ACC 310F - The University of Texas at Austin McCombs School...

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The University of Texas at Austin McCombs School of Business, Business Foundations Program ACC 310F: Foundations of Accounting Class Notes – Chapter 9 Page 1
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Overview In the overview to the notes for chapters 5-7, you considered planning a vacation and trying to determine its anticipated cost. If you didn't have the money to pay for the vacation, but it wasn't planned for some time, do you think you could save money in time and reach your goal? Planning your financial future (for a vacation, purchase of a car, retirement, etc.) just takes a little, well, planning. In this section, you'll learn how you or any business can plan its financial future. Master Budget Sales Budget Purchases or Production Budget (DM, DL, OH) Selling and Administrative Budget Budgeted Income Statement Capital Expenditure Budget Cash Budget Budgeted Balance Sheet Sales Budget Page 2
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Purchases Budget Cash Budget Page 3
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Where does your money go each month? Developing a personal budget will help you understand the answer to that question which in turn should help you spend your money more wisely, save for your future and build your net worth. The first part of a budget is your income, or how much money you receive each month. This can include paychecks, financial aid, or earnings from investments. Once you know what your monthly income is, you can use a budget to help make sure you don't spend more than you earn; this will help you reduce your need for debt and free up extra cash for savings or retirement. The next part of a budget is your monthly expenses or how you spend your money each month. Start by tracking your spending for a month; gather bills and receipts, no matter how small the amount. Where appropriate you can put various expenses into meaningful categories like eating out or auto expenses. Its particularly helpful to categorize which of your expenses are committed expenses such as rent and insurance versus which are discretionary expenses for things you like, but don’t have to spend money on. As time goes by you can analyze your planned expenses versus your actual expenses. In the short run you may want to change your discretionary expenses, but in the long run even your committed expenses can be changed. You can use the form on the page below to help you get started; an Excel version is posted to Blackboard. Page
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This note was uploaded on 06/25/2011 for the course ACC 310F taught by Professor Verduzco during the Summer '07 term at University of Texas at Austin.

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ACC 310F - The University of Texas at Austin McCombs School...

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