ACCT 2230 Chapter : Managerial Accounting Chapter Nine Notes

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14 Jan 2012

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Chapter nine- budgeting y the basic framework of budgeting: a budget is a detailed plan for the acquisition and use of financial and other resources over a specified time period. It represents a plan for the future expressed in formal quantitative terms: the master budget is a summary of a company s plans that set specific targets for sales, production, distribution, and financing activities. It generally culminates in a cash budget, a budgeted income statement, and a budgeted balance sheet. It represents a comprehensive financial expression of management s plans for the future and how these plans are to be accomplished. It is widely accepted that budgets serve as both a planning and control tool in organizations. Planning is developing objectives and preparing budgets to achieve these objectives. To e completely effective, a good budgeting system must provide for both planning and control: managers usually will have informal plans even before they become involved in developing their budgets.

Related Questions

Question (c) ShortQuestions

1. What are the similarities anddifferences of management accounting and financial accounting?

2. What management functions influencethe role of the finance department in an organization? How do thesefunctions affect the activities of the finance department?

3. While management relies heavily onfinancial data, these cannot be considered as a complete answer tomanagement problems. Why?

4. Does the controller exercisecontrol over other departments in an organization? Explain youranswer.

5. Compare and contrast the role andfunctions of the controller and treasurer.

6. Compare and contrast the role andfunctions of the internal auditor and external auditor.

7. Compare and contrast profitplanning and budgeting.

8. Explain the advantages a companymay derive from budgeting.

9. Explain the limitations ofbudgeting.

10. Explain the possible assumptionsone will consider in budget preparation.

11. Who usually compose a budgetcommittee?

12. Compare and contrast incremental budgeting, zero-basedbudgeting, and activity-based budgeting.

13. What behavioral problems are associated with setting abudget too tightly and too loosely?

Budgeting and long-range planning are both important aids to management in achieving a company's goals and objectives. Briefly distinguish between budgeting and long-range planning, and indicate how they help managers perform their functions.

scarlethornet53

Which of the following represents the normal sequence in which the below budgets are prepared?

a. Sales Budget, Budgeted Balance Sheet, Budgeted Income Statement

b. Budgeted Balance Sheet, Sales Budget, Budgeted Income Statement

c. Sales Budget, Budgeted Income Statement, Budgeted Balance Sheet

d. Budgeted Income Statement, Sales Budget, Budgeted Balance Sheet

erinferret437

ACCT 2230 Chapter : Managerial Accounting Chapter Nine Notes

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