April 29, 2011
In this paper I will analyze Operating Budgets and the impact it plays in a Company’s day to day operations’. I will also briefly discuss the elements that go into a budget are constructed as well as the variances in budgets. Accounting principles and practices are a very important as it relates to everyday life. The term "generally accepted accounting principles (GAAP) is the Americanized term used to refer to the standard framework of guidelines for financial accounting used in any given jurisdiction which are generally known as Accounting Standards (http://en.wikipedia.org/wiki/). Information Systems (Accounting information systems) combine the study and practice of accounting with the design, implementation, and monitoring of information systems. (http://accounting information-systems/function. Open). Such systems use modern information technology resources together with traditional accounting controls and methods to provide users the financial information necessary to manage and budget their organizations (http://www.solutionmatrix.com/operating-budget.html). Generally, a budget covering operating expenses, for normal operations. Operating expenses can be budgeted (planned for) and accounted for on a monthly, quarterly, and/or annual basis. Operating budgets are usually fixed through a process different from that used on capital budgets (in some companies, all management above a certain level participate in the process ( www.solutionmatrix.com/operating-budget.html ).Operating budgets, once fixed, are usually not changed during the period—except maybe for emergency reductions following unexpectedly poor sales results or other disasters. Operating budgets generally cover predictable, repeatable costs; items bought under an "expense budget" (as opposed to a capital budget) are not registered as capital assets and are not depreciated. (http://www.solutionmatrix.com/operating-budget.html). Elements of a Budget are Direct costs can be easily identified with a particular project, (e.g., salaries for the faculty and staff who conduct the research or the cost of equipment and supplies used in the research), and must be considered reasonable, allocable and allowable to be incorporated into a proposal budget (http://www.research.ucla.edu/ocga/sr2/Basicelm.htm). The fiscal budget proposal is the result of many months of planning and incorporates a multi-year view of cost and revenue projections. Preparation is crucial. Without proper planning and action from year to year an organization can face a situation that would dramatically undermine and conclude in a year-end deflect with no financial profit. An element of a budget critical framework for judging performance is a huge element part of a budget. Budget can overcome two limitations of using past performance as a basis for actual result advantage is motivating managers and employees. A lot of research shows that budgets could challenge to improve the working performance. If the company cannot achieve the budget number, it is viewed as a fail operation. Most managers and employees will work hard to avoid the failure and try the best to achieve the goal (http://ACCOUNTING-INFORMATION-SYSTEMS/function.fopen). Because Accounting is a body of principles and conventions as well as one of the most important entity of any business that details the financial standing and background of an organization the operating budget and keys elements of a Company are critical. That means the budget could push the managers and employees to achieve the goal more active. A budget with good elements includes good day-to-day operations planning, forecasting, and strategic planning short and long term. Upgrading to advance accounting software is important as it relates to the success of a business having proficiency accounting performance that entails and lays out a good detail Budget annually. These performances consist of trial balance, which entails the...
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