Urgent help

CA N.Dhivya Lakshmi (Chartered Accountant) (515 Points)

02 December 2011  

my friend asked a question.can anyone please provide answer to it.its urgent..detailed answer or link to the answer would be helpful

QUESTION

 

Several assumptions are commonly made by accountants when preparing or interpreting budgetary information.

 

Explain why each of the following assumptions may be made by accountants when designing a system of budgeting, and to set out in each case any arguments which, in your view, raise legitimate doubts about their validity

 

a)      Budgetary performance should be reasonably attainable but not too easy to meet

 

b)      Participation by managers in the budget-setting process leads to better performance

 

c)      A manager’s budget reports should exclude all matters which are not completely under their control.

 

               d)      The budget statement should include only matters which, can be easily and accurately measured in monetary terms.