33:010:275 Chapter Notes - Chapter 6: Budget, Budget Process, Finished Good

• School: Rutgers University
• Department: Accounting
• Course: 33:010:275
• Professor: S A V I T A S A H A Y

Document Summary

Budget a detailed quantitative plan for proposed course of action over a specified time period in the future. Budgeting period operating budgets ordinarily cover a one-year period corresponding to a company"s fiscal year. Many companies divide their annual budget into 4 quarters. Budget process involves planning and control: planning developing objectives and preparing various budgets to achieve those objectives, control investigating the deviations from the budgets and taking corrective actions for future, advantages of budgeting. Convert firm"s strategy into short-term goals to be achieved during the next year. Promotes coordination & communication among departments w/in the company. Uncover potential bottlenecks early and find solutions. Means of allocating resources among divisions: the master budget. Master budget consists of a set of operating budgets and a set of financial budgets that detail an organization"s financial plans for a specific accounting period, generally a year. Operating budgets plans used in daily operations; basis for financial budgets.