Lesson 20 - Budgeted Income Statement Flashcards
1
Q
The template for the budgeted income statement is…
A
The same as the regular income statement.
2
Q
The purpose of the budgeted income statement is to…
A
Predict future revenues and expenses in order to predict Net Profit/Loss for the period.
3
Q
The budgeted income statement is an example of a…
A
Budgeted report
4
Q
What are the 4 steps of the budgeting process?
A
- Budgeted reports
- Actual reports
- Variance reports
- Decisions
5
Q
If a business budgets a Net Loss, it should implement strategies to…
A
Increase budgeted revenues
OR
Decrease budgeted expenses
6
Q
How might a business increase its revenues?
A
- Increase the use of effective advertising.
- Increase the sale of complementary goods.
- Improve its inventory mix.
7
Q
How might a business reduce its expenses?
A
- Find cheaper suppliers
- Renegotiate with existing suppliers.
- Buy in bulk to reduce cost per unit.
- Find alternatives
8
Q
How do you calculate Net Profit/Loss?
A
Revenues - Expenses
