budgets

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