Overview: Our main objective in Packet 10 is to begin to think about more complex issues associated with budgeting. Now, that we're working with transactions in which cash flows don't necessarily occur in the same period as the event, budgeting is a bit more complicated. Additionally, as we turn back to budgeting make sure you're keeping track of your own transactions for September. Don't forget that you'll eventually be comparing the budget you completed last month against your actual results. Semester case Now that he's completed his first year of operations, W.T. would like to work on his budget for the next year of operations. However, he realizes his business is now more complex than it was since he completed his initial budget last summer. Not only is he handling cash receipts and payments a bit differently, but he now purchases supplies and also recently purchased his first long-term asset (equipment). As you read, think about what W.T. will need to do in order to properly budget for the upcoming year. Survey of Accounting Packet 10 - Pre-Class Notes Key questions: 1. Recall: what is the difference between capital budgeting and operations budgeting? 2. Why does the budgeting process usually begin with formulation of the sales budget? I Key terms. Using your own words, define the following: 1. Pro forma financial statements