SOCSCI 2AC3 Lecture Notes - Lecture 6: Income Statement, Accounts Receivable, Accounts Payable
Document Summary
Agenda: budgeting (profit planning: purposes and overview of budgeting, building a master budget. A budget is a detailed plan for acquiring and using financial and other resources over a specified period. Key for planning & control: planning: developing objectives and preparing various detailed budgets to achieve those objectives, control: the steps taken by management to attain the objectives set down at the planning stage. Two of the most important components advantages of budgeting define goal, think about future, means of allocating resources, communicating plans, coordinate activities. Choosing the budget period: operating budget divided into quarterly or monthly budgets, smaller time periods can keep track better to know when u need to make changes (effective) Schedule of expected cash disbursements (for direct materials only). Not always getting money right after we sell stuff. Additional data: all sales are on account, the company collects 70% of these credit sales in the month of the sale;