accounts nitin

8/2/2019 Accounts Nitin

1/11

Accounting

ManagementBudgetary Control

&

Cost Accounting


2/11

BUDGET

Budget: A formal statement of the financialresources set aside for carrying out specificactivities in a given period of time.

It helps to co-ordinate the activities of theOrganisation.

An example would be an advertising budget or

sales force budget.


3/11

A budget is a comprehensive and coordinated plan,expressed in financial terms, for the operations andresources of the firm for some specified period in thefuture. Budget programs are designed to carry out avariety of functions like, planning activities,implementing plans, communicating, motivating and

authorizing actions. A budget is a written plan for thefuture. A complete budget for a firm is often called themaster budget.


4/11

Essentials Of A Budget

It is prepared in advance and is based on future planof action.

It relates to a future period and is based on objectivesto be attained.

It is a statement expressed in monetary or physicalunit prepared for the formulation of policy.


5/11

BUDGETING

Establishing a planned level of expenditures,

usually at a fairly detailed level. A company may

plan and maintain a budget on either an accrual or

a cash basis.


6/11

BUDGETARY CONTROL

Budgetary Control is defined as "the establishment ofbudgets, relating the responsibilities of executives tothe requirements of a policy, and the continuous

comparison of actual with budgeted results either tosecure by individual action the objective of that policyor to provide a base for its revision.


7/11

FEATURES:

a. Objectives: Determining the objectives to be achieved, over the budget period,and the policy(ies) that might be adopted for the achievement of these ends.

b. Activities: Determining the variety of activities that should be undertaken forachievement of the objectives.

c. Plans: Drawing up a plan or a scheme of operation in respect of each class ofactivity, in physical a well as monetary terms for the full budget period and itsparts.

d. Performance Evaluation: Laying out a system of comparison of actualperformance by each person section or department with the relevant budgetand determination of causes for the discrepancies, if any.

e. Control Action: Ensuring that when the plans are not achieved, correctiveaction are taken; and when corrective actions are not possible, ensuring thatthe plans are revised and objective achieved


8/11

Objectives Of Budgetary

Control Budget manual Responsibility for budgeting:

Budget committee

Fixation of budget period

Determination of key factors

Making of forecasts

Approval from top management


9/11

Cost Accounting

Cost accounting is the process of determining andaccumulating the cost of product or activity. It is aprocess of accounting for the incurrence and the

control of cost. It also covers classification, analysis,and interpretation of cost. In other words, it is asystem of accounting, which provides the informationabout the ascertainment, and control of costs of

products, or services. It measures the operatingefficiency of the enterprise.


10/11

Objectives

1. Determining selling price,

2. Controlling cost

3. Providing information for decision-making

4. Ascertaining costing profit

5. Facilitating preparation of financial and otherstatements.


11/11

accounts nitin

Documents