ACFI1001 Lecture Notes - Lecture 11: Participatory Budgeting, Microsoft Excel, Cash Flow

• School: University of Newcastle
• Department: Accounting
• Course: ACFI1001
• Professor: Marcus

Document Summary

Budgets are plans dealing with the acquisition and use of resources over a specified time period. Budgets can range from relatively simple personal budgets and time budgets to sophisticated budgets for multinational companies who use thousands of different materials and manufacture hundreds of products. Budgeting plays an important role in 3 key activities: operating (day to day management decisions), planning (developing objectives and goals), controlling (ensuring that objectives and goals are met, comparing actual to budget. Operating cycle: cash on hand --> disbursement of cash for manufacturing costs or purchases of inventory. -> sale of product --> collection of cash from customers. One of the main reasons why small businesses fail is the lack of adequate planning for cash needs. A small business that views budgeting for cash as too time consuming or expensive is destined for failure. Due to computers, even the smallest business can now easily perform analyses required for successful future plans and budgets.