ACCT 323 Study Guide - Quiz Guide: Dual Role, Income Statement, One Unit
17 Nov 2016
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Budget - detailed plan for the future expressed in quantitative terms. Budgetary control - use of budgets to control a firm"s activities. Master budget - summary of a company"s plans; specific targets are set for sales, distribution, admin and financing activities. Communicate management"s plans throughout the organization (employees develop better understanding of the firm"s goals) Forces managers to think about and plan for the future. Means for allocating resources where they can be most efficiently used. Bottleneck -> machine, activities or processes that limit total output because they are operating at capacity. Coordinate and integrate the activities of the entire organization to ensure that everyone is pulling in the same direction. Define goals that serve as benchmarks for evaluating performance. Responsibility accounting - system of accountability whereby managers are held responsible for items of revenue and cost over which they have significant influence (difference between budgeted and actual results).
