Professional Documents
Culture Documents
Unit 4 - Budgeting
Unit 4 - Budgeting
Chapter 7
Introduction to Budgets
and Preparing the Master Budget
A zero-based budget:
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Copyright © 2014 Pearson Education 7 - 13
Types of Budgets
Master budget
Long-range plans…
Rolling budgets...
1. Supporting data
1. Basic data
a. Sales budget
b. Cash collections from customers
c. Purchases and cost-of-goods sold budget
d. Cash disbursements for purchases
e. Operating expense budget
f. Cash disbursements for operating expenses
2. Operating Budget:
Prepare budgeted income
statement using basic data in step 1.
Sales
budget
Budgeted purchases:
= Desired ending inventory
+ Cost of goods sold
– Beginning inventory
Purchases
Rent
Depreciation
Insurance
Salaries