Key Terms - Theme 2 (Budgets) Flashcards
Budget
A financial business plan for the future concerning the revenues and expenditure of a business
Budgetary control
A business system that involves making future plans, comparing the actual results with the planned results and then investigating the cause of any differences
Historical figures
Quantitative figures based on past trading records
Production cost budget
A firms planned production costs for a future time period
Sales budget
A firms planned sales for a future period of time - can be measured in terms of volume or revenue
Variance
The difference between actual financial outcomes and the budgeted financial outcomes
Variance analysis
The process of calculating variances and attempting to identify their causes
Zero-based budgeting/zero budgeting
A system of budgeting where no money is allocated for costs or spending unless they can be justified by the fund holder (they are given a zero value)