Explain the difference between Summary Budget and Master Budget b

Sometimes we are confused with the term Summary Budget and Master Budget.

This article seeks to explain the difference:

The Summary Budget:-

In earlier articles we have the capital expenditure budget and the various operating budgets like sales, production, overheads and others. Basically, Summary Budget as it being coined is merely a summary of all the abovementioned budgets. The ultimate output of the Summary Budget will show:

1. Budgeted Income Statement
2. Budgeted Balance Sheet
3. Budgeted Cash Flow

Whereas:-

The Master Budget:-

Once the summary budget is prepared, it is a DRAFT Master Budget. This draft master budget is submitted to the budget committee for approval.

Next when the budget committee has thoroughly review the draft master budget, it is then submitted to the Board Of Directors once again for the ultimate approval. Upon the approval from the Board of Directors, the draft master budget then becomes the Master Budget. The budget is now an order from the board and the manager responsible must see to it that it is implemented as effectively as possible.