Vision & Mission

Question 1

Vision statement

Answer 1

A Vision statement focuses on TOMORROW and what an organization WANTS to ultimately become
The Vision statement gives the company direction, it is the FUTURE of the company

Question 2

Mission Statement

Answer 2

A Mission statement focuses on TODAY and what an organization DOES to achieve it
The Mission statement drives the company, it is what the company does

Question 3

Strategic budget

Answer 3

The Strategic Budget evaluates the future success potential with a mid-to-long-term perspective in mind

Question 4

Operational Budget

Answer 4

The Operational Budget only forecasts the goals of the company with a one to two year horizon target in mind

Question 5

Strategic Plan

Answer 5

The Strategic Plan determines the products and services offered

Question 6

Operational Plan

Answer 6

The Operational Plan is developing its short-term targets according to the strategy

Question 7

4 aspects of Control Process

Answer 7

1. To develop plans to achieve the objectives
2. To communicate information about the proposed plans
3. To motivate people to accomplish the plans
4. To report the performance

Question 8

Budgetary control should assist management in three ways:

Answer 8

1. It provides the top management with a summarised picture of the results to be expected from the proposed plan
2. It serves as a guide to the executives and the department heads responsible for the individual segments of the company‘s operations
3. It serves to measure the performance, since budget deviations reflect the organizations failure to achieve the plan. This supports the management in controlling the activities of individuals and the overall performance of the company.

Question 9

Controller’s main duties

Answer 9

The preparation of the budget
To collect each departmental budget
To summarize all detailed information
To discuss the draft with the top management

Question 10

Why Budgets fail

Answer 10

Manipulation - too much emphasis on “correct” budgets
Incomplete variance explanations - What’s the reason for the increase? Underlying cause for variances
Blaming or distorting -
Lack of recommendations or actions

Question 11

What’s the purpose of Budgeting

Answer 11

it gives an idea how well income goals are being met, whether or not the expenses are in line with predicted levels, and how well the controls are working.

Question 12

What is historical-based budgeting?

Answer 12

Erroneous way, easiest way to get through budgeting without real work. Copying last year’s expense and put a few percent on top for inflation.
! Dont make increase or reductions automatically!