7

Budget and Budgetary Control

LEARNING OBJECTIVES

On completion of the study of the chapter, you should be able to understand:

  • What is Budget and Budgeting?

  • What is Budgetary Control?

  • Objectives, advantages and limitations of Budgetary Control.

  • Comparison between Budget and Budgetary Control.

  • Comparison between Standard Costing and Budgetary Control.

  • Concept of Zero-based Budgeting.

  • Classification of Budget.

7.1 MEANING OF BUDGET

According to CIMA, London, Budget is defined as ‘a financial and/or quantitative statement prepared and approved prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining a given objective. It may include income, expenditure and the employment of capital

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