Budget is a plan of operations to be carried out during a specified future period and this plan comprises all aspects of business activities and summarizes the result of carrying out this plan. The word Budget is derived from a French word Bougette representing a leather pouch into which funds were appropriated to meet the anticipated expenses. However the word [...]
Capital budgeting is a process which helps enterprises in examining the financial implications of the long term investment projects. The decision of accepting or rejecting an investment project as part of a company's policy depends upon the investment rate of return that such a project will generate. Capital budgeting is the process of evaluating and selecting investments in capital assets [...]
After reading this article you will learn about the benefits and limitations of budgeting. Benefits of Budgeting: Budgeting assists managers at all levels in carrying out planned activities. It has the following benefits: (a) Standards of performance: Budgets provide standards of performance for various periods and sub-periods, Actual performance can be compared against standards at frequent time intervals and timely [...]