ACCT 2000 Study Guide - Long-Range Planning, Budget, Common Stock
Document Summary
Participative budgeting: risk of unreliable budgets greater when they are top-down . Budgetary slack refers to managers using the budget to foster gaming by intentionally underestimating budgeted revenues or overestimating budgeted expenses so that budget goals are easier to meet. Budgeting versus long range planning: three basic differences between budgeting and long range planning, time period involved, emphasis, detail presented, budgeting is short-term usually one year, long range planning at least 5 years. The budgeting process: base budget goals on past performance, collect data from organizational units, begin several months before end of current year, develop budget within the framework of a sales forecast. The master budget: a set of interrelated budgets that constitutes a plan of action for a specified time period, contains two classes of budgets: operating and financial, operating budgets: You are responsible for knowing the names and purpose of all the budgets and how to prepare all of the operating budgets except the budgeted income statement.
