ACCT 210 Lecture Notes - Lecture 9: Budget
15 Dec 2019
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Document Summary
A formal written expression of management"s plans for a specified future time. Acct 210 lecture 9 period, expressed in financial terms. Primary method of communicating agreed-upon objectives throughout the organization. Control device - important basis for performance evaluation once adopted. The budget and its administration are the responsibility of management. Requires all levels of management to plan ahead. Provides definitive objectives for evaluating performance (benchmarks) Creates an early warning system for potential problems. Facilitates coordination of activities within the business. Results in greater management awareness of the entity"s overall operations. It motivates personnel throughout organization to meet planned objectives. Depends on a sound organizational structure with authority and responsibility for all phases of operations clearly defined. Must be accepted by all levels of management. Based on research and analysis with realistic goals: Historical accounting data (revenues and expenses) can help formulate future budgets. Collect data from organizational units about next year"s plans.
