Question

Although budgeting is often perceived as a mechanical number-crunching task for accountants, it is an important

management tool that most (if not all) successful businesses utilize to a great extent to facilitate planning and control

functions.

True

False

Answer 1

Budgeting :-

Budgeting is a process of designing, implementing and operating budget. It is the managerial process of budget planning and preparation, budgetary control and the related procedures. budgeting is the highest level of accounting in terms of future which indicates a definite course of action and not merely reporting.

As budget and budgeting involves a lot of estimation and assumptions bulb repairing and presentation. But budget will provide a benchmark performance and yardstick for the performance of the organisation.

Budget also act as an internal control to the performance of the individual employees and individual strategic business units.

Budgets is used as a tool of measurement of actual performance of the organisation from which the management and employees will implement new strategies to improve their performance and to achieve business objectives.

Hence, although budgeting is often perceived as a mechanical number crunching task for accountants, it is an important management tools that most successful business utilise to a great extent to facilitate planning and controlling functions.

The statement is True.

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