What is Margin of Safety?
The margin of safety is the number of units which are expected to be sold above break-even. The … Read More
12 Beyond Budgeting Principles Explained
Beyond budgeting is a philosophy which seeks the abandonment of budgets. Using relative target measure this approach seeks … Read More
What is Activity-Based Budgeting (ABB)?
Activity-based budgeting is budgeting based on activities rather than units, products, or departments. An extension of ABB. Activity-based … Read More
What is Kaizen budgeting?
Kaizen budgeting is budgeting based on a continuous improvement philosophy. Seeking small improvements in the operating processes which … Read More
What is Zero-Based Budgeting (ZBB)?
Zero-based budgeting is an approach to budgeting that starts with a blank piece of paper every accounting period. … Read More
What is Rolling Budget?
Rolling Budget is an approach to budgeting that uses a continuous updating approach to forecasting, the time period … Read More
Present Value
Present value (PV) is the current worth of future cash given an established rate of return and a … Read More
Future Value
An expected value in the future is ‘discounted’ to reflect today’s value, assuming a positive return on investment … Read More
Time Value of Money (TVM)
Definition The concept of time value of money (TVM) is basically defined as follows: the benefit of having a … Read More
Standard Costing and Variance Analysis
Standard costs are expected costs under normal conditions, and refer to one unit of activity (for example, one unit … Read More
Roles of Budgeting
In this article, we’ll explain all the roles that budgets can play within an organization to understand the … Read More
Functional Budget and Its Types
Functional budgets are day-to-day operational budgets which focus on specific functions or aspects of the process or service. … Read More
Revenue Recognition and Matching Principle Explained
To ensure that financial statements are up to date, GAAP requires the use of accrual accounting. To practice … Read More
What Is Financial Management?
What was once called finance is now referred to as financial management, reflecting the current emphasis on the … Read More
Trial Balance
Trial balance A list of all the accounts of a business and their balances; its purpose is to … Read More