- quantitative plan estimating when and how much cash or other resources will be received and when and how the cash or other resources will be used
budget
There are different ways to formulate budgets
- Top-down versus bottom-up
- Traditional versus zero-based
- Flexible
- Rolling
The master budget has two major categories
operating, financial
- Financial budget
plans use of assets and liabilities > projected balance sheet
o depicts the expectations for cash inflows and outflows
operating budget
- Operating budget – helps plan future
o spans several areas that help plan and manage day-to-day business
Under a “ “ last year’s budget is the starting point for creating the current budget.
traditional budgeting approach
Under a “”, all budget numbers are derived newly each year or budget cycle
zero-based budgeting approach
A “” is based on budgeted sales
static budget
A “” is based on budgeted amounts for actual sales volume.
flexible budget
An “” - spans several areas that help plan and manage day-to-day business
o revenue, sources of revenue
o expenses
operating budget
Preparing a “” first requires preparing the capital asset budget, the cash budgets, and the budgeted balance sheet
financial budget
”” shows the company’s plans to invest in long-term assets
Capital asset budget
”” is the combined budget of all inflows and outflows of cash
cash budget
”” is the estimated assets, liabilities, and equities that the company would have at the end of the year if their performance were to meet its expectations
budgeted balance sheet
”” helps managers analyze results
Variance analysis
”” occurs when revenue is higher than budgeted or expenses are lower than budgeted.
favorable variance
”” is when revenue is lower than budgeted or expenses are higher than budgeted
unfavorable variance
Payroll Accounting involves 3 types of liabilities
- Net amount owed to employees
- Amount deducted from employees on behalf of the government (EI CPP etc.)
- Employer payroll expense (also known as MERCs)
Gross Pay
statutory holidays and overtime
- Vacation pay
”” is the amount of pay that the employee receives after subtracting deductions from Gross Pay
Net Pay
