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Budgeting and Forecasting
Budgeting and forecasting are business processes essential to a company’s operations. Budgeting involves planning for revenues and expenses. Forecasting is a method of predicting trends based on historical and current events.
1,416 Questions
Why does a balance sheet tally?
The balance sheet is a simple and at the same time very complex and detailed account of the company. The balance sheet shows the amount of assets a company holds, it shows the company's liabilities, or what they owe for one reason or another (not monthly expenses) and what the owners or stakeholders have in the company. Remember the accounting equation.
Assets = Liabilities + Owners Equity
Or it could also be stated
Assets - Liabilities = Owners Equity
Written this way makes much more sense to me, what it tells me is that after Liabilities are removed from the company's assets (assets - liabilities) we know how valuable the company is to the owners and whether or not they can meet their obligations to Stock Holders and Creditors.
---- I seriously misread the question as "what" instead of "why". However I will leave my previous answer as I think it also answers the question of "why" as well as "what".
Another quick reason is, if you take a company's assets deduct the liabilities (what the company owes) you will achieve what the company is worth once all debts are paid (aka Equity). Therefore it stands to reason if you add the Equity of a company to what it owes (liabilities) it's going to give you the amount of assets a company has. For every transaction there is an equal and opposite transaction.
If I buy a car, that car is an asset, even though the note I will be paying on the car is considered a liability. For example, I purchase a car for $50,000 (nice car huh), I pay $10,000 cash for that car, the way it's going to look on my books is as follows.
Assets (car $50,000) = Liabilities (note payable $40,000) + Owners Equity (Car $10,000)
with just the dollar amounts it looks like this.
$50,000 = $40,000 + $10,000
It shows that if I sale the car for $50,000, pay what is left owing of $40,000 I will have equity of only $10,000. These figures change as payments are made and as the liability decreases, my equity will increase.
The important of computer in accounting system?
Accountants and accounting systems have been around for many years.
Why do business use computers in accounting?
for booking's an example: flights tickets and passport will be searched in the computer.
In business it helps organization to accomplish routine task.
Duty Free Replenishment CertificateDuty Free Replenishment Certificate is issued to a merchant-exporter or manufacturer-exporter for the import of inputs used in the manufacture of goods without payment of Basic Customs Duty, Surcharge and Special Additional Duty. However, such inputs shall be subject to the payment of Additional Customs Duty equal to the Excise Duty at the time of import.
- Duty Free Replenishment Certificate shall be issued only in respect of export products covered under the SIONs as notified by DGFT.
- Duty Free Replenishment Certificate shall be issued for import of inputs, as per SION, having same quality, technical characteristics and specifications as those used in the end product and as indicated in the shipping bills. The validity of such licences shall be 12 months. DFRC and or the material imported against it shall be freely transferable.
- The Duty Free Replenishment Certificate shall be subject to a minimum value addition of 33%
- The export products, which are eligible for modified VAT, shall be eligible for CENVAT credit owever, non excisable, non dutiable or non centrally vatable products, shall be eligible for drawback at the time of exports in lieu of additional customs duty to be paid at the time of imports under the scheme.
- The exporter shall be entitled for drawback benefits in respect of any of the duty paid materials, whether imported or indigenous, used in the export product as per the drawback rate fixed by Directorate of Drawback (Ministry of Finance). The drawback shall however be restricted to the duty paid materials not covered under SION.
- The export under deffered payment scheme to Russia is also allowed for issuance of DFRC.
In finance what is cross-cutting?
Cross-cutting in finance is a new way to allocate budgets, especially in the government. Funding and services are based on an area, not by agency. Cross-cutting focuses on identifying and eliminating unnecessary duplication of resources and services within a defined area. So cross-cutting involves looking beyond one particular agency to the linkages between agencies. The goal is efficiency, time/resource/money savings, and improvement in services.
Think of it this way...you have $200. About 1/4th of it is for housing, so that leaves you will $150. You need heat, air conditioning, lights, and water...subtract another $30. Now you have $120. You need to eat, right...Bang, $50 down the tubes. Which leaves $70. Got to get to work! More money...$25. Leaves $45.
So $45 is all you got to play with. Entertainment, gifts, the whole rest of your life. How would you have known all this if you hadn't made a budget? A budget tells you how much money you can spend AFTER all the necessaries have been paid. Don't forget your retirement...five dollars in the savings account. So you have $40 out of that $200 that you started with. While the $200 sounds excellent...it doesn't sound so good after all the basics are covered.
The Budget can keep you financially afloat in hard times.
Customers buy on credit for a few reasons, the main one is that at the time of purchase they may not have the required cash for the purchase. Also, customers will buy on credit because it's easier than carrying cash, they can keep their cash on hand and make payments toward the purchase instead of being out the amount of cash at that time.
How long does it take to complete ACCA?
depends on how long u take to finish ure papers. u can take 4 papers in one sitting and there are 2 exam sittings in one yr. (june and december). there are a total of 14 papers, if u dont take exemptions.
Definition for the meaning of the budgeting process?
Refers to the process by which governments or organizations create and approve a budget. Budgeting is the setting of expenditure levels for each of an organizationâ??s functions.
What two fundamental concepts are the main concerns of physics?
The study and understanding of matter and energy and their interactions.
What is the difference between financial budget and a financial budget?
There is no difference between them.. Their difference only is how you understood about financial budget.. :)
What is main difference between capital budget and revenue budget?
While the capital budget and revenue budget are both budgets, the capital budget is incorporated for the long term. A revenue budget is made for the short term.
What are the topics covered in management accounting?
Objective: This course aims at introducing the student to how useful accounting information is prepared, and how it is effectively used, for the purpose of decision-making.
Course content: Overview and introduction to management accounting Cost Concepts, Classifications, Terminology and behavior, Job costing and Activity Based Costing, inventory Costing and Capacity Analysis, Cost-Volume-Profit Analysis, Short-term Decision-Making and Relevant Costing, Long-term Decision Making, Pricing Decisions, Master Budget and Flexible Budgeting and variance analysis.
Are fixed costs always irrelevant?
No fixed costs are not always irrelevant. Some fixed costs may differ among the alternatives and hence will be relevant. e.g. When figuring the incremental cost of the more expensive car, the relevant costs would be the purchase price of the new car (net of the resale value of the old car) and the increases in the fixed costs of insurance and automobile tax and license.
CESS is a synonym for tax, duty, fee, etc.
When tax is applied to income, its called INCOME TAX...
When tax is applied to goods, its called DUTY, say, EXCISE DUTY, CUSTOMS DUTY, etc...
When tax is applied to a particular purpose, its called CESS, say, EDUCATION CESS, HIGHER & SECONDARY CESS...
Explain Petty Cash Transactions?
Petty cash transactions are small, miscellaneous purchases or expenses. In business, there is usually a separate cash fund for this type of transaction.
How ratios in ratio analysis are computed and used?
Ratio analysis is used to evaluate relationships among financial statements items; these ratios are used to identify trends overtime for one company or to compare two or more companies at a point in time. It focuses on three aspects of business: liquidity, profitability and solvency.
What is the Purpose of the flexible budget?
compare actual and budgeted results at virtually every level of production
What is a cash budget and outline the purpose of the cash budget?
An estimation of cash inflows and outflows for a business or individuals for a specific period of time.
It is often prepared to assess whrther the entity has sufficient cash to fulfill regular operations or too much cash is being left in unproductive capacities.
