NO. 141-160 141. The cash budget assists businesses in forecasting and controlling their cash position, allowing them to make informed spending, investment, and financing decisions.142. It enables them to assess project financial viability, assess the impact of changes in expenses or revenue, and make informed decisions about resource allocation and investment opportunities.143. A sales budget is a financial plan that outlines a company’s expected sales revenue over a specific time period.144. Businesses can assess the effectiveness of their sales strategies, identify areas for improvement, and take corrective action if necessary by comparing budgeted sales revenue to actual sales revenue.145. It assists businesses in determining the financial impact of various pricing strategies, product launches, market expansions, and changes in sales approaches.146. It provides a detailed breakdown of the various expenses required to run the business and aids in cost control, resource allocation, and financial performance monitoring.147. Businesses can assess their efficiency, identify areas for improvement, and take corrective action if necessary by comparing actual expenses to budgeted amounts.148. The master budget is a comprehensive financial plan that combines all of a company’s individual budgets and financial projections into a single, cohesive document.149. The master budget acts as a business roadmap, guiding decision-making, resource allocation, and performance evaluation.150. By combining all relevant financial information into a single document, the master budget facilitates effective financial planning.151. Businesses can identify areas of strength, weakness, and opportunity for improvement.152. It assists businesses in assessing the financial impact of various scenarios, determining the viability of investments or expansion plans, and making data-driven decisions to optimize financial performance.153. Incremental Budgeting involves using the previous year’s budget as a starting point and making adjustments for the upcoming budget period.154. Incremental budgeting: This is relatively simple and easy to implement, but it may not encourage innovation or cost efficiency since it relies heavily on historical data.155. Activity-Based Budgeting（ABB）: This approach involves identifying the activities that drive costs, determining the resources required for each activity, and allocating budgets accordingly.156. ABB encourages cost control and process improvement by linking expenses to specific activities, but it can be complex and may require specialized software or expertise.157. Each budgeting approach has its merits and drawbacks, and organizations should select the method that best aligns with their strategic goals, management style, and resource requirements.158. A well-designed and effectively implemented budgeting process can improve financial discipline, optimize resource utilization, and contribute to an organization’s overall success.159. It is an important part of strategic planning and decision making because it allows businesses to anticipate and prepare for potential opportunities and challenges.160. Businesses can forecast future periods, such as months, quarters, or years, by analyzing past performance, market research, and industry insights.
