Accounting Chapter 22: Budgeting

The process of creating a comprehensive plan for allocating resources to achieve specific financial goals over a defined period.

The process of comparing actual results to planned or standard costs to identify variances and analyze the reasons behind them.

A management approach where decision-making authority is delegated to lower levels of management within different units or divisions.

A decision-making technique that compares the financial implications of different alternatives to determine the most beneficial course of action.

The process of setting prices for products or services that consider both costs and market factors to achieve profitability goals.

A cost accounting technique that assigns costs to activities based on their actual consumption of resources, providing a more accurate understanding of costs.

The process of evaluating and selecting investments that generate the highest return on investment and contribute to long-term financial growth.

A set of guidelines and procedures used to determine the point at which revenue from a sale is recognized as earned and recorded.

The process of determining the value of goods that are still on hand at the end of an accounting period.

A method of inventory valuation that assumes the oldest inventory is sold first, meaning the cost of goods sold is based on the initial purchase prices.

A method of inventory valuation that assumes the most recent purchases are sold first, meaning the cost of goods sold reflects current prices.

A method of inventory valuation that chooses the lower cost between the current market price and the original purchase price. It ensures that inventory is not valued higher than its current worth.

A critical aspect of inventory management that involves keeping track of the movement of goods, protecting against theft, and ensuring accurate inventory records.

An accounting standard that simplifies how companies measure inventory.

A visual representation of how different parts of accounting connect and flow together, providing a holistic understanding of the subject.

Shows how chapters 1-4 integrate within the accounting cycle.

Highlights how chapters 5-17 connect within a set of integrated financial statements.

Shows how chapters 18-26 relate to managerial accounting functions.

A visual representation of the flow of information within a business, starting with transactions and ending with financial statements.

A financial statement that summarizes the financial performance of a business over a specific period.

A financial statement that shows a company’s assets, liabilities, and owner’s equity at a specific point in time.

A financial statement that summarizes the cash inflows and outflows of a business over a specific period.

A financial statement that shows the changes in owner’s equity over a specific period.

A business that buys and sells goods to make a profit.

The cost to purchase goods that will be sold to customers.

The difference between sales revenue and the cost of goods sold.

Costs incurred in running a business, such as rent, salaries, and utilities.

The difference between gross profit and operating expenses.

Revenue or expenses that are not directly related to the main operations of a business.

A financial reporting standard accepted by the accounting profession.

An accounting method that recognizes revenues and expenses when they are earned or incurred, regardless of when cash is received or paid.

The accounting period that aligns with a company's natural business cycle, like the growing season for a farm.

A 12-month accounting period that doesn't necessarily align with the calendar year, often used by businesses for reporting purposes.

A period where a company records its financial transactions in a specific 12-month duration.

A method of accounting that records revenue and expenses only when cash is received or paid.

The process of determining the point at which revenue from a sale is recognized as earned and recorded.

A method of inventory valuation that assumes the oldest inventory is sold first, meaning the cost of goods sold is based on the initial purchase prices.

A method of inventory valuation that assumes the most recent purchases are sold first, meaning the cost of goods sold reflects current prices.

A method of inventory valuation that chooses the lower cost between the current market price and the original purchase price. It ensures that inventory is not valued higher than its current worth.

A critical aspect of inventory management that involves keeping track of the movement of goods, protecting against theft, and ensuring accurate inventory records.

An accounting standard that simplifies how companies measure inventory.

A management approach where decision-making authority is delegated to lower levels of management within different units or divisions.

A decision-making technique that compares the financial implications of different alternatives to determine the most beneficial course of action.