Budgeting

 
  • Budget- projection/ plan for the future generation and expenditure of money in the business. 

    • Cash budget- shows the anticipated inflow and outflow of cash in the business (predicting bank balance) 

    • Only deals with receipts and payments, actual cash coming into and out of the business

    • Bad debts and depreciation are non-cash expenses

    • Zero base budget- budget started from scratch, does not consider past outflow and inflow of cash to determine future inflow and outflow from the business 

    • Capital budget - a projection of when and from where the business will receive a capital injection 

    • Long term budget - prediction of the finances of the business, usually after 20 years, or even 20 years

    • Medium-term budget  - a budget that will predict the finances of the business in 5 years or more

References

  • Anon., 2007. The Answer series: Grade 11 Accounting. 2007 ed. Cape Town: The Answer.

  • Anon., 2019. Investopedia. [Online]. Available at: https://www.investopedia.com/ [Accessed 3 October 2019].

  • Doctor, K., 2015. FLIPHTML5. [Online]. Available at: http://fliphtml5.com/fkul/mgtf/basic [Accessed 1 October 2019].

  • T Hall, D. W. P. S. A. A. P. G. P. F., 2017. Accounting Study Guide. 2016 ed. Musgrave: New Generation Publishers .

Neha Pillay (2019)