A budget is a formal written statement of management’s plans for a specified future time period, expressed in financial terms. It normally represents the primary method of communicating agreed-upon objectives throughout the organization. Once adopted, a budget becomes an important basis for evaluating performance. It promotes efficiency and serves as a deterrent to waste and inefficiency.
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- Time period assumption
Time period assumption is a convenient assumption that accountants can divide the economic life of a business into artificial time periods. The time period assumption...
- Purchase discount
Purchase discount means a cash discount claimed by a buyer for prompt payment of a balance due. The credit terms of a purchase on account may permit the buyer to claim...
- Participative budgeting
Participative budgeting is a budgetary approach that starts with input from lower-level managers and works upward so that managers at all levels participate.
- Change in accounting principle
A change in accounting principle occurs when the principle used in the current year is different form the one used in the preceding year.
- Other revenues and gains
A non operating activities section of the income statement that shows revenues from auxiliary operations and gains unrelated to the company operations.
A factor is a finance company or bank that buys receivables from businesses and then collects the payments directly from the customers.
- Production cost report
A production cost report is the key document management uses to understand the activities in a department; it shows the production quantity and cost data related to that department.