All 34 The Budgeting Process questions
More in The Budgeting Process
What is the role of the budget committee? What is a budget manual? What is the principal budget factor (limiting factor)? What is budgetary slack and why does it matter? What are the criticisms and limitations of traditional budgeting? What is incremental budgeting? What assumptions must be agreed before budgeting starts? What is a responsibility center and what types exist? How do you set challenging but achievable budget targets? What is the budget timetable and why is it important?
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Budgeting & Forecasting › The Budgeting Process

What is the typical sequence of steps in preparing a budget?

Intermediate

Answer

A common sequence: identify the principal budget factor; prepare the budget for that factor (usually sales); prepare subsidiary budgets (production, materials, labor, overheads, etc.); prepare the cash budget; compile the master budget (budgeted income statement and balance sheet); review, negotiate, and approve; then monitor and control against actuals.
Real-world example Sales is budgeted first, then production and purchasing, then cash, culminating in the master budget for approval.

Common follow-ups: What comes first in the sequence? | What is the final output?

The Master Budget Cash Budgeting The Budgeting Process
All 34 The Budgeting Process questions