Quiz 10: Strategy and the Master Budget

Business

The budgeting is the process of preparing one or more than one budget. A budget is a financial strategy for a specific forthcoming period of time. A budget is prepared and swotted on an intervallic basis. The attainment of the company's strategic vision depends on the performance assessment. Benefits of budgeting are as follows: 1. A budget is a motivational device: All the results expected from the employee are defined in the budget. The employee clearly knows what is expected of them. The budget acts as a motivational factor for the employee. If employees participate in the budgeting process than they take the budget standards positively. 2. The budget acts as a basis for performance evaluation: Management takes a few budgetary control steps to make certain that the goals and objectives that were recognized during the planning stage are achieved. It helps to evaluate the strength and weaknesses of all the segments and ensures that all operate as per the organizational policies. 3. The budget acts as a guide for managers: Managers make decisions based on the budget. It helps the manager to deal with the problem which might crop up in the future.

A budget is a financial strategy for a specific forthcoming period of time. A budget is prepared and swotted on an intervallic basis. The budget acts as a guide for managers. Managers make decisions based on the budget. The budget acts as a basis for performance evaluation. The attainment of the company's strategic vision depends on the performance assessment. A budget is a motivational device. The master budget refers to a widespread financial plan for the entire company. Management takes a few budgetary control steps to make certain that the goals and objectives that were recognized during the planning stage are achieved. The master budget includes both the operating budget and the financial budget. The operating budget helps us to recognize the resources needed to implement strategic projects. They are the plans for different stages of operations like production, purchasing, research and development, and marketing budget. A set of operating budget concludes in a budgeted income statement. The financial budget focus on sources and uses of the funds. They include both budgeted operation and capital expenditure. A few financial budgets are cash budget, budget for cash flow, budgeted balance sheet and capital expenditure budget.

A budget is a financial strategy for a specific forthcoming period of time. A budget is prepared and swotted on an intervallic basis. The budget acts as a guide for managers. Managers make decisions based on the budget. The budget acts as a basis for performance evaluation. The attainment of the company's strategic vision depends on the performance assessment. A budget is a motivational device. The master budget refers to a widespread financial plan for the entire company. Management takes a few budgetary control steps to make certain that the goals and objectives that were recognized during the planning stage are achieved. The master budget includes both the operating budget and the financial budget. The short-range objectives aid as the foundation for the preparation of a master budget. The master budget is the compilation of the budget of the subunits into a well-defined cohesive plan of action for the specific budget period which can be monthly, quarterly or yearly. The conclusion of the master budgeting process leads to the creation of the proforma financial statement.

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