summary chapter 20 - Summary of Study Objectives One of...

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Summary of Study Objectives One of management's major responsibilities is planning. A budget is a formal written statement of management's plans for a specified future time period, expressed in financial terms The budget itself, and the administration of the budget, however, are entirely management responsibilities A budget is an aid to management; it is not a substitute for management . A budget cannot operate or enforce itself. 1 Indicate the benefits of budgeting. The primary advantages of budgeting are that ahead, (b) provides definite objectives for evaluating performance, (c) creates an ea problems, (d) facilitates coordination of activities, (e) results in greater managemen personnel to meet planned objectives. The budget period should be long enough to provide an attainable goal under common budget period is one year. In small companies budgeting process is often informal . In larger for coordinating the preparation of the budget. A budget can have a significant impact on human behavior. It may inspire a m The advantages of participative budgeting are, first, that lower-level managers specific area and thus are able to provide more accurate budgetary estimates. participate in the budgeting process, they are more likely to perceive the resul reach agreement on a budget that the managers consider fair and achievable, b set by top management. disadvantages. First, it is more time-consuming (and
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.

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summary chapter 20 - Summary of Study Objectives One of...

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