Budgeting

Question 1

What is a budget?

Answer 1

A financial plan of action over time that includes parts of the business such as revenue , costs and profits.

Question 2

What are the uses of budgeting ?

Answer 2

Set targets
Allocate resources(Efficiency )
Assign responsibility
Job delegation without loss of control
Motivate staff
Monitor performance

Question 3

What are 3 types of budgets?

Answer 3

Revenue (Income ) budget
Cost budget
Profit budget

Question 4

What are the pros and cons of budgeting?

Answer 4

PROS:
Motivate staff
Clear sense of direction
Financial rewards

CONS:
Demotivate staff
High quality- data needed
Time-costly
External factors