III.+Module+9000+Explanation+and+Examples

=III. Module 9000 Explanation and Examples=

**I.** **__Relationship between the Master & Financial Budgets:__**
==== A master budget is a complete financial blueprint financial for the year which management may use for direction in company activities. The master budget is made up in two parts, the financial and operating budgets. Financial budgets focus on the how the company is managing cash inflow and outflows as well as the overall financial well being of the company. Since the master budget is comprised in part of the financial budget, both are prepared for one year but are generally are broken down into shorter time frames such as quarterly or monthly. This helps managers up to date with the company’s financial health and how the firm might be meeting its projected goals. Another advantage of analyzing a shorter duration budget allows management to make needed changes throughout the year to ensure they meet their expected goals. ====

**II.** **__Financial Budgets:__**

 * 1) **Capital Expenditures Budget –** an outline of the company’s expected investments in long term project and acquisitions. These expenditures could include land, equipment, funds to acquire a company, or even starting capital to enter a new industry segment.
 * 2) **Cash Budget –** The cash budget is a detailed outline of all anticipated cash inflow and outflows for a specified time frame. The purpose for the cash budget is to identify whether the company has an adequate amount of cash to meets its obligations for the year and also to make sure the company is using the cash to make project investments or capital improvements rather than sitting on the funds.
 * 3) **Budgeted Balance Sheet –** It represents an outline of the company’s financial activities throughout the year and a projection of the expected financial position of the company at the end of the year. The budgeted balance sheet includes information from the beginning year balance sheet in order to provide a dependable budget for the end of the current year.
 * 4) **Budgeted Statement of Cash Flows –** The Budgeted Statement of Cash Flows looks at changes in the cash inflows and outflows in operating, investing, and financing activities. Managers usually look at this statement quarterly or over the year. It helps managers see how the cash is being allocated throughout the company and where changes may need to be made in order to maximize efficiency.

** References: **
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 * 1) ====Investopedia ULC (2011) Retrieved July 3, 2011 from [|www.investopedia.com] ====
 * 2) AccountingTools (2011). Retrieved July 3, 2011 from [|www.accountingtools.com]
 * 3) Accounting For Management (2011). Retrieved July 3, 2011 from [|www.accountingformanagement.com]
 * 4) Hansen, D.R., & Mowen, M. M. (2011). //Cornerstones of Cost Accouting. // Mason, OH: South-Western, Cengage Learning.