budgets

HideShow resource information
budget
a financial plan estimating costs and revenue, enabling comparisons with actual data later
1 of 12
variance
the difference between the budgeted figure and actual figure
2 of 12
favourable
a better actual figure than budgeted
3 of 12
adverse
a worse actual figure than budgeted
4 of 12
extrapolation
using previous years data and assuming that past trends will continue in the future
5 of 12
zero based budget
budgets start with no assumptions based on experience. managers are asked to bid for funds and negotiate on an agreed budget
6 of 12
advantages of budgets
budgets set targets, so motivate staff
7 of 12
advantages of budgets
budgets can identify loss making areas in the business
8 of 12
advantages of budgets
banks/lenders may want to see/monitor budgets before lending money
9 of 12
disadvantages of budgets
budgets can be hard to plan without historical data
10 of 12
disadvanatges of budgets
budgets are an estimate and are not 100% accurate
11 of 12
disadvanatges of budgets
changing economy, trends, competition can affect actual figure in a budget
12 of 12

Other cards in this set

Card 2

Front

the difference between the budgeted figure and actual figure

Back

variance

Card 3

Front

a better actual figure than budgeted

Back

Preview of the back of card 3

Card 4

Front

a worse actual figure than budgeted

Back

Preview of the back of card 4

Card 5

Front

using previous years data and assuming that past trends will continue in the future

Back

Preview of the back of card 5
View more cards

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Financial Planning resources »