Question

In budgetary accounting if we consider, that budgetary accounts are used to record the budgetary inflows and outflows estimated or authorized in the annual budget. In what way(s) do you think budgetary accounting contributes to achieving budgetary control over revenues and expenditures? Why, in your opinion, is this important?

Answer 1

The Bugetary accounting system and the budget are closely related. The information in the the budget must agree

with the company’s ledger accounts. In turn, the accounts must be designed to provide the appropriate information

for preparing the budget. Budgetary accounting is design in such a way, which integrated with budget requirement

in the form of line item information, comprehensive information, historical data, variance data, valuation Method

as usued compatible with budget, etc. Using these accounting information, budgetary controller tightly forcast the

revenue and expenditure and periodically analysing the same with the actual data provided by budgetary accounting.

By analysing controller come to know the varaince between budget and actual then need to revise the the budet to

control the variances in revenue and expenditure. So it can be seen that budgetary control is not possible is information

as taken from the budgetary accouting is not timely shared, accurately accounted, comparative information including

historical data, method of accouting, etc provided. So budgetary accounting contribute highly to achieve budgetary control.