Accounting 203 Chapter 8 Vocabulary

  1. Budget
    A detailed plan for the future that is usually expressed in formal quantitative terms
  2. Planning
    Involves developing goals and preparing various budgets to achieve those goals.
  3. Control
    Involves gathering feedback to ensure that the plan is being properly executed or modified as circumstances change.
  4. Responsibility Accounting
    A system of accountability in which managers are held responsible for those items of revenue and cost—and only those items—over which they can exert significant control. The managers are held responsible for differences between budgeted and actual results. (p. 344)
  5. Continuous budget
    A 12-month budget that rolls forward one month as the current month is completed. (p. 344)
  6. Self-imposed budget
    A method of preparing budgets in which managers prepare their own budgets. These budgets are then reviewed by higher-level managers, and any issues are resolved by mutual agreement. (p. 345)
  7. Master Budget
    A number of separate but interdependent budgets that formally lay out the company’s sales, production, and financial goals and that culminates in a cash budget, budgeted income statement, and budgeted balance sheet. (p. 346)
  8. Sales Budget
    A detailed schedule showing expected sales expressed in both dollars and units.
  9. Merchandise Purchases Budget
    A detailed plan used by a merchandising company that shows the amount of goods that must be purchased from suppliers during the period. (p. 354)
  10. Direct Materials Budget
    A detailed plan showing the amount of raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories. (p. 355)
  11. Direct Labor Budget
    A detailed plan that shows the direct labor-hours required to fulfill the production budget. (p. 355)
  12. Manufacturing Overhead Budget
    A detailed plan showing the production costs, other than direct materials and direct labor, that will be incurred over a specified time period. (p. 357)
  13. Ending Finished goods inventory
    A budget showing the dollar amount of unsold finished goods inventory that will appear on the ending balance sheet. (p. 358)
  14. Cash Budget
    A detailed plan showing how cash resources will be acquired and used over a specific time period. (p. 346)
  15. Product Budget
    A detailed plan showing the number of units that must be produced during a period in order to satisfy both sales and inventory needs. (p. 352)
  16. Selling and administrative expense budget
    A detailed schedule of planned expenses that will be incurred in areas other than manufacturing during a budget period. (p. 359)
Card Set
Accounting 203 Chapter 8 Vocabulary
Chapter 8 Vocabulary