Question

Principles in Financial Management

Answer 1

Therefore are total 10 principles of financial management which are listed below:

Principle 1: A budget must be prepared to provide smooth way for business.

Principle 2: A budget must be attainable, reasonable and realistic.

Principle 3: A budgeted must be prepared based on few analyses include clear identification of the budget’s purpose.

Principle 4: Comparison must be there to actual financial results with budgeted information on regular basis.

Principle 5: If there is any deviation from budget to actual a detailed analysis must be made and necessary action should be under taken.

Principle 6: If expenditure exceeds budget, justification must be provided for the same.

Principle 7: All expenditures should be authorized with relevant policies and rules.

Principle 8: Each unit must complete its evaluation before new activity started.

Principle 9: Each unit cost must be making sure that not to exceed its benefit.

Principle 10: Each unit must be protected with un authorized use of resources and un expected losses.