Budgeting Flashcards
a plan expressed in quantitative terms, on how to acquire and use the resources of an entity during a certain future period of time.
Budget
the process of creating a formal plan and translating goals into a quantitative format
Budgeting
also called as management or executive committee, is primarily responsible in developing and institutionalizing budgetary systems and processes. It is usually composed of sales manager, production manager, the chief engineer, and the contractor.
Budget Committee
a detailed set of information and guidelines about the budgeting processes.
Budget Manual
the length of time for which a budget is to be prepared and implemented.
Budget Period
it represents the overall plan of the organization for a given budget period. It consists of all the individual budgets for each segment of the organization aggregated or consolidated into one overall budget for the entire firm.
Master Budget
Master budget is composed of:
- Operating Budget
- Financial Budget
- Special Budget
the budgeted income statement for a certain budget period
Operating Budget
the budgeted balance sheet as of the end of a certain period
Financial Budget
it includes performance and capital budgets.
Special Budget
the activities to be incurred are to be prioritized based on its order of relevance in line with a defined goal in the coming period without regard to past experience or present condition.
Zero-based Budgeting
this budgetary approach emphasizes the decentralization of budgetary decision-making. It places local managers and other staff at the center of the budget preparation process, making them responsible for both the preparation and the maintenance of the budget.
Site-based Budgeting
a time framed is maintained (12 mos. or 6 mos.), and when a segment in a budgeted time frame expire and is dropped, a new segment is to be added to maintain the same time frame.
Continuous (Rolling) Budgeting
it is done over the entire life span of a product starting from its period of conception, to infancy, to growth, expansion, up to maturity.
Life-cycle Budgeting
budgets are developed through joint decision-making by top management and operating personnel.
Participatory Budgeting
budgets are prepared by top management with little or no input from operating personnel.
Imposed Budgeting
costs and expenses are not segregated to fixed and variable components and the budgeted costs, without the adjustments to actual capacity, serves as the basis in evaluating actual performance.
Static (fixed) Budgeting
prepared for different level of activity, costs and expenses are segregated to fixed and variable components giving way to the determination of estimated costs based on actual capacity.
Flexible Budgeting
expressed in units of materials, number of employees, or number of man hours or service units rather than in pesos.
Physical Budgeting
identifying responsibility centers where revenues and costs are controlled by a responsible officer.
Responsibility Budgeting
it is the practice of linking the allocation of resources to the production outcomes. The objective is to allocate government resources to those service providers or programs that use them most effectively.
Outcome-focused Budgeting
it is referred to as the “historical” approach because administrators and chief executives often base their expenditure requests on historical expenditures and revenue data. It also offer flexibility in the amount of control established over the use of resources, depending on the level of expenditure detail (e.g., fund, function, and object) incorporated into the document.
Line-item Budgeting
budgeted expenditures are based on a standard cost of inputs multiplied by the number of units of an activity to be provided in that time period. The total budget for an organization is the sum of all the standard unit costs multiplied by the units expected to be provided.
Performance Budgeting
standards are established as a basis of actions and performance; also as a motivational factor.
Standard-setting
