Goals

Definition

Goals are specific, measurable objectives that management aims to achieve within a set timeframe. They guide decision-making and resource allocation in managerial accounting.

5 Must Know Facts For Your Next Test

1. Goals must align with the overall strategy of the organization.
2. Effective goals are typically SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
3. In managerial accounting, goals help evaluate the performance of different departments or managers.
4. Establishing clear goals assists in budgeting and forecasting processes.
5. Goals are often used as benchmarks for performance measurement and incentive plans.

Review Questions

• What characteristics should effective managerial goals possess?
• How do goals influence budgeting and forecasting in an organization?
• Why is it important for goals to align with the organization's overall strategy?

Related terms

Budgeting:

The process of creating a plan to spend an organization's resources within a specified period.

Performance Measurement:

The process of assessing progress toward achieving predetermined goals.

Strategic Planning: Long-term planning that involves setting priorities and allocating resources to achieve organizational objectives.