The zero based budgeting accounting essay

More Essay Examples on Employment Rubric When it comes to the complex continuing care we have reevaluate and see if it I worth having this department opened or is the job paying more money just to keep it opened and operating. We may want to look into the possibility of working with another hospital and cost sharing the cost of the department in an effort to keep the department opened.

The zero based budgeting accounting essay

Links Accounting Tutorial If you'd like to know how to better manage your personal finances our aim here is to provide you with an easy example of a bank statement reconciliation and a budget and at the same time illustrate some of the basic principles and terminology of double-entry bookkeeping using our LedgerLite program.

If it doesn't make much sense at first just continue following the instructions and it'll definitely become clearer as you progress. Because the same concepts apply to both personal and business finances you may be surprised to discover you're actually taking the first steps towards becoming the financial controller of a large organisation.

For a comprehensive introduction to double-entry booking we also recommend Dave Marshall's excellent free on-line tutorial So, you want to learn Bookkeeping!

Even if your career aspirations are not so ambitious or your interests lie in areas other than accounting which is understandable! The ability to understand financial reports such as a balance sheet or income statement is useful when making an investment decision and what better way to become familiar with them than by using them on your own personal finances.

Entering a Bank Statement Let's suppose John has just received his bank statement and it looks something like this. John notices immediately his bank account is overdrawn even though he was hopeful when he got paid there would be enough money in it to buy food, pay his rent and pay the electricity bill he forgot that his bank also charges a significant fee whenever his account is overdrawn!

He decides from now on in order to avoid overdrawing his account and being forced to pay the extra bank fee he will record his transactions in a cashbook.

This will allow John to check his balance any time without having to wait for his statement to arrive. It will also allow him to enter transactions before they occur so he can see their effect on his bank balance.

He can then adjust his spending pattern to avoid his account becoming overdrawn. John begins by downloading LedgerLite. Before he can create a cashbook and chart of accounts for his personal finances John must first delete the default cashbook, taxes and chart of accounts that are created automatically when LedgerLite is first run.

He then goes to the Maintain menu again, selects Taxes and deletes all the default taxes. He then goes back to the Maintain menu, selects Chart of Accounts and deletes all the default accounts. Equity doesn't begin with P but we had to use something other than E since we already chose that for expense.

You can think of P for property which means essentially the same as equity and represents what the company, or in our case John Smith, owns ie. There is another account type L for Liability that we'll use later when we look at budgeting. To create a new cashbook John goes to the Maintain menu and selects Cashbooks.

This account can also be selected from a list by double-clicking in the account field. Next John goes to the Cashbooks screen by clicking on Cashbooks in the dark blue navigation area on the left.

He then selects the cashbook from the drop-down list labelled Cashbook and proceeds to create entries in the cashbook from his current bank statement.

The zero based budgeting accounting essay

To create the opening entry he clicks on the New button to switch the screen to New Entry mode. Because the opening balance of John's account is in credit ie. If the opening balance was a debit ie.

This seems illogical at first glance and is one of the reasons newcomers to double-entry bookkeeping despair of it making sense.


The confusion occurs because in popular usage the terms debit and credit are most commonly used from the bank's perspective. However because what is a liability for the bank is actually an asset for the account holder when John enters the bank statement into his own accounting system he must reverse the position of the entries.Define Zero Based Budgeting: Zero-based budgeting is the method of developing a budget from scratch, or “zero base”, by examining every cost and expense to see if they are essential to the company’s operations without regard to prior years’ activities.

Words Essay on Budget (free to read) integrates the planning programming and budgeting functions it incorporates a scheme of planning in the process of budgeting.

4. Zero-based Budget: He provides the accounting skills which are necessary for the formulation of the budget estimates. Zero based budgeting in management accounting involves preparing the budget from the scratch with a zero-base.

It involves re-evaluating every line item of cash flow statement and justifying all the expenditure that is to be incurred by the department.

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Net present value method (also known as discounted cash flow method) is a popular capital budgeting technique that takes into account the time value of money.

It uses net present value of the investment project as the base to accept or reject a proposed investment in projects like purchase of new equipment, purchase of inventory, [ ]. thou greatly enrichest it with the river of God, which is full of water: thou preparest them corn, when thou hast so provided for it.

The zero based budgeting criteria involves using all the funds available to the organization to all categories. The funds available are divided among all the expenses facing the business.

Often, the main problem comes in where a new expense arises, and the organization has to trim funds from the other expenses to cover it.

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