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20 Cards in this Set
- Front
- Back
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Program Budgeting
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Requires the cost centre to plan its expenditure specifically around the programs or projects conducted by the cost centre.
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Rolling Budget
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A budget that is prepared monthly or quarterly and reflects planning changes, often through the next 12 to 18 months. Often reflects the most recent results and incorporates significant changes in business strategy, operating plans and the economy.
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Strategic Budgeting
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The process of considering alternative courses of action on profit, assets and cash flow management.
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Zero-Based Budgeting
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A budgeting process in which managers justify budget amounts as if no information about budgets or costs from prior budget cycles was available.
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Budget
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A formalised financial plan for operations of an entity for a specified future period.
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Budget Assumptions
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Plans and predictions about next period’s operating activities.
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Budget Cycle
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A series of steps that entities follow to develop and use budgets.
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Budget Variances
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Differences between budgeted and actual results.
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Budgetary Slack
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The practices of intentionally setting revenue budgets too low and cost budgets too high.
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Budgeted Financial Statements
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Forecasts of the future statement of profit or loss, statement of financial position and cash flows, given an organisation’s sales forecasts and expenditure plans for the next period.
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Cash Budget
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Reflects the effects of management’s plans on cash, and summarises the information that accountants gather about the expected amounts and timing of cash receipts and disbursements.
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Decision Rights
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The responsibilities and financial decision-making authority of individual managers.
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Favourable Variance
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A variance in which actual revenues are larger than the budget, or actual costs are lower than the budget.
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Financial Budgets
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Management’s plans for capital expenditures, long-term financing and cash flows, resulting in a budgeted balance sheet and budgeted statement of cash flows.
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Flexible Budget
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A budget that reflects a range of operations; fixed and variable costs are separated to more accurately reflect the effects of activity levels on cost.
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Master Budget
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A comprehensive plan for an upcoming financial period, usually a year. Often summarised in a set of budgeted financial statements.
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Operating Budget
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Management’s plan for revenues, production and operating costs.
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Participative Budgeting
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A budgeting process in which managers who are responsible for meeting budgets also prepare the initial budget forecasts, setting targets for themselves.
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Static Budget
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A budget based on forecasts of specific volumes of production or services. All variable costs are calculated for a specific volume of operations.
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Unfavourable Variance
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A variance in which actual costs are greater than budgeted, or actual revenues are less than budgeted.
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