Theories Flashcards
a plan expressed in quantitative terms, on how to acquire and
use the resources of an entity during a certain future period of time
Budget
The process of creating a formal plan and translating goals
into a quantitative format
Budgeting
a detailed set of information and guidelines about the
budgeting processes.
Budget Manual
the length of time for which a budget is to be prepared
and implemented.
Budget Period
it represents the overall plan of the organization for a given budget period
Master Budget
It consists of all the individual budgets for each segment of the
organization aggregated or consolidated into one overall budget for the entire firm
Master Budget
Master Budget composed of: (3)
Operating Budget
Financial Budget
Special Budget
It includes performance and capital budgets.
Special Budget
the budgeted balance sheet as of the end of a
certain period
Financial Budget
the budgeted income statement for a certain budget period
Operating Budget
The activities to be incurred are to be prioritized based on its order of relevance in line with a defined goal in the coming period without regard to past experience or present condition
Zero-based Budgeting
a time framed is maintained (12 mos. or 6 mos.), and when a segment in a budgeted time frame expire and is dropped, a new segment is to be added to maintain the same time frame.
Continuous (Rolling) Budgeting
this budgetary approach emphasizes the decentralization of budgetary decision-making.
Site-based Budgeting
it is done over the entire life span of a product
starting from its period of conception, to infancy, to growth, expansion, up to maturity.
Life-cycle Budgeting
It places local managers and other staff at the center of the budget preparation process, making them responsible for both the preparation and the maintenance of the budget.
Site-based Budgeting
budgets are developed through joint
decision-making by top management and operating personnel
Participatory Budgeting
budgets are prepared by top management with
little or no input from operating personnel.
Imposed Budgeting
costs and expenses are not segregated to
fixed and variable components and the budgeted costs, without the adjustments to actual
capacity, serves as the basis in evaluating actual performance.
Static (fixed) Budgeting
prepared for different level of activity, costs and
expenses are segregated to fixed and variable components giving way to the
determination of estimated costs based on actual capacity.
Flexible Budgeting
expressed in units of materials, number of
employees, or number of man hours or service units rather than in pesos.
Physical Budgeting
identifying responsibility centers where
revenues and costs are controlled by a responsible officer.
Responsibility Budgeting
– it is the practice of linking the allocation
of resources to the production outcomes.
Outcome-focused Budgeting
The objective is to allocate government
resources to those service providers or programs that use them most effectively.
Outcome-focused Budgeting
it is referred to as the “historical” approach
because administrators and chief executives often base their expenditure requests on
historical expenditures and revenue data.
Line-item Budgeting
It also offer flexibility in the amount of control
established over the use of resources, depending on the level of expenditure detail (e.g.,
fund, function, and object) incorporated into the document.
Line-item Budgeting
, budgeted expenditures are based on a standard cost of inputs multiplied by
the number of units of an activity to be provided in that time period.
Performance Budgeting
are established as a basis of actions and
performance; also as a motivational factor.
Standard-setting
concrete plans, targets and activities are develop
Planning
goals and processes should be
effectively communicated and coordinated to encourage participation, involvement,
commitment, and ownership of the organizational plans
Communication & Coordination
actions are checked to assess conformity
with plans and to make on-line corrections and adjustments.
Monitoring of activities
Results are to be evaluated to determine what happened and make
end-of-the-line corrections and adjustments.
Evaluation of results
5 purposes on why we have to budget
Standard-setting
Planning
Communication & Coordination
Monitoring of activities
Evaluation of results
