ACCT 2200 Chapter Notes - Chapter 8: Income Statement
5 May 2015
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Document Summary
A budget is a detailed plan for the future expressed in formal quantitative terms. They have two purposes:: planning which involves developing goals and creating budgets in order to attain them, control which involves gathering feedback to ensure proper execution of the plan. Responsibility accounting says that a manager is responsible for only those items that he can control to a significant extent. Operating budgets are usually for a one year period corresponding to the company"s fiscal year. A continuous or perpetual budget is a 12-moth budget that rolls forward when the current month or quarter is completed. The self-imposed budget is prepared with the full cooperation and participation of managers across all levels. The budget committee is responsible for overall policy and coordination relating to the budget. The master budget consists of a number of separate but interdependent budgets that formally lay out the company"s sales, production and financial goals.
