BUDGETARY CONTROL Copy
BUDGETARY CONTROL
DEFINITION
BUDGET:
A budget is a monetary and/or quantitative expression of business plans and policies, prepared in advance, to be pursued in the future period of time. According to Certified Institute of Management Accountants, Budget is defined as “A budget is a financial and/or quantitative statement prepared prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining the objective”.
Budget is a systematic plan for utilisation of all types of resources, at its command. It acts as a barometer of a business as it measures the success from time to time, against the standard set for achievement. Budgeting is a technique of formulating budgets.
Characteristics of a Budget: The main characteristics of a budget are:
(A) A Comprehensive Business Plan showing what the enterprise wants to achieve.
(B) Prepared in Advance.
(C) For a Definite Period of Time.
(D) Expressed in quantitative form, physical or monetary terms, or both.
NEED OF BUDGET:
A budget is prepared to have effective utilisation of resources and for the realisation of objectives,as efficiently as possible.
BUDGETARY CONTROL:
MEANING:
Budgetary control is the process of determining various budgeted figures for the enterprise and then comparing the actual performance with the budgeted figures for calculating the variances, if any. In this process, first budgets are to be prepared. Second, actual results are to be recorded. Third, comparison is to be made between the actual with the planned action for calculating the variances. Once the discrepancies are known, remedial measures are to be taken, at proper time. Then only, planned results can be achieved. A budget is a means and budgetary control is the end result.
Budgetary Control is defined as "the establishment of budgets, relating the responsibilities of executives to the requirements of a policy, and the continuous comparison of actual with budgeted results either
DEFINITION
BUDGET:
A budget is a monetary and/or quantitative expression of business plans and policies, prepared in advance, to be pursued in the future period of time. According to Certified Institute of Management Accountants, Budget is defined as “A budget is a financial and/or quantitative statement prepared prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining the objective”.
Budget is a systematic plan for utilisation of all types of resources, at its command. It acts as a barometer of a business as it measures the success from time to time, against the standard set for achievement. Budgeting is a technique of formulating budgets.
Characteristics of a Budget: The main characteristics of a budget are:
(A) A Comprehensive Business Plan showing what the enterprise wants to achieve.
(B) Prepared in Advance.
(C) For a Definite Period of Time.
(D) Expressed in quantitative form, physical or monetary terms, or both.
NEED OF BUDGET:
A budget is prepared to have effective utilisation of resources and for the realisation of objectives,as efficiently as possible.
BUDGETARY CONTROL:
MEANING:
Budgetary control is the process of determining various budgeted figures for the enterprise and then comparing the actual performance with the budgeted figures for calculating the variances, if any. In this process, first budgets are to be prepared. Second, actual results are to be recorded. Third, comparison is to be made between the actual with the planned action for calculating the variances. Once the discrepancies are known, remedial measures are to be taken, at proper time. Then only, planned results can be achieved. A budget is a means and budgetary control is the end result.
Budgetary Control is defined as "the establishment of budgets, relating the responsibilities of executives to the requirements of a policy, and the continuous comparison of actual with budgeted results either