Quick points: Accounting and auditing; Budgetary Control

by

Part C Accounting and auditing; Budgetary Control:

Definition: Budgetary control is the process by which budgets are prepared for the future period and are compared with the actual performance for finding out variance.

 

Obj. of BC:

  • Define the objectives of the organisation
  • Providing plans to achieve the objectives
  • Coordinating the activities of various departments
  • Operating various department and cost centres economically and efficiently.
  • Increasing the profitability by eliminating waste
  • Centralising the control system
  • Correcting variance from set standards.
  • Fixing the responsibility of various individuals and making them accountable.

 

Advantage of Budgetary control:

  1. Helps to define goals, plans and policies
  2. It helps to control the activities of various departments.
  • It helps to secure better coordination.
  1. It helps to find irresponsible centres.
  2. It helps in decreasing cost of production by eliminating the
    Join Our Telegram Channel
    81.2-142.7 81.2z"/> Subscribe on YouTube
wasteful expenditure.
  • It helps to increase efficiency.
    • Facilitate centralised control and helps in smooth functioning.

     

    Disadvantage of BC:

    1. Not a viable method for a small enterprise,
    2. Difficult to predict future as it is highly uncertain and guided by myriad forces.
    3. Success depend upon the cooperation of top management.

     

     

    Expected question:

    1. What is budgetary control?
    2. What are the advantages of Budgetary control?
    3. Disadvantages of BC?
    4. Objectives of BC?
    error: Content is protected !!
    Exit mobile version