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    Budgeting For Profit and Control

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    Angeline Ramirez
    The document defines key terms related to budgeting including budgets, master budgets, operating budgets, financial budgets, and capital expenditures budgets. It explains that budgets are quantitative plans used for both planning and control. The purposes of budgets are listed as planning, evaluating performance, coordinating activities, implementing plans, and communication/motivation. Budgets are also classified by length of time as long-term, intermediate, and short-term annual budgets. The types of budgets described include annual budgets, continuous/rolling budgets, flexible/variable budgets, fixed/static budgets, and long range budgets. The advantages of budgeting are identified as compelling management planning and providing a framework for judging subsequent performance.

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    Budgeting For Profit and Control

    Uploaded by

    Angeline Ramirez
    27 views2 pages
    The document defines key terms related to budgeting including budgets, master budgets, operating budgets, financial budgets, and capital expenditures budgets. It explains that budgets are quantitative plans used for both planning and control. The purposes of budgets are listed as planning, evaluating performance, coordinating activities, implementing plans, and communication/motivation. Budgets are also classified by length of time as long-term, intermediate, and short-term annual budgets. The types of budgets described include annual budgets, continuous/rolling budgets, flexible/variable budgets, fixed/static budgets, and long range budgets. The advantages of budgeting are identified as compelling management planning and providing a framework for judging subsequent performance.

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    Budgeting for Profit and Control

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    The document defines key terms related to budgeting including budgets, master budgets, operating budgets, financial budgets, and capital expenditures budgets. It explains that budgets are quantitative plans used for both planning and control. The purposes of budgets are listed as planning, evaluating performance, coordinating activities, implementing plans, and communication/motivation. Budgets are also classified by length of time as long-term, intermediate, and short-term annual budgets. The types of budgets described include annual budgets, continuous/rolling budgets, flexible/variable budgets, fixed/static budgets, and long range budgets. The advantages of budgeting are identified as compelling management planning and providing a framework for judging subsequent performance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    27 views2 pages

    Budgeting For Profit and Control

    Uploaded by

    Angeline Ramirez
    The document defines key terms related to budgeting including budgets, master budgets, operating budgets, financial budgets, and capital expenditures budgets. It explains that budgets are quantitative plans used for both planning and control. The purposes of budgets are listed as planning, evaluating performance, coordinating activities, implementing plans, and communication/motivation. Budgets are also classified by length of time as long-term, intermediate, and short-term annual budgets. The types of budgets described include annual budgets, continuous/rolling budgets, flexible/variable budgets, fixed/static budgets, and long range budgets. The advantages of budgeting are identified as compelling management planning and providing a framework for judging subsequent performance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Budgeting for Profit and Control

    DEFINITIONS

    BUDGET - It is a quantitative expression of the objectives and goals of an enterprise. It tool used for both
    planning and control.

    MASTER BUDGET - A comprehensive plan for overall activities of the enterprise. It summarizes the
    forecast contained in the operating budget, the financial budget, and the capital expenditures budget.
    The master budget is a complete blueprint of the planned operations of the firm for a period.

    OPERATING BUDGETS - A forecast of income, sales volume, and estimate the cost of goods sold,
    administrative and other expenses for a given period.

    FINANCIAL BUDGETS - A forecast of the flow of cash and other funds in the business and project the
    income statement and the balance sheet.

    CAPITAL EXPENDITURES BUDGETS - It is prepared for individual capital expenditure projects, like
    replacement, acquisition or construction of plants and major equipment.

    BUDGET PERIOD - It is the length of time for which a budget is to be prepared and implemented.

    PURPOSE (USES) OF BUDGETS

    1. Planning
    2. Evaluating performance
    3. Co-ordinating and control activities
    4. Implementing plans
    5. Communication and motivation

    BUDGETS CLASSIFIED BY LENGTH OF TIME:

    1. Long-term Budget - provides general direction for the firm.


    2. Intermediate Budget - identifies specific steps to be accomplished in achieving the long-term
    goals.
    3. Short-term (Annual Budget - it is a detailed plan of operation for the coming year.

    TYPES OF BUDGETS

    1. Annual Budgets - a budget prepared for one fiscal year.


    2. Continuous (Rolling) Budget - an annual budget which continues to delete month or period and
    add one month or period, so that a twelve month forecast always available.
    3. Flexible (Variable) Budget - a budget prepared for different levels of activity
    4. Fixed (Static) Budget - a budget based on one level of activity.
    5. Long Range Budget - a forecast that covers more than one fiscal year which normally covers 5 to
    10-year plan.

    ADVANTAGES OF BUDGETING

    1. Compels management planning.


    2. Provides a good framework for judging subsequent performance.

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