ACC 312 Study Guide - Midterm Guide: Cash Flow, Fixed Asset, Balance Sheet
Document Summary
The master budget is prepared by pulling together each of the elements outlined above to provide a budgeted: Profit and loss account for the year. Padding may occur where budget holders are allowed to be excessively prudent regarding costs and expenses or achievement of sales. Managers may be prudent when constructing their budgets, and this can take the form of putting a little extra into expense categories that may be difficult to verify, or a little less in certain categories or sales. The budget preparation process is a continuous process of: Cash flow is an extremely important element in the budget preparation process. The master profit and loss budget, together with the planned capital expenditure, the outflow of cash on fixed asset acquisitions and investments, may then be used to prepare an initial cash budget. This will also include the impact of the operating cycle.
