Chapter-9 1. Budget: A budget is a detailed quantitative plan for acquiring and using financial and other resources over a specified forthcoming time period. Budget is a plan of action for achieving quantified objectives, standard for measuring performance and device for coping with foreseeable adverse situations.

2. Budgeting: The act of preparing a budget is called budgeting. Budgeting is the process of creating plan to spend money. It is simply balancing expenses with income.

3. Zero Budget: A method of budgeting in which all expenses must be justified for each new period. It requires managers to justify all budgeted expenditures, not just changes in the budget from the prior year.

4. Muster Budget: A set of interconnected budgets of sales, production costs, purchases, incomes etc. is called Master Budget. It also includes pro-forma financial statements. It serves as a planning and control tool of the organization.

5. Cash Budget: Estimation of cash inflows and out flows for a business or individual for a specific period of time is called Cash Budget.

6. Advantage of sell impose Budget: i. Individuals at all levels of the organization are viewed as members of the team whose judgments are valued by top management. ii. Budget estimates prepared by front-line managers are often more accurate than estimates prepared by top managers. iii. Motivation is generally higher when individuals participate in setting their own goals than when the goals are imposed from above. iv. A manager who is not able to meet a budget imposed from above can claim that it was unrealistic. Self-imposed budgets eliminate this excuse.

Chapter-13

1. Differential cost: The difference between the cost of two alternative decisions or of a change in output levels is called Differential cost. The concept can be particularly useful in step