L4 AMAC Budget Flashcards

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Key Budget Factor

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The main factor that determines the planned activity level of the organisation

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Fixed budget

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A budget based on one assumed level of output

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Flexed budget

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A budget that is adjusted to correspond with the actual level of output

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Incremental budgeting

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Preparing a budget by basing it on the budget for the previous period with adjustments for inflation and known changes

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Zero based budgeting

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Preparing a budget without reference to the previous period, but by analysing the costs and benefits of a series of decision packages

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Priority based budgeting

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Ranking outcomes into levels of priority as a means of budgeting only for those with the highest priorities

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Activity based budgeting

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Using the techniques of activity based costing to prepare budgets based on activities and their cost drivers

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Strategic budget

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A long-term budget produced in outline only

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Operational budget

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A short-term budget produced in detail

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Responsibility accounting

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Management accounting based on departments, activities or functions, each of which is the area of responsibility of an individual