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Unformatted text preview: A company would need to create a budget because the budget gives the company a visual tool that helps managers in both their planning and control functions. Budgets also provide a mechanism for communication between units and across levels of the organization. Some advantages of budgeting are budgets include formalization of planning, provide framework for judging performance and aids managers in communicating and coordinating their efforts. Budgeting also helps the company project cash flow. Some disadvantages of budgeting are managers may be compelled to be bias when they want to increase resources given to their departments when they are reviewed on Performance related to the budgeted amount. Managers may feel the need to cook the books....
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This note was uploaded on 01/12/2011 for the course ACCT 561 taught by Professor Jones during the Spring '10 term at University of Phoenix.
- Spring '10
- Managerial Accounting