Budget Terminology

Hasna Askar IV th sem. MBA Reg. No. : 330

April 18, 2012

Introduction
Budget (from old French bougette, purse) is a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending. In other terms, a budget is an organizational plan stated in monetary terms. The procedure for preparing plan in respect of future financial and physical requirements is generally called Budgeting. Thus budgeting is a forward planning and involves the preparation in advance of the quantitative as well as financial statements to indicate the intention of the management in respect of the various aspects of the business.

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Definition
1] Budgeting is a kind of future accounting in which the problems of future are met on the paper before the transactions actually occurs. - W. J. Vatter. 2] A financial and / or quantitative statement pursued during that period for the purpose of attaining a given objective. It may include income, expenditure and the employment of capital. -Institute of Cost and Management Accountants, England.

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Budget Terminology

Forecast:A forecast is a statement of probable events. -I.C.M.A. London.

Budget period: Budget period is the period for which a budget is prepared and employed. -I.C.M.A. London.
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Budget centers:Budget centre is a section of organisation of an undertaking defined for the purpose of budgetary control. -I.C.M.A. London.

Budget manual:A budget manual is a document which sets out the responsibilities of the persons engaged in the routine of, and the forms and records required for, budgetary control. -I.C.M.A. London.

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Budget officer or budget controller:A budget controller is a person appointed by the chief executive with an objective to link up the various functions and to co-ordinate their efforts in the preparation of the budget. Budget committee:A budget committee is a group of representatives of various important departments in an organization. This committee plays a vital role in the preparation and execution of budget.

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Budget key factor:The factor the extent of whose influence must first be assessed in order to ensure that the functional budgets are reasonably capable of fulfillment. -I.C.M.A. London. This is also known as:i)Limiting factor, ii)Principal budget factor, iii)Governing factor.

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"A budget tells us what we can't afford, but it doesn't keep us from buying it." -William Feather

April 18, 2012