Budgets and Budgetary Control
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 85 rapid-fire Q&A cards.
Define a budget in two key attributes.
Plan for future income/expenses; serves as control yardstick against actual performance.
Distinguish budgeting from budget.
Budget is document; budgeting is complete activity including planning, consolidation, approval, rollout.
What is a functional budget?
Budget relating to specific business function (sales, production, labour, cash, CAPEX, etc.).
How is Sales Budget built?
Bottom-up by territory, product, month; expressed in both rupees and units.
Production Budget derives from which budget?
Sales Budget; calculates units needed after adjusting opening/closing finished goods stock.
What three sub-budgets comprise Production-Cost Budget?
Materials Budget, Labour Budget, Overhead Budget (variable + fixed components).
How does Cash Budget differ from P&L budget?
Cash budget records when money actually received/paid; P&L records when earned/incurred.
Define Master Budget.
Consolidated budget combining all functional budgets; presents projected P&L, Balance Sheet, Cash Flow.
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