Theme 2.2.4 - budgeting

Question 1

Budget

Answer 1

A quantitative economic plan prepared and agreed in advance.

Question 2

Budgetary control

Answer 2

A business system that involves making future plans, comparing the actual results with the planned results and then investigating the causes of any differences.

Question 3

Historical figures

Answer 3

Quantitative information based on past trading records.

Question 4

Production cost budget

Answer 4

A firm’s planned production costs for a future period of time.

Question 5

Sales budget

Answer 5

A firm’s planned sales for a future period of time - can be measured in terms of volume or revenue

Question 6

Variance

Answer 6

The difference between actual financial outcomes and those budgeted

Question 7

Variance analysis

Answer 7

The process of calculating variances and attempting to identify their causes

Question 8

Zero-based budgeting or zero budgeting

Answer 8

A system of budgeting where no money is allocated for costs or spending unless they can be justified by the fund holder.