Budgeting Flashcards
0
Q
Objectives of budget preparation
A
- Planning: look ahead, foresee potential threats/opportunities
- Responsibility: objectives set for the organization as a whole
- Integration & co-ordination: between departments
- Motivation: feedback to employees
- Evaluation & control: actual results vs budget
1
Q
Budgeting vs Forecasting
A
Budgeting = setting targets Forecasting = estimating what is likely to occur in the future
2
Q
Types of planning
A
- Strategic/ corporate/ long-range
- Budgetary/ short-term tactical
- Operation
3
Q
The budgeting process…
A
- Communication of objectives
- Identification of the principle budget factor
- Preparation of functional budgets
- Challenge and co-ordination of budgets
- Preparation of master budget
- On-going review of budgets
4
Q
A cash budget can show 4 positions:
A
- Short-term surplus
- Short-term deficit
- Long- term surplus
- Long-term deficit
