Budget: a detailed plan for the acquisition & use of financial & other resources over a specified time period. Master budget: a summary of the company"s plans that sets specific targets for sales production, distribution, & financing activities. Budgets serve as a planning & control tool in organizations. Planning involves developing objectives & preparing various budgets to achieve objectives. Control involves the steps taken by management to increase likelihood that developed objectives will be achieved. Budgeting allows time to analyze the situation on paper before consuming the resources necessary. Advantages of budgeting: provide means of communication of managements plans throughout company, force managers to think about plan for the future. 3: uncovers potential bottlenecks (machine, process etc. that limits total output b/c it is operating at. Provides means of allocating resources to those parts where they will be use most effectively capacity) before they occur. Define goals & objectives and serve as benchmarks for evaluating performance.