Key Concepts in Budgeting and Responsibility Accounting

Flashcards covering key accounting concepts related to budgeting and responsibility accounting.

Cash Receipts

Amounts collected from customers for sales made on credit.

Accounts Receivable

An asset account that represents money owed by customers for sales made on credit.

Accounts Payable

A liability account that represents money owed for purchases made on credit.

Budgeting Cash Flows

Managing and estimating the inflow and outflow of cash within a business.

Cash Collection Schedule

A plan that outlines when cash inflows from credit sales are expected to be collected.

Master Budget

A comprehensive financial plan that outlines expected revenues, expenses, and cash flows.

Cost of Goods Sold (COGS)

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

Sales Budget

A forecast of expected sales revenue for a specific period.

Variance

The difference between budgeted amounts and actual amounts.

Profit Center

A department or unit within a company for which both revenues and costs are measured.

Segment Margin Statement

A financial report that breaks down revenues and expenses by specific segments or departments.

Cash Payment Schedule

A plan that outlines the expected outflows of cash for purchases made on credit.

Cost Center

A department or unit within a company that has control over costs but not revenues.

Investment Center

A business unit responsible for its own revenues, costs, and assets.

Cash Budget

A budget that estimates the cash inflows and outflows over a specific period.

Responsibility Accounting

An accounting system that measures the performance of different segments of a company and holds managers accountable.