Financial Accounting and Budgeting
Accounting:
measuring technique or echos economic and financial records.
Echo Economy:
the customer pays on a deferred basis. Eg loans.
Financial Echo:
the customer pays in advance. Example: beep card. Cash payment echos both simultaneously.
Right key:
value that is assigned to a business (image, customers, etc..)
Equity:
contribution of partners, capital, reserves, profit for the year.
Accounts T: When an asset increases in the D on the H decreases. When a person increases the H in the D decreases.
Debits:
Debits> Lending and Cargo> Fertilizers.
Credit Balance:
Credits> debits or Fertilizers> Charges.
Mercaderia = finished goods account. Expenditure:
elogacion, discharge or release that is not part of the production process. Eg expenditure management.
Cost:
elogacion, discharge or release directly related to the production process.
Lost:
loss of capital or assets. EJ: fire, theft.
MOD + MPD = prime cost, MOD + CIF = cost conversion. Point Balance = fixed cost / (price – variable cost).
Budgets:
management tool that is principally devoted to provide, coordinate and control in monetary figures the development of future activity of a company over a período.Ayuda to decision making.
Advantages of Budgets:
It forces management to set objectives and targets in advance. Contains control devices for assessing the management. Ensures coordination between units empresa.Establece there an organizational structure facilitates the efficient allocation of resources.
Limitations of the Budget:
Not an exact measurement. Is a very flexible planning tool. The results are obtained when the budget starts to run.
It is not a substitute for the administration, is only a support tool.
Ppto Period of:
It depends on the nature of the business or the needs of information required, generally 1 year, can be coordinated with the accounting period.
Ppto. CAPITAL: Refers to the establishment of flows caused by a specific project investment.
OPERATING BUDGETS:
have connection with the operation of the organization or money.
BUDGETS FINANCIAL: These refer to financial decisions.
Recurrent budget:
It is named for that are made by a fixed number of periods.
Flexible Budget:
Looking leave set variables that change value over time.
BUDGETS LEVEL:
Determines the budgets at various levels of scheduled activity. PARTIAL BUDGET: Refers to a single activity is budgeted in a vacuum.
Zero-based budgeting: Based on the assumption that just begins its activities in the organization.
Budget System: A set of assumptions that are related to each other. This intended to build and implement the objectives of the company, tool planning, coordination and control.
Objectives of the Budget as a planning tool:
Allows to estimate the results of the company for a specified period, serves to set targets and standards, is used to assign responsibilities showing future plans, and guide decision making.
Objectives of the Budget as a tool for coordination
Coordinate the activities of the company to achieve the ultimate objectives, makes possible an effective administrative action.
Purpose of the budget as a tool of control:
Periodic assessment of the progress of the operation.
Operation budgetary system
ENTRY:
the internal and external information, quantifiable or not.
PROCESS:
the breakdown, registration and order of the information obtained.
OUTPUT:
budgets are proper.
RETROLALIMENTACION:
the comparison of data and analysis of these to re-plan.
Stages for the implementation of budgetary control:
Set standards for performance, measure the actual results, compare actual results with budgeted, produced variations Analyze, determine corrective measures.
Ppto Sales:
This is the starting point of the budget system because based on sales production is planned, costs, associated costs, etc..
Ppto. Sales Revenue:
This project refers to the actual income from sales of rotation, in whom we consider the projected gross sales and credit policies to business customers with their respective bad debts.
Ppto Production:
These variables are : projected sales in physical units and the final inventory policy for finished goods.
Budget Box:
Represents the behavior of cash flows at all times to maintain sufficient liquidity for a company can meet all its commitments. From the cash budget gives the following information: Tickets for money and its sources, out of money and its uses, cash balance and its financing or use.
Or Projected Balance Sheet Pro Forma Balance:
The Projected Balance Sheet is a state based in every budget data collected earlier, gives a rare glimpse of the future state of the Assets and Liabilities of the Company. Projected General Balance is a fundamental state of the company as we show in advance what will be the heritage of it.
Projected Income Statement:
It is a state project in which synthesized information from various budgets previously performed allows us to show how it is produced the economic performance of the company.
Production budget
Projected sales (units)
+ Ending inventory in finished goods.
– Initial inventory in finished articles.
Quantity to be produced.
BUDGET DIRECT CONSUMPTION OF RAW MATERIAL
Quantity to be produced.
* Usage rate
Direct material consumption (units)
* Unit Cost
Direct material consumption value ($)
BUDGET DIRECT PURCHASE OF RAW MATERIAL
Consumption of raw materials directly
MPD + Final Inventory
MPD-Initial Inventory
Quantity to buy
* Unit Cost ($)
Net purchases ($)
+ VAT tax credit.
Gross purchases
BUDGET FOR CONSUMPTION OF DIRECT LABOR
Quantity to produce
* Usage rate
Consumption MOD (hrs)
* Value of time
Consumption of recovered MOD ($ $)
CONSUMER BUDGET indirect manufacturing costs CIF
Distribution Base
* Share
Consumption of CIF value ($)
BUDGET COST OF PRODUCTION
MOD Consumption
+ Consumption of MPD
+ CIF Consumption
Total Cost of Production
BUDGET VAT
Iva tax debit
– VAT tax credit
VAT payable or recovering