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Budgeting Essay

290 words - 2 pages

A budget is a document that projects the financial goals and results of a company for a particular time frame. It can include everything from a basic income statement to results and financial position of a company for one or more future periods. This paper will review the various types of budgets including master, sales, cash, and production as well as there potential impact on decision making.
Type of Budget/Use | Included Information | Potential decision making |
Master: summarizes projected activity keeping key leaders on the same page
| * Cash budget * Budgeted income statement * Interrelated budgets from various departments | Plan and set performance objectives |
Sales: itemizes sales expectations for the budgeted period ...view middle of the document...

| * Revenue * Expenses * Finances * Considerations | Assess sustainability to operate and misapplication of cash funding |
Production: calculates the number of units of products that must be manufactured | * Sales forecast * Planned amount of finished goods inventory to have on hand | Determine other budgets (direct labor, direct materials ) |

Budgets are excellent tools when trying to establish and maintain fiscally sound organizations. In evaluating each type of budget, there is recognition that they serve a multitude of purposes. By comparing goals and purposes of master, sales, cash, and production budgets, one is able to make a sound decision regarding the past, present, and future financial results.
Kimmel, P.D., Weygandt, J.J., & Kieso, D.E. (2011). Accounting: Tools for basic decision making (4th ed.). Hoboken, New Jersey: John Wiley & Sons, Inc..
Sales budget-accounting. (2014). Retrieved from
Cash budget. (2014) Retrieved from

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