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Cost Acct. Ch. 8 Def
Term | Definition |
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budget | a financial plan for the future based on a single level of activity; the quantitative expression of a company’s commitment to planned activities and resource acquisition and use |
budget manual | a detailed set of documents that provides descriptive information and guidelines about the budgetary process |
budget slack | an intentional underestimation of revenues and/or overestimation of expenses in a budgeting process for the purpose of including deviations that are likely to occur so that results will meet expectations |
budgeting | the process of formalizing plans and committing them to written, financial terms |
continuous budget | a plan in which there is a rolling 12-month budget; a new budget month (12 months into the future) is added as each current month expires |
financial budget | a plan that aggregates monetary details from the operating budgets; includes the cash and capital budgets of a company as well as the pro forma financial statements |
imposed budget | a budget developed by top management with little or no input from operating personnel; operating personnel are then informed of the budget objectives and constraints |
master budget | the comprehensive set of all budgetary schedules and the pro forma financial statements of an organization |
operating budget | a budget expressed in both units and dollars |
participatory budget | a budget that has been developed through a process of joint decision making by top management and operating personnel |
rolling budget | see continuous budget |
strategic planning | the process of developing a statement of long-range (5–10 years) goals for the organization and defining the strategies and policies that will help the organization achieve those goals |
tactical planning | the process of determining the specific means or objectives by which the strategic plans of the organization will be achieved; is short range in nature (usually 1–18 months) |