Business Planning and Budget

Question 1

Profit Planning

Answer 1

Refers to the short-term setting of goals and objectives on how to become profitable

Question 2

Budgeting

Answer 2

The process of translating operations into quantitative terms to represent them as planned operations, activities, and production for a specific time period

Question 3

Master Budget

Answer 3

A comprehensive financial planning tool that highlights operating budgets, financial statements, and a financial plan

Question 4

Operating Budget

Answer 4

A budget plan dedicated to the operations of the entity such as sales, production, and operating expense

Budgeted Income Statement

Question 5

Financial Budget

Answer 5

A budget plan dedicated to the entity’s cash budget, budgeted financial statements, and capital acquisitions

Budgeted Financial Statements

Question 6

Budgeting Process

Answer 6

> > Budgeted Income Statement
1. Sales Budget
2. Production Budget (Direct Materials, Direct Labor, Overhead)
3. Purchases Budget
4. Cost of Goods Sold Budget
5. Operating Expense Budget

> > Budgeted Financial Statements
1. Capital Acquisitions Budget
2. Cash Budget (Includes: Production Budget)
3. Pro- Forma FS (Includes: Inventory, Receivables, Payables, Etc.)