Budgets and Finance Flashcards
What is short term funding?
Short- term funding is a type of investment fund which invests in money market investments of high quality and low risk
Explain an external source of finance?
An external source of finance is where a company can ‘rent’ assets but never own them.
Explain a long-term source of finance.
A long -term source of finance is usually used to help buy the premises
What is Budgeting?
provide (a sum of money) for a particular purpose from a budget.
What is Budgeting Control?
A control technique whereby actual results are compared with budgets. Any differences (variances) are made the responsibility of key individuals who can either exercise control action or revise the original budgets.
What is Adverse Variance?
A favourable variance is achieved when the actual performance is better than the expected results. An adverse variance is achieved when the actual performance is worse than the expected results.
What is Positive Variance?
A favourable budget variance refers to positive variances or gains; an unfavourable budget variance describes negative variance, meaning losses and shortfalls. Budget variances occur because forecasters are unable to predict the future with complete accuracy.
