(Drury) The Budgeting Process - Stages in the budgeting process - Initial preparation of budgets
3 important questions on (Drury) The Budgeting Process - Stages in the budgeting process - Initial preparation of budgets
Where should the preparation of budgets start?
At the lowest levels of management, it should be refined and coordinated at higher levels.
Why should the 'bottoms up' approach be used?
Because this approach enables managers to participate in the preparation of their budgets and increases the probability that they will accept the budget and strive to achieve the budget targets.
In what way could the preparation of budgets start? (2)
1. Using past data.
Past information may provide useful guidance, but changes in future conditions must be taken into account.
2. Guidelines of top management
Past information may provide useful guidance, but changes in future conditions must be taken into account.
2. Guidelines of top management
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