ACCT 2000 Chapter : Chapter 20
Document Summary
The budget period: may be prepared for any period of time, most common - one year, supplement with monthly and quarterly budgets. 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 five 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. First, let"s start with the operating budgets (remember, there are 7 of them!)
