Accounting Principles Budgetary Planning参考.pptxVIP

;Learning Objectives;Budget: a formal written statement of management’s plans for a specified future time period, expressed in financial terms. Primary method of communicating agreed-upon objectives throughout the organization. Promotes efficiency. Control device - important basis for performance evaluation once adopted.;Historical accounting data on revenues, costs, and expenses help in formulating future budgets. Accountants normally responsible for presenting management’s budgeting goals in financial terms. The budget and its administration are the responsibility of management.;Primary benefits of budgeting: Requires all levels of management to plan ahead. Provides definite objectives for evaluating performance. Creates an early warning system for potential problems. Facilitates coordination of activities within the business. Results in greater management awareness of the entity’s overall operations. It motivates personnel throughout organization to meet planned objectives.;Which of the following is not a benefit of budgeting? Management can plan ahead. An early warning system is provided for potential problems. It enables disciplinary action to be taken at every level of responsibility. The coordination of activities is facilitated. ;Depends on a sound organizational structure with authority and responsibility for all phases of operations clearly defined. Based on research and analysis with realistic goals. Accepted by all levels of management.;May be prepared for any period of time. Most common - one year. Supplement with monthly and quarterly budgets. Different budgets may cover different time periods. Long enough to provide an attainable goal and minimize seasonal or cyclical fluctuations. Short enough for reliable estimates. ;;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. Shows potential industry sales. Shows company