Theory Of Budgeting 2

Question 1

What is the timescale for strategic plan

Answer 1

Long

Question 2

What is the timescale for a budget

Answer 2

Usually annually

Question 3

How are budgets usually broken down

Answer 3

Into shorter periods usually monthly

Question 4

What are two types of budgets

Answer 4

Periodic budget and continual/rolling budget

Question 5

What are the simplified steps in preparing a budget

Answer 5

Identify the limiting factor, prepares the budget for the area of the limiting factor, prepared the budget for all other areas

Question 6

What does the master budget summarise

Answer 6

The contents of individual operating budgets

Question 7

What are some examples of master budgets

Answer 7

Budgeted income statement, budgeted statement of financial position, cash budget

Question 8

What are some examples of budgeting

Answer 8

Incremental budgeting, zero-base budgeting, top-down budgeting, bottom-up budgeting

Question 9

What are the characteristics of incremental budgeting

Answer 9

Based on prior year Adjusted for expected changes, often used for discretionary budgets, often only the adjustments that are scrutinised