budget and budgeting

Question 1

difference between budget and forecast:

Answer 1

-forecast is a prediction of the future state of the environment
-a budget is a plan for the future time

Question 2

master budget=

Answer 2

• in a business there is not one budget
• the master budget summarises all the individual operating budgets and comprimises of a budgeted income statement,financial position statement and a cash budget
  -THEY CAN BE BOTH HORIZONTALLY AND VERTICALLY LINKED

Question 3

preparing cash budgets:

Answer 3

receivables/debtors= the cash you have not received from the sales/your customers
payables/creditiors= the cash you have not paid for the prchases

Question 4

budgeted ending balance of cash

Answer 4

cash at end of previous month+
trade receivables-
trade payables+
cash sales for new month-new cash purchases-
all other expenses

Question 5

most important budget target is

Answer 5

profit target