ACCT 2230 Chapter 9: ACCT Chapter 9
13 Nov 2016
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Document Summary
Responsibility accounting: a system of accountability in which managers are held responsible for those items of revenue and cost over which they can exert signi cant in uence: managers are held responsible for differences between budgeted and actual results. Continuous or perpetual budget: a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed. Participative budget: a method of preparing budgets which managers prepare their own budget estimates. Behavioural factors in budgeting: to be successful, needs complete support of people in key management positions, don"t use it to pressure or blame employees. Stretch budget: a budget that is highly dif cult to achieve. Attainment of stretch budgets often requires considerable changes to the way activities are performed: dif culty level of budget targets become more important when bonuses are based on meeting or exceeding the budget.
