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Budgeting procedures differ from Company to Company. However all budgeting procedures have the same objective, that is to ensure a smooth process of preparing budgets.
A typical budgeting procedure always starts from the top management. In the process, the top management will issues the budget forms and deadlines to various units or departments of a Company.
Each unit or department will have a head. The heads will then distribute the budget forms to his subordinates to complete the detailed information. Upon completion, the heads will collect all the budget forms from their respective subordinates and review them before passing to the Finance Unit.
The Finance unit acts as the overall budget preparing coordinator. They compile all the various departmental budget forms into a Master Budget. The master budget is then check for reasonableness and accuracy. Any errors found will be communicated to the respective head who will then rectify them immediately.
Once the master budget is finalized, it will be passed to the top management for their reviews.
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The use of prenumbered checks in disbursing cash is an application of the principle of?
Documents and procedures
The starting point in the budgeting process is the preparation of what?
cash budget
Should financing cost be included as an incremental cash flow in capital budgeting analysis?
Incremental Cash flows are included in capital budgeting decision and if capital budgeting decisions require acquisition of money from open market then its financial cost is also relevant for decision making and it is also included in it.
Why does capital budgeting look at cash flows and not net income?
Affect of net income is hard to determine due to any specific assets that's why capital budgeting decision making involves cash flows to determine cost and benefit analysis.
Why do Depreciation expenses affect capital budgeting analysis by increasing?
it is increasing the incremental cash flow
The use of prenumbered checks in disbursing cash is an application of the principle of?
Documents and procedures
The starting point in the budgeting process is the preparation of what?
cash budget
What monetary standard can be used in foreign capital budgeting?
Foreign capital budgeting requires the use of foreign cash flows and local tax rates, but U.S. inflation rates and U.S. dollars at the current exchange rates can be used.
Should financing cost be included as an incremental cash flow in capital budgeting analysis?
Incremental Cash flows are included in capital budgeting decision and if capital budgeting decisions require acquisition of money from open market then its financial cost is also relevant for decision making and it is also included in it.
What Capital budgeting decisions usually involve analysis of?
cash outflows only
Franklin lumber capital budgeting procedures case answer?
kanjroo kuch solve v karooo
Why are Discounted cash flows the best basis for capital budgeting decision?
Discounted cash flows are the best basis for capital budgeting decision due to the singular fact that they recognise the time value of money. Capital budgeting decisions are long term investment that considers how much money invested now will yield an expected returns in the future and since money is time sensitive,the best way of capturing this is by using methods that recognises time lags,hence the use of discounted cash flows
What is a good budgeting tool that is free to download?
Ace Money Lite, Microsoft Money Sunset Deluxe, Buddhi, Gnu Cash, PL Cash, Financial Fate and SimpleD Budget are good budgeting tools, which are free to download.
Why does capital budgeting look at cash flows and not net income?
Affect of net income is hard to determine due to any specific assets that's why capital budgeting decision making involves cash flows to determine cost and benefit analysis.
Why do Depreciation expenses affect capital budgeting analysis by increasing?
it is increasing the incremental cash flow
What are the difference between cash budgeting and capital budgeting?
capital expenditure budget is a part of cash budget.cash budget involves managerial activities while capital expenditure budget involves day to day activities may be for long range or short range
What is capital budgeting analysis?
Capital budgeting analysis is the analysis of all cash inflows and outflows related with the underlying asset purchase decision to evaluate the cost and benefit of purchase of asset.
