COMMERCE 2AB3 Chapter Notes - Chapter 10: Budget, Main Source, Income Statement
4 Apr 2017
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Document Summary
Budget: a formal written statement, in financial terms, of management"s plans for a specified future time period. Sales forecast: the projection of potential sales for the industry and the company"s expected share of these sales. In sales forecasting, various factors are considered: (1) general economic conditions, (2) industry trends, (3) market research studies, (4) anticipated advertising and promotion, (5) previous market share, (6) changes in prices, and (7) technological developments. Budget committee: a group responsible for coordinating the preparation of the budget. Participative budgeting: a budgetary approach that starts with input from lower-level managers and works upward so that managers at all levels participate. Budgetary slack: the amount by which a manager intentionally underestimates budgeted revenues or overestimates budgeted expenses in order to make it easier to achieve budgetary goals. Long-range planning: a formalized process of selecting strategies to achieve long-term goals and developing policies and plans to implement the strategies.
