Budget planning is an essential process for an organisation, with many advantages. However, there can be negative aspects to the budgeting process. The management accounting team of ABC plc wants you to discuss and provide examples of both of these aspects of budgeting.

Budget planning is an essential process for an organisation, with many advantages. However, there can be negative aspects to the budgeting process. The management accounting team of ABC plc wants you to discuss and provide examples of both of these aspects of budgeting.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Definition Definition Process by which financial information is analyzed, interpreted, and communicated to managers to support the achievement of an organization's goals. The main objective of managerial accounting is to maximize profits and minimize losses.

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Similar questions

Explain why budgets are useful and how management philosophy can influence the budget process.
The best that describes the top management's role in budgeting process is that top management 1. Should be involved only in the approval process 2. Lacks the detailed knowledge of the daily operations and should limit their involvement 3. Needs to be involved, including using the budget process to communicate goals 4. Needs to separate the budgeting process and business planning process into two separate processes O 1 O 2 3. O 4
how can I apply MIS ( management information system ) successfully in this topic: A PERSONAL BUDGETING/EXPENDITURE SYSTEM (TRACKING OF EXPENSES AND INCOME, REPORTING DEFICITS)
1. Budgeting involves ________. establishing specific goals executing plans to achieve the goals periodically comparing actual results with the goals All of these choices are correct. 2. Budgeting affects all of the following managerial functions except ________. planning directing controlling None of these choices are correct.
Which of the following is not a benefit of budgeting? O Provide a way to measure business performance Help managers communicate expectations and quickly. spot deviations Keep managers focussed on financial implications of their business decisions O Provide a way to hire specialized labors
Briefly describe human behavior problems that might arise if budget goals are set too tightly. What behavioral problems are associated with setting a budget too loosely? When would a company use zero-based budgeting? Why should the production requirements outlined in the production budget be carefully coordinated with the sales budget?
18 Which of the following is not the direct benefit of the budgeting process? Identification of potential bottlenecks or constraints. Goal congruence between the personal goals of managers and the goals of the organization. Payments and completion of taxes Communication throughout the organization.
indicate yes if it describes a potential benefit of budgeting orno if it describes a potential negative outcome of budgeting. Budgets help coordinate activities across departments.
1. Explain the concept of responsibility accounting and its relation with budgeting.2. Explain how the choice of the type of responsibility center (cost, revenue, profit, orinvestment) affects behavior.3. Discuss the concept of “budgetary slack”
Budgeting is an important process as managerial decisions involving budgets may have far-reaching impacts on multiple levels within an organization. Hence, such decisions must be considered thoroughly before being implemented. For this forum, identify four reasons that capital budgeting decisions are risky. Ensure to justify your answer.
b) ‘Budgeting has a number of different purposes including: Planning; Control; Performance evaluation; Motivation. Some managers believe that zero-based budget is more beneficial than other types of the budget for firms.’ Required: Critically discuss the above statement with reference to academic literature. In your discussion, you should refer to the budgeting systems you learned in this module.
The successful use o a budgeting system Acceptance and support by key management people. A sense of ownership by those assigned to carry out the Correct and reasonably accurate budgets. Inclusion of "budgetary slack" in most budgets.

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