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A Budget |
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· Is a predetermined statement of a company’s objectives during a period of time. |
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·The budget is like a plan which guides the managers who are responsible for achieving certain business objectives. |
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·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. |
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· 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. |
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Budgetary Control |
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· Is a system which uses the budgets for planning and controlling a business activities. |
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· It quantifies and is financially oriented to guides the managers to achieve certain business objectives.. |
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· Managers will compare the actual with the budgeted figures and the variances will then be investigated and corrective actions be taken |