Accounting and Financial Management

RUNNING HEAD: ACCOUNTING AND FINANCE
0
Accounting and Financial
Management
August 18
2019

ACCOUNTING AND FINANCE 1
Table of Contents
Introduction................................................................................................................................2
Discussion on operating budgets................................................................................................2
Discussion on the benefits of Master Budget.............................................................................4
Discussion on the need of investment appraisal techniques for the financial decision making
in long run..................................................................................................................................4
Conclusion..................................................................................................................................6
References..................................................................................................................................7
Appendix....................................................................................................................................9

ACCOUNTING AND FINANCE 2
Introduction
The study is conducted to explain the concept of accounting and management in the
organizational context. It explains the meaning and importance of different types of budgets
operating in the company. It also discusses the process of developing budgets in an
enterprise. It provides the evaluation of the importance and benefits of Master budgets in an
entity. The discussion is being provided on the investment appraisal techniques such as; Pay-
back period (PBP), internal rate of return (IRR), Net present value (NPV) and others. The
discussion highlights the importance of investment appraisal practices in making the long
term financial decision of the entity.
Discussion on operating budgets
A budget is defined as the statement which consists of the future predicted values of the
incomes and expenses for a particular period. It is a significant tool used by the managers for
goal setting and decision making (Blinova, 2016). Operating budgets is a category of budgets
in which the operational income and expenses of the business are predicted for the period. In
the given case, the operating expenses and income of the product are provided using which
the different types of operating budgets can be prepared. The operating budgets determine the
profit generated by an enterprise and show the short term budgeted planning of entity which
defines the operational efficiency of the business. The operating budgets are prepared to
identify the profits of the company which is prepared with the help of the following processor
parts of the operating budget.
 Sales Budget: Sales budget determines the estimated amount of transactions for the
business. It determines the targeted sales to be achieved by the entity during the
period (Zimmerman, and House, 2016).