FHF Chap 6 Flashcards
In accounting, the
difference between
what actually
happened and what
was expected to
happen.
variance analysis
The creation and use of
financial forecasts to
plan for and control a
business’s operations
budgeting
A statement of the core
beliefs that underlie
the culture of the
organization.
values statement
A statement that
describes the desired
position of the
business at a future
point in time
vision statement
Specified goals,
including financial, that
an organization strives
to attain. Generally,
are qualitative in
nature.
organizational goals
Quantitative targets
that an organization
sets to meet its
organizational goals.
organizational
objectives
The portion of the
operating plan that
focuses on the finance
function.
financial plan
bottom-up approach
A budgeting system
whereby budgets
originate at the
department or program
level and then are
aggregated and
approved by senior
managers.
top-down approach
A budgeting system
whereby the finance
staff prepares the
budget for senior
management approval,
after which it is sent
to department and
program heads for
implementation
rolling budget
A budget that is
constantly updated
by adding a period to
the budget each time
a period ends. Also
called a continuous
budget
out year
A future year beyond
the next budget year.
A listing of the
expected revenues
(including both
operating and
nonoperating) of an
organization, usually
on a monthly, quarterly,
and annual basis
and broken out by
department, service,
and payer.
revenue budget
A listing of the
expected expenses
of an organization,
usually by department
and service, and
further broken down
into components such
as facilities, labor, and
supplies.
expense budget
A subunit in an
organization that
incurs costs but
generates no revenues.
cost center
A subunit in an
organization that both
generates revenues
and incurs costs,
hence creating profits.
Also called a revenue
center
profit center
