Finance As The Science And Art Of Managing Money

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Cherix Leung BUS202 Anna Kwong Reflective Paper Chapter 1 – Introduction to Finance In the book Managerial Finance, it defines finance as the science and art of managing money. Whether we are dealing with finance on the personal or business perspective, the general ideas behind them are inseparable, equally serious and important. Individuals make plenty of decisions, short-term and long-term plans based on their monthly income and expenses, which it is going to directly affect how they are going to manage their savings and investment. People who have not been educated in finance tend to have a misunderstanding about the duties of an accountant and a financial manager. An Accountant spends most of their time collecting, inspecting and entering financial data and records in order to accurately prepare the four key financial statements for the organization, which is the balance sheet, income statement, statement of retained earnings, and statement of cash flows. On the other hand, a financial manager’s duties are to establish a financial and budgeting plan for the company, raise and invest money to ensure the organization operate smoothly, safely and successfully. Financial managers are the decision maker for the financial aspect of a firm. One of the very first yet significant decision firm’s owner has to deal with is the legal form of organization. Sole proprietorships, partnerships as well as corporation are the three most common legal forms of business organization. Each

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