ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The use of budgets to control firms’ activities is known as budgetary control. It is a system in which budgets are prepared & the actual results are compared with the forecasted one with the purpose of fixing up responsibility for the deviation.

Detailed explanation-2: -Budgetary control is financial jargon for managing income and expenditure. In practice it means regularly comparing actual income or expenditure to planned income or expenditure to identify whether or not corrective action is required.

Detailed explanation-3: -Budgetary control is known as setting up a particular budget by management to know the variation between the company’s actual performance and budgeted performance. It also helps managers utilize these budgets to monitor and control various costs within a particular accounting period.

Detailed explanation-4: -Budgetary control is a continuous process which helps in planning, coordination and control. 13. Budgetary control is a system of controlling costs.

Detailed explanation-5: -The objective of budgeting and budgetary control in a business organization includes; PLANNING-To produce detailed operational plan for the different sectors and facets of the organization. CO-ORDINATION-To bring together and reconcile into a common plan the actions of the different parts of the organization.