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Accounting for Managers: Interpreting Accounting Information for Decision-Making, Canadian Edition by Eckhard Schumann, Sandy M. Kizan, Paul M. Collier

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CHAPTER 14

Budgeting

LEARNING OBJECTIVES

After reading this chapter, you should be able to answer the following questions:

images What are the benefits of budgeting?

images What types of budgets are used within organizations?

images What are the main steps in the budgeting process?

images How does the budgeting process for a manufacturing organization differ from the budgeting process for a service organization or a retail organization?

images Why is it important to develop a cash budget?

images What are the challenges faced when budgeting, and how can these challenges be overcome?

Anthony and Govindarajan (2000) described budgets as “an important tool for effective short-term planning and control” (p. 360). They saw strategic planning (see Chapter 6) as being focused on several years, contrasted to budgeting which focuses on a single year. Strategic planning “precedes budgeting and provides the framework within which the annual ...

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