Bank Theory

Budgets and Budgetary Control | Bank Theory Budgets and Budgetary Control 1. Budget Concept A budget is a formal quantitative expression of management’s plans. It serves as a financial roadmap for an organization, showing income and expenditure plans over a future period. Budgets are used for planning, coordinating, and controlling business operations. 2. Budget Manual A budget manual is a detailed document explaining the responsibilities, procedures, and timelines related to the budgeting process. It facilitates uniformity in the budget preparation and implementation process. 3. Fixed and Flexible Budgets Fixed Budget: Prepared for a single level of activity; does not change with actual levels of output. Flexible Budget: Adjusts costs according to varying levels of activity. Useful in performance evaluation. 4. Preparation and Monitoring of Budgets Budgets are typically prepared using historical data, future forecast...