What do we mean by budgetary control?
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What do we mean by budgetary control?Ans:Budgetary control is financial jargon for managing income and expenditure. In practice it means regularly comparing actual income or expenditure to planned income or expenditure to identify whether or not corrective action is required.
For example most University departments are given annual chest budgets for general equipment. By regularly comparing actual expenditure on this budget to planned expenditure a department will be aware of whether a particular item can be afforded. If the account is in deficit a department will need to identify an alternative source of funds (e.g. departmental reserves or charging to a research grant or contract). This process of monitoring expenditure and taking appropriate action is known as budgetary control.
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- If management is being evaluated on their ability to manage a budget, what can they do to increase cash flow?Which of the following is NOT true of the budgeting process? Question 8 options: Budgeting provides feedback to management to aid in assessing how well it's reaching its goals. Budgets force managers to plan for the future. Budgets force managers to consider relations among operations across the entire value chain. The performance report is prepared as part of the master budget.Which of the following is true in a bottom-up budgeting approach? a.Supervisors tell departments their budget amount and the departments are free to work within those amounts. b.Departments determine their needs and relate them to the overall goals. c.Every expense needs to be justified. d.Departments budget their needs however they see fit.
- indicate yes if it describes a potential benefit of budgeting orno if it describes a potential negative outcome of budgeting. Budgets help coordinate activities across departments.Required: Identify the problems that appear to exist in the company’s budgetary control system and explain how the problems are likely to reduce the effectiveness of the system. Explain how the company’s budgetary control system could be revised to improve its effectiveness.Need him with the decriotionaIncluding the budget's objective, how the budget assists an organization in managing its financial activities, and what types of data need to be included in that specific budget
- Which of the following is not considered a benefit of the budgeting process? a. Gives managers guidance when evaluating the performance of business operations. b. Determines the exact amount of revenues and expenses for the upcoming fiscal period. c. Helps managers achieve short-term and medium-term goals. d. Helps managers set long-term strategic plans.Which of the following is an example of a situation in which a company could use budget information to make operational changes: Select one: a. Total revenues exceed projected costs. b. Profits are expected to rise. c. Accounts receivables are in order. d. Estimated sales exceed actual sales.1. Which of the following is an advantage of the budgeting process? a. It forces management to focus on the past and not be distracted by the day-to-day operations of the business. b. It can communicate to employees specific information about their past performance to determine their promotion prospects. c. It can communicate to employees specific information about their past performance to determine their promotion prospects. d. It can communicate to employees information about their performance expectations in the period ahead. 2. Which one of the following statements regarding changing inventory costing methods is true? a. A change in inventory methods can be justified if the change is made to better match profits with revenue b. Changing inventory costing methods violates comparability c. One place that the reader of an annual report would be able to identify that a company changed inventory costing methods is the statement of shareholders' equity d. Changing inventory costing…
- if an organisation is experiencing budget difficulty, what steps are suggested to improve compliance with the budget and increase motivation for managers to achieve budget targets?Under what conditions would you recommend using each of these funding methods to pay for information systems expenses: allocation, chargeback, and corporate budget? What impact does the IT budget have on the company, both short-term and long-term?A) Enter True or False 1. ________ An important part of the planning process is the creation of a budget. 2. ________ Operating budgets focus on the financial resources needed to support operations including cash receipts and disbursements, capital expenditures and financing. 3. ________ Budgets can also create a “use-it-or-lose-it” mentality that encourages managers to spend their entire budgets to avoid a reduction in resources in the next budget period. 4. ________ The starting point of the planning process is management’s strategic plan or vision of what they want the organization to achieve over the long term. 5. ________ A short-term objective is a specific goal that managers want to achieve in more than a year to reach their long-term goals. 6. ________ Planning is the forward-looking phase of the planning and control process that involves setting long-term objectives and defining short-term…