Key Concepts in Budgeting and Accounting

These flashcards cover key vocabulary terms related to budgeting cash flow, accounts, and management practices in accounting.

Budgeting Cash Flow

The process of estimating cash inflows and outflows to manage business finances efficiently.

Accounts Receivable

An asset account that records money owed to a company from customers for sales made on credit.

Accounts Payable

A liability account that records money a company owes to suppliers for purchases made on credit.

Cash Receipt Schedule

A document used to track expected cash inflows from various sources, including cash and credit sales.

Sales Budget

An estimate of expected sales in units and revenue for a specific period, forming the foundation of the budgeting process.

Production Budget

A budget that outlines the number of units a company needs to produce in order to meet sales demands.

Master Budget

A comprehensive financial plan that consolidates all budgeted financial plans for an organization.

Cost of Goods Sold (COGS)

The direct costs attributable to the production of the goods sold by a company.

Variance

The difference between budgeted and actual performance, used to assess financial performance.

Cost Center

A department or function within an organization responsible for controlling costs.

Profit Center

A segment of a business responsible for generating revenues and controlling costs.

Investment Center

A unit within an organization responsible for generating profit and managing assets.

Cash Collection

The process of gathering cash payments owed from customers based on credit sales.

Whiteboard Tips

Visual aids or strategies suggested for organizing information effectively during budgeting tasks.

Segment Margin Statement

A financial statement that measures the profitability of different segments or divisions within a company.

Indirect Costs

Costs that cannot be directly traced to a specific product or service but are incurred in the overall operation.