Budget Commitee

Question 1

The use and role of. Budget committee

Answer 1

A group of people that creates and maintains fiscal responsibility for an entity or organisation

Question 2

Incremental budgeting

Answer 2

Is budgeting based on slight changes from the preceding periods budgeted results or actual results. This is a common approach in business where management does not intend to spend a great deal of time formulating budgets, or where it does not perceive any great need to conduct a thorough re-evaluation of the business — this usually happens when there is not a great deal of competition in an industry – so profits tend to be perpetuated from year to year

Question 3

A zero based budget

Answer 3

Is a method of budgeting in which all expenses must be justified for each new period

Question 4

Budgetary slack

Answer 4

Is the deliberate under estimation of budgeted revenue or over estimation of budgeted expenses – this allows the manager a much better chance of “making there numbers” which is particularly important to them