A Budget

· Is a predetermined statement of a company’s objectives during a period of time.

·The budget is like a plan which guides the managers who are responsible for achieving certain business objectives.

·The budget normally has an overall or master budget which is made up of sectional/subsidiary budgets prepared by the different sections in the company.

· Be careful that a budget is a plan but a forecast is merely a prediction of what will happen as a result of a given set of circumstances.

Budgetary Control

· Is a system which uses the budgets for planning and controlling a business activities.

· It quantifies and is financially oriented to guides the managers to achieve certain business objectives..

· Managers will compare the actual with the budgeted figures and the variances will then be investigated and corrective actions be taken