Question

Name and explain the 3 different objectives of budgeting.

Answer 1

Answer)

1) Predefine Objectives:A budget is useful to predetermine the objectives regarding the performances like sales revenue to be sold etc and design path to achieve it.

2)Predetermine the cash flows: Although Cash inflows are also determined,it mainly serves as the maximum cash outflow restrictions to the management for cost management.

3) Performance review:It helps in review of our own performance to see whether our every forecasted objective is achieved or is there any areas where we are lacking behinds and take necessary steps to improve such areas