ACCT 002 Lecture Notes - Lecture 31: Operating Budget, Income Statement, Financial Statement

• School: College of The Sequoias
• Department: Accounting (ACCT)
• Course: ACCT 002
• Professor: cooper

Document Summary

Operational budgeting and profit planning (22) (day-to-day budgeting) Set of statements of estimated financial statements. Includes several schedules that provide the backup documentation for the financial statements. Everything starts with sales forecast as it provides a basis for which level it is budgeting. Factors affecting the accuracy of the sales forecast. Actions of competitors (increase or decrease market share) As one month or quarter end, another period is added to the end of the budget. Prior year"s budget is used as a starting point for the current year. Only the changes (increments) need be justified. This year the manager has asked for a 10% increase, a budget of ,000. 00. With incremental budgeting, only the ,000. 00 increase in the budget needs to be justified. Each year, the full amount of each budget item need be justified. Last year"s budget was ,000. 00 this year the manager has asked for a 10% increase, a budget of.