Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Management Information > Budgeting > Flashcards

Budgeting Flashcards

1
Q

what is a budget

A

a quantitative expression of a plan of action prepared in advance of the period to which it relates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

reasons for budgeting:

A
  • Planning
  • Controlling costs
  • Co-ordination (working towards same goal)
  • Communication
  • Motivation
  • Evaluation
  • Authorisation
  • Resource allocation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

elements of the budgetary process

A
  • long term objectives
  • budget committee (don’t make budget)
  • budget manual
  • limiting factor (principle budget factor)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

limiting factor (principle budget factor)

A
  • Stops you from reaching budget
  • eg if sales is limiting facotr than sales budget must be produced first
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what is on a budget manual

A
  • budget process
  • organisation chart
  • budget timetable
  • proformas
  • account codes
  • key assumptions
  • budget officer
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what is the budget committee

A
  • Don’t make the budget
  • responsible for communication policy guidelines to the people who prepare the budget and for setting and approving budget
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

final stages of budget processing:

A
  1. Initial budgets are prepared
  2. Initial budgets are reviews and integrated into the complete budget system
  3. Master budget is prepared
  4. Comparisons between budget and actual results (variance analysis)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what is a functional budget?

A

budget of income and/or expenditure which applies to a particular function

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

sales budget

A

sales budget= sales volume x selling price per unit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

production budget

A

how much you want to manufacture
sales budget + closing inventory - opening inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

two types of material budget

A
  • usage budget
  • purchases budget
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

material usage budget=

A

production budget x standard material per unit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

labour budget=

A

production budget x time per unit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what is the master budget and what does it comprise of:

A

Budget into which all the subsidiary budgets are consolidated
Compromise:
- budgeted profit and loss account
- budgeted balance sheet
- budgeted cash flow statement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what is a cash budget

A

detailed budget of estimated cash inflows and outflows incorporating both revenue and capital items

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what is sensitive analysis?

A

one change in assumption can change a budget

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

forecast equation

A

y= a + bx

y = total cost
a = fixed cost
b = variable cost
x = no of units/activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

high low method

A
  1. Pick highest and lowest levels of activity
  2. Calculate variable cost - Change cost/change units
  3. Find fixed cost
  4. Calculate expected cost
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

linear regression

A

using all data sets when deriving equation of a straight line

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

advantages and disadvantages of linear regression

A

ADV - all data points taken into account
DIS - regression assumes historical behaviour of the data continues into the foreseeable future. Predictions only reliable if there is a significant correlation between the data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

coefficient of determination

A

r^2
- how much of the variation in the dependant variable is explained by the variation of the independent variable

22
Q

limitations of correlation

A
  • correlation doesnt mean causation
  • correlation and causality are not the same thing
23
Q

what is a time series

A

a set of values for some variable (eg monthly sales) which varies with time

24
Q

components of a time series

A
  • Basic trend
  • Cyclic variation - economic cycles of booms and slumps
  • Season variations
  • Residual variations - irregular/random fluctuations usually causes by specific factors to time series
25
Q

what is a moving average

A

set of calculations used to smooth out the variations in a time series to identify a trend

26
Q

two types of seasonal variation

A
  • additive model
  • multiplicative model
27
Q

characteristics of big data

A
  • volume
  • velocity
  • variety (structured/unstructured data)
  • veracity (clean free from bias)
28
Q

data analytics

A

process of collecting, organising and analysing large sets of data to generate trends and other information to aid decision making

29
Q

data mining

A

process of sorting through data to identify patterns and relationships betweens different items, usually with the help of statistical algorithms

30
Q

structured data

A

data that can be contained within a field of data record or file

31
Q

unstructured data

A

data that is not easily contained within structured data fields, such as pictures, videos webpages, PDF files, emails or blogs

32
Q

big data benefits

A
  • drives innovation
  • helps create a competitive advantage
  • improves productivity
33
Q

big data limitations

A
  • difficult to convert into useful information
  • lack of skilled people
  • data security and protection issues
34
Q

what is artificial intelligence?

A

the use of computers to do tasks which are thought to require human intelligence

35
Q

machine learning

A

computers do things rather than follow pre-programmed rules. Eg find patterns in data and use models to make predictions

36
Q

top down budget

A

a budget is set without allowing the ultimate budget holder to have the opportunity to participate in the budgeting process. Also called imposed budget or non participative

37
Q

bottom up budget

A

budget holders have the opportunity to participate in setting their own budgets. Also called participative budget

38
Q

types of budget

A
  • continuous/rolling budget
  • incremental budget
  • zero based budget
39
Q

continuous/rolling budget

A

prepared a year ahead and is updated regularly by adding a further accounting period

40
Q

incremental budget

A

uses the previous periods budget as a starting point and then adds increments as it sees necessary

41
Q

zero based budget

A

starts the budgeting process from zero because it does not take anything for granted

42
Q

beyond budgeting

A

the idea that companies need to move beyond budgeting because of the inherent flaws in budgeting

43
Q

difference between budgeting and forecasting

A
  • prediction of what is likely to happen in the future given a set of circumstances
  • budget - quantified plan of what the organisation intends should happen in the future
44
Q

selection bias

A

sample selection does not represent population

45
Q

self selection bias

A

when individuals select themselves

46
Q

observer bias

A

researcher allows their assumptions to influence the observation

47
Q

omitted variable bias

A

key data is not included in the analysis

48
Q

cognitive bias

A

the presentation of data may be misleading

49
Q

confirmation bias

A

people can see data that confirms their beliefs and ignore other items

50
Q

survivorship bias

A

the sample contains only items that survived a previous event

Management Information (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions