Lecture

Budgeting Process

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In course

MGT-510: Performance Management

The objective of the course is to provide participants with the main processes and tools a company applies to evaluate the financial and non financial performance. ...

Description

This lecture covers the management control tools based on Responsibility Accounting, such as budgets and variances analysis. It explains the planning process, benefits of budgeting, participation in the budget process, budget periods, master budget components, and the preparation of the master budget. The lecture also delves into the production budget, material purchases, cash payments for material purchases, direct labor, manufacturing overhead, selling and administrative expenses, cash receipts budget, comprehensive cash budget, budgeted income statement, and budgeted balance sheet. It concludes with schedules detailing budgeted cash receipts, cash disbursements for purchases and operations, total cash disbursements, cash receipts and disbursements, and financing required.

Official source

Ontological neighbourhood

Business

Accounting: Financial accounting

Related concepts (32)

Budget

A budget is a calculation plan, usually but not always financial, for a defined period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including time, costs and expenses, environmental impacts such as greenhouse gas emissions, other impacts, assets, liabilities and cash flows. Companies, governments, families, and other organizations use budgets to express strategic plans of activities in measurable terms.

Financial statement

Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand. They typically include four basic financial statements accompanied by a management discussion and analysis: A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.

Financial audit

A financial audit is conducted to provide an opinion whether "financial statements" (the information is verified to the extent of reasonable assurance granted) are stated in accordance with specified criteria. Normally, the criteria are international accounting standards, although auditors may conduct audits of financial statements prepared using the cash basis or some other basis of accounting appropriate for the organization.

Decision-making

In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either rational or irrational. The decision-making process is a reasoning process based on assumptions of values, preferences and beliefs of the decision-maker. Every decision-making process produces a final choice, which may or may not prompt action.

Financial accounting

Financial accounting is a branch of accounting concerned with the summary, analysis and reporting of financial transactions related to a business. This involves the preparation of financial statements available for public use. Stockholders, suppliers, banks, employees, government agencies, business owners, and other stakeholders are examples of people interested in receiving such information for decision making purposes. Financial accountancy is governed by both local and international accounting standards.

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