Week 6, LO 1 Demo

Week 6, LO 1 Demo - Week 6 Week 6 Skill Building...

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Week 6 Week 6 Skill Building Demonstration Problem 1 Understand why organizations budget and the process they use to create budgets . Learning Objective 1 Basic Framework of Budgeting A budget is a quantitative plan for acquiring and using resources over a specified time period. A master budget refers to a summary of a company’s plans including specific targets for sales, production and financing activities. A budget period usually covers the company’s fiscal year. Budgets are used for two distinct purposes- planning and control. Planning involves developing goals and preparing various budgets to achieve those goals. Control involves the steps taken by management to increase the likelihood that all parts of the organization are working together. Advantages of Budgeting 1. Budgets communicate management’s plans throughout the organization 2. Budgets force managers to think about and plan for the future. 3. The budgeting process is a means of allocating resources to those
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This note was uploaded on 04/21/2011 for the course ACTG 211 taught by Professor Staff during the Spring '08 term at Ill. Chicago.

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Week 6, LO 1 Demo - Week 6 Week 6 Skill Building...

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