...A budget is a statement containing a forecast of revenues and expenditures for aperiod of time, usually a year. It is a comprehensive plan of action designed toachieve the policy objectives set by the government for the coming year. A budget isa plan and a budget document is a reflection of what the government expects to doin future. While any plan need not be a budget, a budget has to be necessarily aplan. It shows detailed &location of resources and propod taxation or othermeasures for their realisation. More specifically, a budget contains information about: i) plans, programmes, pro~ects, chemes and activities-current as well as new sydwm-I proposals for the coming year;ii) resource position and income from different sources, including tax and non-taxrevenues;iii) actual receipts and expenditure for the previous year; andiv) economic, statistical and accounting data regarding financial and physicalperformance of the various agencies and organs of the government. A budget is, however, not a balance sheet (exhibiting total assets and liabilities) ofthe government on a particular date but refers only to information explained above.It is a financial blueprint for action and is, therefore, of great advantage togovernment departments, legislatures and citizens. Merits i) As already stated, the rationale for this type of classification was the need tofacilitate control and accountability. Inter-agency, inter-organiation and inter-department comparison of expenditure could...
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...source classes. Do they agree with those sources discussed in this chapter? Are expenditures reported by character? List the functional classifications under the current character classification. Do those classifications agree with those listed in the example shown in this chapter? Are Other Financing Sources and Uses presented separately? Does your report show transfers in? Transfers out? Capital leases? Proceeds of bonds? property, sales and use, and other taxes, license and permits, intergovernmental, charges for services, fines and forfeitures, investment earnings, rents and royalties, contributions/donations, and miscellaneous. Yes. Yes. General government, judicial, security/person & property, physical environment, mental and physical health, and culture and recreation. Yes. Yes. Yes. Yes. No. No. b) Look at the Budgetary Comparison Schedule in the RSI section of your annual Report (or Budgetary Comparison Statement, if that is used by your government) for the General Fund. Is the budgetary format used, or is the schedule in the format used for the Statement of Revenues, Expenditures, and Changes in Fund Balances? Does the report reflect the original budget, revised budget, and actual figures? Are variance columns presented comparing the actual with the revised budget and comparing the original with the revised budget? Is reconciliation between the budgetary basis of accounting and GAAP presented on the budgetary comparison schedule or in a separate...
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...Cost Classifications Consult Ch. 6 & 7 of Health Care Finance and other sources to complete the form. This worksheet requires you to match the definitions and examples of types of cost, and the types of centers where costs occur. Part 1: For each term in Column A, select the correct definition from Column B on the right. Write the corresponding letter of the definition next to the term. Column A F 1. Indirect costs A 2. Direct costs D 3. Fixed costs I E H B C G 4. Variable costs 5. Step-fixed costs 6. Responsibility centers 7. Revenue centers 8. Cost centers 9. Shadow cost centers Column B – Definitions A. Costs incurred directly as a result of providing a specific service or good B. Centers charged with controlling costs and generate revenue C. Have no revenue budget and no obligation to earn revenue D. Costs that do not vary as service volume varies E. Fixed over some range of service volume, but rise to a new level for a higher range of service volume F. Costs that cannot be tied directly to the patient’s stay in the bed G. Exist as budgets on paper only H. The places where costs occur and have budgets I. Costs that change as volume changes Part II: For each real-world example, select the correct term from the list on the left. Write the corresponding letter of the real-world example next to the term. Column A K 1. Indirect costs N 2. Direct costs Q 3. Fixed costs M R ...
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...Russian Budget System: A Move to More Devolved Budget Management? Jack Diamond © 2005 International Monetary Fund WP/05/104 IMF Working Paper Fiscal Affairs Department Reforming the Russian Budget System: A Move to More Devolved Budget Management? Prepared by Jack Diamond1 May 2005 Abstract This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. The Russian federal government has recently initiated a fundamental reform of its budget system, encompassing important policy, procedural, and institutional changes. This paper reviews this reform agenda with reference to the experience of industrial countries that over the past two to three decades have followed a similar reform path toward a more devolved budget management system. From this perspective, the importance of the strength of existing public expenditure management systems to accommodate increased devolution and the scope for employing decentralized agencies is explored. An assessment of the present Russian reform plans in light of this review reveals a number of concerns. First, the speed of the reforms contemplated appears overly ambitious when judged by the experience of other countries. Second, the preparedness of budget institutions...
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...Associate Level Material Cost Classifications Consult Ch. 6 & 7 of Health Care Finance and other sources to complete the form. This worksheet requires you to match the definitions and examples of types of cost, and the types of centers where costs occur. Part 1: For each term in Column A, select the correct definition from Column B on the right. Write the corresponding letter of the definition next to the term. Column A F 1. Indirect costs A 2. Direct costs D 3. Fixed costs I E H B C G 4. Variable costs 5. Step-fixed costs 6. Responsibility centers 7. Revenue centers 8. Cost centers 9. Shadow cost centers Column B – Definitions A. Costs incurred directly as a result of providing a specific service or good B. Centers charged with controlling costs and generate revenue C. Have no revenue budget and no obligation to earn revenue D. Costs that do not vary as service volume varies E. Fixed over some range of service volume, but rise to a new level for a higher range of service volume F. Costs that cannot be tied directly to the patient’s stay in the bed G. Exist as budgets on paper only H. The places where costs occur and have budgets I. Costs that change as volume changes Part II: For each real-world example, select the correct term from the list on the left. Write the corresponding letter of the real-world example next to the term. Column A K 1. Indirect costs M 2. Direct...
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...Associate Level Material Cost Classifications Consult Ch. 6 & 7 of Health Care Finance and other sources to complete the form. This worksheet requires you to match the definitions and examples of types of cost, and the types of centers where costs occur. Part 1: For each term in Column A, select the correct definition from Column B on the right. Write the corresponding letter of the definition next to the term. a f 1. Indirect costs a 2. Direct costs d 3. Fixed costs i e h b c g 4. Variable costs 5. Step-fixed costs 6. Responsibility centers 7. Revenue centers 8. Cost centers 9. Shadow cost centers Column B – Definitions A. Costs incurred directly as a result of providing a specific service or good B. Centers charged with controlling costs and generate revenue C. Have no revenue budget and no obligation to earn revenue D. Costs that do not vary as service volume varies E. Fixed over some range of service volume, but rise to a new level for a higher range of service volume F. Costs that cannot be tied directly to the patient’s stay in the bed G. Exist as budgets on paper only H. The places where costs occur and have budgets I. Costs that change as volume changes Part II: For each real-world example, select the correct term from the list on the left. Write the corresponding letter of the real-world example next to the term. Column A m 1. Indirect costs q 2. Direct costs p 3...
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...about what can happen to a business if costs and budgets are unmonitored. A budget is a plan for a distinct period of time. It may include things like planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. It expresses premeditated plans of business units, organizations, activities or events in measurable terms. Budget helps to assist the planning of actual procedures by making managers to reflect on how the conditions might change and what steps should be taken now and by inspiring managers to reflect on problems before they come up. It also helps co-ordinate the actions of the organization by convincing managers to inspect relations between their own operation and those of other departments. Other essentials of budget include: * To regulate their resources * To communicate plans to numerous responsibility centre managers. * To persuade managers in order for them to achieve budget goals. * To assess the performance of managers * To deliver visibility into the company's performance In summary, the purpose of budgeting is stools: 1. Tools offer a prediction of revenues and expenditures, that is, concept a model of how a business might accomplish monetarily if certain strategies, events and plans are carried out. 2. Tools enable the actual monetary process of the business to be measured against the forecast. Importance of costs and budgets controlling: It is very important for an organisation...
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...BUDGET FORMATS By presenting selected information in particular ways, budget documents focus attention on certain questions, relationships, and developments. Because budget formats “establish the rules by which the budgeting game is played (the decision rules)” and also “create the standards by which success is measured (rules of evidence),” formats are important to public budgeting. “When we speak of budgeting formats, we are talking about the way in which budgeting information is structured, the kind of information that is required to justify budget requests, and what kind of questions are asked during the budget review process” (Morgan, 2002, p. 71). There are four general types of approaches: line-item, performance, program, and zero-based, plus hybrids. Table 1 compares them and the following discussion describes them in detail. 2 3 Source: 4 Reprinted by permission. Morgan, Douglas, with the assistance of Kent Robinson and support of Drew Barden and Dennis Strachota, 2002. Handbook on Public Budgeting. Portland State University, Hatfield School of Government, State of Oregon edition, Table 7-6, pp. 162–163, http://eli.pdx.edu/erc/morgan/handbook6.doc. Alternative Methods of Budgeting Line-Item Budgeting A line-item budget lists, in vertical columns, each of the city’s revenue sources and each of the types—or classes—of items the city will purchase during the fiscal year. Following is an example of how line-item budgeting would be used in a small town public...
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...INTRODUCTION: The budget preparation phase starts with the Development Budget Coordination Committee (DBCC). It is headed by the DBM Secretary and its members are the Secretary of Finance, the NEDA Director-General, and the Bangko Sentral Governor, with the Office of the President for general oversight. The NEDA provides the over-all macro-economic assumptions with which budgetary levels are to be determined. They involve the projected Gross National Product (GNP) real growth rates, inflation rates, 91-day treasury bill rates, the London Interbank Offered Rates (LIBOR) rates, foreign exchange rates, population growth, and other economic parameters. The Department of Finance (DOF), the Bureau of the Treasury, the Bureau of Internal Revenue and the Bureau of Customs help the DBCC in determining the sources of financing. They project the revenues that will be generated for the budget year as well as the borrowings that may have to be tapped. The DBCC determines the overall economic targets, expenditure levels, the revenue projection, deficit levels and the financing plan. It submits them to the President and the Cabinet for approval. Once these are approved, the DBM issues the Budget Call. This requires agencies to prepare their budgets in accordance with the said guidelines, macro-economic assumptions, and ceilings. The DBM spells out guidelines, procedures, and timetables. Agencies undertake their own internal consultations. They rank programs, projects and activities using...
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...Zero-based budgeting 16 Top-down budgeting 16 Bottom-up budgeting 16 Activity-Based Budgeting 16 Section 4 18 Assessment criteria 4.1 18 Assessment criteria 4.2 21 Conclusion 22 Bibliography 23 Introduction Financial management is the efficient as well as effective management of the funds in a motive of accomplishing the goals and the objectives an organization. It comprises of how to rise capital and how to allocate for instance through budgeting. This does not only cater for the long term budget but also the allocation of funds in the short term. In our discussion we are going to focus on various issues such the various methods used in costing, the budgeting formation and formation process, and the different types of budgeting. The attainment of coordination will also be factored since it is key to the success of a business. Task 1 Assessment criteria 1.1 a. Identify and explain the various ways by which cost can be classified discussion the value of costs classification including any weaknesses in your argument In the world of business there are a range of costing methods are actually used by the enterprises in evaluation and the analyzing the cost of production when contrasted with the value of other substitutes. In executing the cost, two principle methods are used. Cost analyses deals with procedure of costing and the job costing order, deals with relationship of expenses incurred in...
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...Introduction and Background of Budget The Capital Budget of the public sector or sometimes also known as Public Budget concerns how the government plans its revenues and expenditures at the Federal level, State level, and Local government level, to carter for the needs of its development programs and projects. In a democratic society, the division of resources between the public and private sectors is roughly determined by the desires of the electorate. But because it’s such a complex and time-consuming task to acquire adequate political information, the electorate is chronically ignorant. Since the Revolutionary War, democratic system of governance has forever been looking for better ways to inform the public and to design more sophisticated techniques for deciding how best to allocate scarce public resources. Despite the good sense it makes to “budget to a plan”, public expenditures are frequently approved based on who supports what, rather than on a clear understanding of what exactly the expenditures will accomplish. Public Budgeting is not about numbers; it is about making Democratic governance work. During the debates leading to the creation of the American Constitution, taxation and public expenditures were one of the driving forces leading to the creation of our peculiar and complex system of separation of powers and checks and balances. Our various state and local democratic constitutions give the executive branch the power to propose a budget and collect taxes, but...
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...Managerial Accounting Notes Comparison of Financial and Managerial Accounting Managerial accounting is concerned with providing information to managers—that is, the people inside an organization who direct and control its operations. In contrast, financial accounting is concerned with providing information to stockholders, creditors, and others who are outside the organization. Accounting Recording, Estimating, Organizing, Summarizing (Financial and Operational Data) Financial Accounting -Reports to those outside the organization: Owners, Creditors, Tax authorities Regulators -Emphasizes financial consequences of past activities -Emphasizes objectivity and verifiability -Emphasizes precision -Emphasizes summary data concerning the entire organization -Must follow GAAP -Mandatory for external reports Managerial Accounting - Reports to those inside the organization for Planning, Directing and motivating, Controlling, Performance evaluation -Emphasizes decisions affecting the future -Emphasizes relevance -Emphasizes timeliness -Emphasizes detailed segment reports about departments, products, and customers -Need not follow GAAP -Not mandatory Roles of MA -Advise management of financial implications of a project -Explain financial consequences of business decisions -Formulate business strategies -Monitor spending and financial controls -Conduct internal business audit -Explain the impact of business competitive landscape FA vs. MA: Similarities ...
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...ACCT 505 Entire Course For more classes visits www.snaptutorial.com ACCT 505 Week 1-7 All Discussion Questions ACCT 505 Week 1 Case Study ACCT 505 Week 2 Quiz Job Order and Process Costing Systems ACCT 505 Week 3 Case Study II ACCT 505 Week 4 Midterm Exam ACCT 505 Week 5 Measuring Performance - Course Project A ACCT 505 Week 6 Quiz Segment Reporting and Relevant Costs for Decisions ACCT 505 Week 7 Capital Budgeting Course Project ----------------------------------------------------------- ACCT 505 Final Exam For more classes visits www.snaptutorial.com ACCT 505 Final Exam ------------------------------ ACCT 505 Week 1 Case Study For more classes visits www.snaptutorial.com Top Switch Inc. designs and manufactures switches used in telecommunications. Serious flooding throughout the state of Tennessee affected Top Switch’s facilities. Inventory was completely ruined, and the company’s computer system, including all accounting records, was destroyed. Before the unfortunate incident, recovery specialists cleaned the buildings. The company controller is very nervous and anxious to recover whatever records he can to support the insurance claim for the destroyed inventory. After consulting with the cost accountant, they decide to retrieve the previous year’s annual report for the beginning inventory numbers. In addition, they also agreed that they need first quarter cost data. The cost accountant was working on the first quarter results...
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...Chapter 10 Strategy and the Master Budget Cases 10-1 Emerson Electric Company © Joseph San Miguel, reprinted with permission. 10-2 LetsGo Travel Trailers (Source: “LetsGo Travel Trailers: A Case for Incorporating the New Model of the Organization into the Teaching of Budgeting,” by Sally Wright, Cases from Management Accounting Practice, Vol. 14, Montvale, NJ: Institute of Management Accountants, 1998). Note that part 2 of this case requires the use of Excel. 10-3 Building Processes for a Solid Foundation: The Case of Community Health Initiatives (Source: Sandra Richtermeyer, Strategic Finance, August 2007, pp. 52-57. Note: this case was the case used as the 2008 IMA Student Case Competition. The Student Case Competition is sponsored annually by the IMA to provide an opportunity for students to interpret, analyze, evaluate, synthesize, and communicate a solution to a management accounting problem.) 10-4 Academic Advising at Bay State (Source: Janice E. Bell and Shahid L. Ansari, Strategic Finance, September 2008, pp. 44-51. Note: this case was the case used as the 2009 IMA Student Case Competition. The Student Case Competition is sponsored annually by the IMA to provide an opportunity for students to interpret, analyze, evaluate, synthesize, and communicate a solution to a management accounting problem.) Readings 10-1: “How to Set Up a Budgeting and Planning System” by Robert N. West and Amy M. Snyder, Management Accounting (January 1997)...
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...Chapter 8 1 2 3 Strategy and the Master Budget 1 Teaching Notes for Cases 8-1: Emerson Electric Company Background • Emerson is an $8 billion company. • Its successful strategy is efficient, quality, and low cost production. R&D does not get a great deal of attention from top management. Planning Process • Top management sets sales growth and return on total capital targets for the divisions. • Each fiscal year, from November to July, the CEO and several corporate officers meet with the management of each division at a one or two day division planning conference: ▪ Prior to its division planning conference, the division president submits four standard exhibits to top management: 1. Value measurement chart 2. Sales gap chart 3. Sales gap line chart 4. 5-back-by-5-forward P&L • The division president and appropriate division staff then meet with top management to present a detailed forecast for the coming year based on the result from the division planning conference and conduct a financial review of the current year’s actual performance versus forecast: ▪ Contingency plans for several lower levels of activity also developed to protect profitability at lower sales levels. ▪ However, changes to the division’s forecast are not likely unless significant changes occurred in the environment or in the underlying assumptions. Changes in the forecast must...
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