating resources: determines how resources will be used to achieve the pharmacy's goals and objectives.
- Controlling and operations: ensures that the pharmacy's operations are running efficiently and effectively.
- Profit performance: evaluates the pharmacy's financial performance.
- Evaluating: provides a basis for evaluating the pharmacy's performance.
- Facilitating communication and coordination: provides a framework for communication and coordination among different departments and teams.
Accounting
- Accounting is a service activity that provides quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.
- Accounting principles are the rules and guidelines that companies, and other bodies must follow when reporting financial data.
Accounting Principles
- Obtaining financing: acquiring assets and financing activities to acquire assets involve obtaining funds from owners and creditors.
- Making investments: depends on the type of business being conducted.
- Conducting a profitable operation: includes purchasing, distribution, clinical activities, and administration.
Three Essential Financial Statements
- The Balance Sheet: provides a snapshot of an organization's assets, liabilities, and shareholder equity at any particular point in time.
- The balance sheet shows the organization's financial position at a specific point in time.
- Other financial statements include the Income Statement and Cash Flow Statement.
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Description
This quiz covers financial management principles and their application in pharmacy practice, including budgeting and financial statement analysis.
