In the Budgeting Process a Company Can Use Either an Ideal

question 21

Essay

In the budgeting process a company can use either an ideal for normal standard.What is the difference between an ideal standard and a normal standard? What impact do you think each would have on employee morale?

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Definitions:

Monetary Items

Financial elements that are fixed or determinable in terms of money and do not change in value over time, such as cash and receivables.

Temporal Method

An accounting method used to convert the financial statements of a foreign subsidiary, using exchange rates based on the time assets and liabilities were acquired.

Functional Currency

The currency of the primary economic environment in which an entity operates, used in its financial reporting.

Consolidation

The process in accounting of combining the financial statements of two or more entities controlled by the same owner into a single set of statements.