Accounting Exam Chapter 6 Test

A quantitative expression of a proposed plan of action by management and an aid to coordinate what needs to be done for that plan
can be financial and non financial and serves as a blue print for company.

How a company recognizes capabilities with the opportunities in the market place to accomplish its objective.

Long run budgets

Short run budgets

In strategic plans making operations plans strategic plans

Limited resources of an organization

How to obtain the funds to acquire resources

Expresses management operating and financial plans it includes budgeted financial statements. Its is the plan of companies intends to accomplish.

Promote coordination and communication provide a framework for judging performance and facilitating learning motivate mangers and other employees

Meshing and balancing all aspects of production or service and all departments in a company in the best way to meet the goals. Focuses on relationships among individual departments

Measure actual performance against predicted performance.

Challenging budgets promote employee performance. most employees work intensively to promote failure than achieve success.

Continous budget a budget that is always available for a specified future period continually adding a month or quarter etc.

1. Prepare the revenues budget 2. Prepare the production budget 3. Prepare the direct material usage budget and direct material purchases budget 4. Prepare the direct manufacturing labor costs budget 5. Prepare the manufacturing overhead costs budget 6. Prepare the ending inventories bud7. Prepare the cost of goods sold budget 8. Prepare the non-manufacturing costs budget 9. Prepare the budget income statement

1. Budgeted income statement (operating budget)2. Budgeted balance sheet3. Cash budget4. Capital budget (for large fixed assets, e.g. buildings) 5. Supporting schedules as needed