Budgeting

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  • Created by: TomD2411
  • Created on: 13-05-16 10:11
Budget
A budget is a financial plan for the future operations of the business. Budgets are used to set targets to monitor performances and control operations.
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Variance analysis
Variance analysis is one of the methods used to monitor company performance. It is the comparison of what actually happened with what the business budgeted (planned to happen).
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Adverse variance
An adverse variance occurs when the business actual results are worse than those anticipated and planned for in the budget.
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Favourable variance
A favourable variance occurs when the actual results are better than those anticipated and planned for the budget.
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Master budgets
Businesses often create a master budget compiled from the individual budgets. This allows owners and managers to get an idea of how the cumulative effect of the budget decisions is likely to impact on its profitability.
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Other cards in this set

Card 2

Front

Variance analysis is one of the methods used to monitor company performance. It is the comparison of what actually happened with what the business budgeted (planned to happen).

Back

Variance analysis

Card 3

Front

An adverse variance occurs when the business actual results are worse than those anticipated and planned for in the budget.

Back

Preview of the back of card 3

Card 4

Front

A favourable variance occurs when the actual results are better than those anticipated and planned for the budget.

Back

Preview of the back of card 4

Card 5

Front

Businesses often create a master budget compiled from the individual budgets. This allows owners and managers to get an idea of how the cumulative effect of the budget decisions is likely to impact on its profitability.

Back

Preview of the back of card 5

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