AccountingPrinciplesBudgetaryPlanning幻灯片.pptxVIP

23Budgetary PlanningLearning ObjectivesState the essentials of effective budgeting and the components of the master budget.1Prepare budgets for sales, production, and direct materials.2Prepare budgets for direct labor ,manufacturing overhead, and selling and administrative expenses, and a budgeted income statement.3Prepare a cash budget and a budgeted balance sheet.4Apply budgeting principles to nonmanufacturing companies.5State the essentials of effective budgeting andthe components of the master budget.LEARNINGOBJECTIVE1Budget: 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.LO 1Budgeting and AccountingHistorical 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.LO 1The Benefits of BudgetingPrimary 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.LO 1The Benefits of BudgetingQuestionWhich 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. LO 1Essentials of Effective BudgetingDepends on a sound organizational structure with authority and responsibility for all phases of operations clearly defin