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| Budget | A formal statement of future plans, usually expressed in monetary terms. (See page(s) 1342) |
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| Budgeted balance sheet | A managerial accounting report that presents predicted amounts of the company’s assets, liabilities, and shareholders’ equity as of the end of the budget period. (See page(s) 1357) |
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| Budgeted income statement | A managerial accounting report that presents predicted amounts of the company’s revenues and expenses for the budget period. (See page(s) 1357) |
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| Budgeting | The process of planning future business actions and expressing them as formal plans. (See page(s) 1342) |
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| Capital expenditures budget | A plan that lists dollar amounts to be received from disposing of equipment and dollar amounts to be spent on purchasing additional equipment if the proposed production program is carried out. (See page(s) 1353) |
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| Cash budget | A plan that shows the expected cash inflows and outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans. (See page(s) 1354) |
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| Continuous budgeting | The practice of preparing budgets for each of several future periods and revising those budgets as each period is completed; as one period is completed, a new budget period is added, with the result that the budget always covers the same number of future periods. (See page(s) 1346) |
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| General and administrative expense budget | A plan that shows the predicted operating expenses not included in the selling expenses budget. (See page(s) 1352) |
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| Manufacturing budget | A plan that shows the predicted costs for materials, direct labour, and overhead to be incurred in manufacturing the units in the production budget. (See page(s) 1363) |
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| Master budget | A comprehensive or overall formal plan for a business that includes specific plans for expected sales, the units of product to be produced, the merchandise (or materials) to be purchased, the expenses to be incurred, the long-term assets to be purchased, and the amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet. (See page(s) 1346) |
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| Merchandise purchases budget | A plan that shows the units or costs of merchandise to be purchased by a merchandising company during the budget period. (See page(s) 1350) |
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| Production budget | A plan showing the number of units to be produced each month. (See page(s) 1363) |
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| Rolling budgets | As each budget period goes by, a firm adds a new set of budgets for the next period to replace the ones that have lapsed. (See page(s) 1346) |
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| Safety stock | Inventory on hand to reduce the risk of running out; a quantity of merchandise or materials over the minimum needed to satisfy budgeted demand. (See page(s) 1351) |
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| Sales budget | A plan showing the units of goods to be sold and the revenue to be derived from sales; the starting point in the budgeting process because the plans for most departments are related to sales. (See page(s) 1349) |
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| Selling expense budget | A plan that lists the types and amounts of selling expenses expected during the budget period. (See page(s) 1352) |
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| Slack | The deliberate overstatement of estimated expenses or understatement of estimated revenue to make budget targets easier to reach. (See page(s) 1360) |