MGT223H5 Chapter Notes - Chapter 9: Income Statement
Document Summary
Budgeting for coming year to allocate resources, and coordinate activities across different functional areas within organization. Used to managers to periodically compare actual performance of rev, exp and profits to plan. Budgetary control: use of budgets to control a firm"s activities. Master budget: summary of company"s plans that sets specific targets for sales, production, distribution and financing activities culminates in cash budget, budgeted income statement / balance sheet. Planning: developing objectives and preparing various budgets to achieve these objectives. Control: steps taken by management to increase the likelihood that the objectives developed at planning stage are attained and to ensure all parts of organization function in a manner consistent w/ organization policies. Responsibility accounting: system of accountability in which managers are held responsible for those items of rev and cost over which they can exert significant influence only those items.
