From thiswe note that capital budgeting refers to the assessment of investment decision or disinvestment decision so as to see if it is realistic or not. It is planning for main capital, investment or expenditures.
Get Full Essay Get access to this section to get all help you need with your essay and educational issues. An employee thinks of how he should budget his monthly salary so that he would have enough funds until the next pay day.
A student thinks of how he should budget his allowance. In the news, debates in Congress and the Senate about the national budget for a certain fiscal year are often heard. This paper deals with budgets as well as the procedures and other concepts involved in the budgeting process, though the discussions focus on business budgeting rather than on the non-business activities mentioned in the preceding paragraph.
Consequently, this paper shall discuss the nature and characteristics of budgets, the importance and functions of budgeting, the basic procedures used in preparing budgets, and how budgets are used for planning, control, and performance evaluation.
For starters, a budget is a plan, expressed in quantitative terms, on how to acquire and use the resources of an entity during a certain future period. It refers to a certain entity or to a specific activity of an entity.
Budget is for a specific future period and is said to be quantitative. Introduction Not many people are aware that budgeting is applied almost everyday in their lives. An ordinary employee apportions his monthly salary to have enough money until the next payday.
A typical homemaker allots the family income to sustain the needs of her family. Students also plan their expenses according to their allowances. Evidently, people have always been inclined to budgeting; however, its importance is quite taken for granted.
Even in businesses, whatever the size may be, budgeting functions as an essential factor in the achievement of success. Many businesses rely on budgeting to obliterate time pressure as they prepare for future and foreseen problems before they happen.
Accordingly, budgeting is a tool of profit planning, which involves determining of goals and objectives to increase profit, as well as enrich performance.
Budgeting determines where the financial resources of an organization will be appropriated and how these financial resources will increase in cases where an organization does not have any cash flow to recompense. On the other hand, a budget is the plan comprised in budgeting that ensures financial stability, control, as well as financial decisions.
A budget is often interchanged with a forecast. However, the two terms are quite different. A forecast is a prediction of a future trend or event in a business while a budget is a proposed result of the future that the business aims to accomplish.
Three Main Elements of Budgeting Budgeting involves three main elements.
Normally, accurate estimate of forecasted sales is difficult to regulate. It is necessary to make the actual past sales figures as basis for estimate.The bottom-up/self-imposed budget. 1. A self-imposed budget or participative budget is a budget that is prepared with the full cooperation and engagement of directors at all degrees.
It is a peculiarly utile attack if the budget will be used to measure managerial public presentation. 2. The advantages of self-imposed budgets include: a.
Excerpt from Essay: Budgetary Control Budgets and Budgetary Control: Benefits and Limitations Budgeting is a basic feature of business that is used by any business or company in order to set up a company's future endeavors by engaging in financial benjaminpohle.com budgets are prepared for main areas of any business including: purchases, sales, production, labor, debtors, creditors, and cash.
Budgeting Essay; Budgeting Essay. Words 15 Pages. Budgeting It motivates the executives to define the basic objectives of the company, it gives a structure to the company by defining the responsibilities of each of the parts that forms the organization, it motivates and rises the participation of all workers of the company, it.
The tools you need to write a quality essay or term paper; Saved Essays. You Have Not Saved Any Essays. The basic framework of the budget process was enumerated from the Congressional Budget and Impoundment Control Act of which est Word Count: ; Are these alternatives better or is budgeting still possible?
Budgets, for /5(5). Chapter 4. THE BUDGET PREPARATION PROCESS A. OBJECTIVES OF BUDGET PREPARATION framework. • Formulating expenditure policies. • Allocating resources in conformity with both policies and fiscal targets.
This basic policy remains the same;. 1. A self-imposed budget or participative budget is a budget that is prepared with the full cooperation and participation of managers at all levels. It is a particularly useful approach if the budget will be used to evaluate managerial performance.
2. The advantages of self-imposed budgets include: a.