Midterm Exam Flashcards
A financial plan of the resources needed to carry out tasks and meet financial goals
Budget
A quantitative expression of the goals the organization wishes to achieve in the cost of attaining these goals
Budget
The act of preparing a budget
Budgeting
Is a use of budgets to control a firm’s activities
Budgetary control
Indicates the sales level, production and cost levels, income, and cash flow‘s that are anticipated for the coming year
Overall or master budget
Also known as planning budget or budget plan
A summary of all phases of a company’s plans and goals for the future
Master budget
Uses of the process of budgeting
Communication
Motivation
Standards
Planning
Organizing and directing
Controlling and performance evaluation
The most important process of management
Communication
This process moves people to act in accordance with organizational goals
Motivation
Measures of performance
Standards
An important basis for planning and controlling. They are set to motivate.
Standards
An act of approximating the future and preparing resources
Planning
Policies, systems, operational strategies, methods and means are devised as activities are mapped out and lined up to execute plans
Organizing and directing
Classification of controls
Feedback controls
Concurrent controls
Feedforward controls
Pertain to completed activities
Feedback controls
Refer to ongoing processes
Concurrent controls
Anticipate and prevent problems
Feedforward controls
The executives should primarily subscribed organizational objectives. True or false?
True
Exercise competence in leading in managing his top executives
CEO
Capable and competent, and have ownership of organizational goals
Top executives
Composed of top executives in the administrative, operational and financial areas of business, such as the vice president for sales, production, purchasing, human resources, information, technology, engineering and quality, administration, and most especially, finance
Budget committee
Also known in practice as the management committee or executive committee
Budget committee
Normally, headed by a budget, Director, administers the budgetary process
Budget committee
The schedule of activities for the development and production of the budget
Budget planning calendar
Includes distribution instructions for all budget schedules to show that a segments budget is an input to another department or business unit in the preparation of their own budget
Budget manual
Integrates the entire budgetary activities
Planning calendar
Types of budgets or the major composition of the master budget
operating budget
financial budget
capital budget
Refers to projection of revenue, expenses, and results of operations for a definite period of time
Budgeted income statement
A period-by-period Statement of cash at the start of a budget period, expected cash receipts classified by source and the resulting cash balance at the end of the budget period
Cash budget
Refers to the budget of the financial resources as reflected in the budget statement of financial position and cash budget
Financial budget
Projection of cost at a particular, or one level of production for a definite time period
Fixed budget
Projection of cost at different levels of production for a definite period of time
Flexible or variable budget
Budget prepared, using employees at all levels in the organization
Participative budget
Budget that is expressed in units of materials, number of employees, or number of men hours, or service units rather than in pesos
Physical budget
Another term for master budget
Planning budget or static budget
Production plan of resources, needed to meet current sales demand and ensure adequate nventory levels
Production budget
Budget for the major programs or projects that the company plans to undertake
Program budget
Refers to the plans for the conduct of business for the planning period; it includes the budgeted income statement and all its supporting budgets
Operating budget
Budget for a responsibility center
Responsibility budget
