Day: September 30, 2020

THE OBJECTIVES/GOALS OF A BUSINESS 1. Profit maximization – This is a traditional and a cardinal objective of a business. This is so for the following reasons: To earn acceptable returns to its owners. (i.e. Must not be less than Read More …

The functions of Financial Manager can broadly be divided into two: The Routine functions and the Managerial Functions. Managerial Finance Functions Require skilful planning, control and execution of financial activities. There are four important managerial finance functions. These are: a) Read More …

DEFINITION: Business finance is the process by which a financial manager/accountant provides finance for business use as and when it is needed. This provision has to be undertaken on the basis of the needs of a company. On the other Read More …

Advantages of continuous stock-taking in cost accounting Advantages – The advantages of continuous stock-taking are : Closure of normal functioning is not necessary. Whole time specialized staff can be engaged for the purpose since the work is spread throughout the Read More …

Zero-Based Budgeting (ZBB): Zero based budgeting is a cost benefit approach where by it’s assumed that the cost allowance for an item is zero and will remain so until the manager responsible justifies the existence of the cost item and Read More …

Incremental budgeting Before an annual budget is prepared, a base should be chosen from which the process will begin. The traditional approach is to base the current budget on the current year’s results plus an extra amount for estimated growth Read More …

Budgets are developed round existing organizational structures and departments which may be inappropriate for current conditions and may not reflect the underlying economic realities. They may introduce rigidity and hamper creativity in the organization The budgetary system, perhaps because of Read More …

1 Imposed style of budgeting In this style, senior managers prepare budgets with little or no input from operating personnel or operational managers. The budget is then imposed on the employees who have to work with the budgeted figures. Imposed Read More …

Human behavior and budgetary planning and control An important feature in control in business is that control is exercised by the managers over people. Their attitude and response to budgetary planning and control will affect the way in which the Read More …

Budgets can be classified as follows Functional budgets Sales budget Production budget Material usage budget Material purchase budget Labour cost budget Cash budget   Sales budget This is a forecast of sales in a given period both in quantity and Read More …