About This Chapter
Budgeting Methodologies in Accounting - Chapter Summary
Develop your understanding of budgeting methodologies in accounting by utilizing this helpful chapter. All the major budgeting techniques, terms, and concepts are covered individually in each lesson, expanding your knowledge base one topic at a time. Review the different budgeting strategies, practice the formulas, and get a better grasp on the benefits and drawbacks of each methodology discussed. When you complete the lessons in the chapter, you will be able to:
- Review the accounting components of the master budget
- Show techniques used for project budgeting
- Determine the benefits of top-down budgeting
- Differentiate the pros and cons of zero-based budgeting
- Establish the advantages of flexible budgeting
- Outline the process for bottom up budgeting
- Evaluate examples of continuous (rolling) budgets
Many of you are probably using this chapter to refresh your memory on topics you have already learned at some point during college or during your career. If you are a little rusty on these topics, our lessons provide a great starting point for getting you up to speed. The instructors use a fully-developed approach to teach these accounting topics to learners of all skill levels. If you have no knowledge of this topic, then going through the lessons in order would be the best plan of action. If this is just a recap for you, each of our lessons can stand on their own, so watching the lessons out of order will still make perfect sense as you study these accounting concepts.
1. Master Budget in Accounting: Definition, Components & Example
In this lesson, we'll outline the major components of a master budget and look at an example that shows how a company's individual budgets relate to each other and can be used to form a strategic plan for a company.
2. Project Budgeting: Definition & Techniques
Have you ever wondered how a project manager develops a budget? There are a few types of estimating techniques that a project manager can use to develop a budget, and we'll discuss four of them in this lesson.
3. Top-Down Budgeting: Definition, Process & Advantages
In top-down budgeting, a company's high-level targets and goals are defined by senior management, and then managers are given an allocation from those targets. In this lesson, we'll discuss why companies use this method and how the process works.
4. Zero-Based Budgeting: Definition, Advantages, Disadvantages & Examples
Many companies use some form of zero-based budgeting, which is a budgeting process where no amounts carry over from prior years and no programs are considered pre-approved. In this lesson, we'll learn why companies do this and how the process works.
5. Flexible Budgeting: Advantages & Explanation
What is flexible budgeting? Well, it certainly has nothing to do with being able to touch your toes! It's a way of budgeting that gives better feedback on company performance when sales or production volume is different than what was originally anticipated.
6. Bottom Up Budgeting: Definition, Process & Advantages
Bottom-up budgeting starts with the pieces to arrive at a whole number. In this lesson, you'll learn more about this method of budgeting, including how it works and its advantages and disadvantages.
7. Continuous (Rolling) Budgets: Definition & Examples
In the world of accounting, not all budgets are static or locked. This lesson will discuss continuous rolling budgets and we will provide examples of their use.
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