ACTG 2020 Chapter Notes - Chapter 9: Accounts Receivable, European Cooperation In Science And Technology, Cash Cash
Document Summary
Planning looking ahead to see what actions should be taken to realize particular goals. Control looking backward, determining what actually happened, and comparing it with the previously planned outcomes. Force managers to plan for the future. Budgets set for performance evaluation (e. g. actual budget vs planned budget) Is the comprehensive financial plan for the organization as a whole. Typically, the master budget is for a one-year period, corresponding to the fiscal year for the company. Yearly budgets are broken down into quarterly and monthly budgets. Allows frequent comparison of actual and budgeted data. As a month expires in the budget, an additional month in the future is added so that the company always has a 12-month plan on hand. Resolves differences that arise as the budget is prepared. Responsible for directing and coordinating overall budgeting process. Operational budgets describe the income-generating activities of a firm: sales production, and finished goods inventories.
