MGAB03H3 Lecture Notes - Lecture 10: Budget, Pro Forma, Financial Statement
Document Summary
Direct materials budget, including a schedule of expected cash disbursements for purchases of materials. Slide 3: selling and administrative expense budget, cash budget, budgeted income statement, budgeted balance sheet. A budget is a detailed quantitative plan for acquiring and using financial and other resources over a specified time period in the future: the use of budgets to control an organization"s activity is known as budgetary control. Planning involves developing objectives and preparing various budgets to achieve these objectives. Control involves the steps taken by management that attempt to ensure the objectives are attained. The budgeting models used the basic financial statements model. In contrast to the job order costing systems that have been studied in the past weeks, sales are the result rather than the beginning. The lecture provides an example of how to prepare an operating budget. This is followed by an illustration of a cash budget, which is a part of financial budgeting.