Cost and Management Accounting

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Introduction to Budget

A budget is a financial plan that outlines expected income and expenses over a specific period, guiding the allocation of resources to meet organizational goals.

  • It helps organizations estimate revenues, plan expenses, and set financial goals.
  • It helps in financial estimation to forecasts expected income, expenses, and resource requirements.
  • It is prepared in advance and includes the future course of action.
  • It is designed to align with specific business objectives and targets.
  • Serves as a benchmark for monitoring financial performance.
  • It helps in financial control by enabling tracking and control of expenses.
  • Helps allocate resources effectively.
  • Assists in planning and making informed financial decisions.
  • It helps in risk management by identifying potential financial risks and establishes a cushion.

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