Budgeting

Managerial accounting is an accounting branch that covers the flow of information internally. It does not focus on financial figures and reports, unlike financial accounting. Instead, managerial accounting allows companies to enhance the quality of information. It includes both quantitative and qualitative data to support the decisions made by managers. Managerial accounting provides various tools …

What is the Purpose of Variance Analysis in Budgeting? Read More »

Companies indulge in various activities and operations that generate provide. Usually, these operations differ from one company to another. However, companies within the same industry carry out similar activities. For most companies, these activities are essential in generating income. However, they also incur expenses, which contribute to that income. Companies usually forecast these items. Companies …

What is a Budget Report? (Purpose, Advantage, and Disadvantages) Read More »

Budgetary control is a concept of financial accounting that helps to oversee the payments and receipts within an organization. It provides a greater tool to plan, monitor, and control financial activities within an organization. The concept of budgetary control can be linked with liquidity and management of the cash flow. However, the concept of budgetary …

Budgetary control – Concept, Objectives, Types, And More Read More »

A budget is a quantitative plan or forecast for a future period of a business. An activity-based budget is one of the types of budgets which is made based on an activity or different activities in a business. In an activity-based budget, a business bases its costs on an expected activity level. The activity bases …

ACTIVITY BASED BUDGETING: MEANING, ADVANTAGES, AND DISADVANTAGES Read More »

A budget is a plan or a forecast prepared by a business for a specific amount of time expressed in financial terms. Businesses make budgets for their routine accounting period, which is usually equal to one year. There are many reasons why businesses prepare budgets. Budgets are mainly a planning and control tool; however, they …

What Is Program Budget? And How Does It Work? Read More »

A budget is a quantitative plan or forecast for the future of a business in which the business allocates its resources to different departments or activities. Businesses mostly use budgets to plan for the future. Businesses use budgets as a monitor and control tool to control their actual performance according to the set budget.  There …

What is Financial Budget? – Types and Why do Businesses Need Financial Budgets? Read More »

A budget is a tool used to plan or forecast for a future period of a business. Businesses make or revise their budgets after a specified period, which is usually every year. These businesses then follow the budget for the rest of the year. At the end of the year, businesses compare the budget their …

WHEN SHOULD A BUDGET BE REVISED? Read More »

Budgeting is the process of creating a plan or a forecast for a future period of a business. Budgeting is one of the most important parts of any business as all businesses operate under a budget. Budgets allow a business to allocate its resources at the start of a period so it can generate maximum …

Limitations of Budgeting: 7 List of Limitations Read More »

Traditional budgets are the most common and oldest forms of budgets. Traditional budgets are budgets prepared by a business based on its prior period’s budget. When a business wants to develop a traditional budget or update it, it takes the previous period’s budget as a base and alters it to obtain an updated budget. This …

TRADITIONAL BUDGETING: OVERVIEW, ADVANTAGES, AND DISADVANTAGES Read More »

Zero-Based Budgeting Zero-based budgeting is a process that requires the formulation of a budget from zero. In this method, all the business activities are assessed every time the budget is prepared. This budget is developed without making any reference to the base amounts of past budgets. This budgeting starts from a “zero base,” and every …

Zero Based Vs. Activity-based budgeting Read More »