This document discusses key concepts related to budgeting including: 1. Budgets translate organizational goals and strategies into operational terms and are used for planning and control by setting standards and comparing actual performance. 2. Master budgets combine all individual area and activity budgets, while operating budgets concern income generation and financial budgets concern cash flows and capital expenditures. 3. Flexible budgets are superior to static budgets for performance reporting because they allow comparison of actual costs to budgeted costs at the actual level of activity.