BUDGETING is the quantified financial plan for a forthcoming accounting period. Its derived from a French word ‘ BOUGETTE’ . BUDGETING is the act of balancing ones cash flow with the expenditure. Its an approach of managing finance and its been compiled annually. It is also an estimate of income, resources and expenditure for a certain period of time..

REVENUE is an income which is being is been generated by the government

EXPENDITURE is an expenses i.e money paid out or an amount spent

TYPES OF BUDGET

1.    SURPLUS BUDGET; when a revenue is more than the expenditure i.e when the revenue planned by the government is more than their revenue.

2.    DEFICIT BUDGET: when the planned revenue is not up to the government revenue i.e when the expenditure is more than the revenue. In case of deficit whereby the government doesn’t have enough  money, government can raise fund through;

A.      Rasing loans from the banks and non bank and as well as the public through the sales of treasury bills, treasury certification

B.      Raising loans from international monetary institution e.g IMF, ABD,

C.      Raising loans from international monetary commercial creditors e.g London club, paris club of creditors

3.    BALANCED BUDGET: when a revenue is equal to the expenditure.

NEEDS OR NECESSITY OF BUDGETTING

1.     To achieve quantitative goals

2.     To control resources

3.     It support/ back up/ assist political decision

4.     Its a form of authorization in government

5.     To fight inflation or recession

6.     Ensures values for money

7.     Serves as a check against financial irresponsibilities

8.     It monitors how the govt spends money

9.     Motivate managers to be proactive

10.                         To evaluate the performance of a manager

ELEMENT/ COMPONENT/ PARTS/ CONSTITUENTS/ INGREDIENT/ FACTORS OF A BUDGET

1.       Projected expenses: amount of money which is expected to spend in the coming fiscal year  which is usually broken down into categories you expected to spend it.

2.       Projected income: amount of  money expected to make for a coming year broken down by sources

3.       Adjustment to reflects realities as the year goes on. It happens where the budget is new where there is need to adjust the budgeted amount.

4.       Sources of finance: where to get funds

                                                      STAGES OF BUDGETING SYSTEM

1.       BUDGET CONCEPTION: 

2.       Budget preparation: a stage where all dept in the organization submits their revenues and expenditure proposal for the forthcoming year. Adjustment can also be made in this stage

3.       Budget approval: a stage where the budget is signed in order to become a legal document.

4.       Budget execution: a stage where funds are being disbursed for projects and implementation of policies.

5.       Budget monitoring & evaluation: a stage to make sure that the budget allocated for a particular purpose is being used for that purpose, and not for other purpose. 

Bank Reconciliation definition

Bank reconciliation is the analysis and adjustment of differences between the cash balance on the bank statement and the balance showed in the holders account records. It is used to know if the bank records and company records are correct/accurate. E.g where a check is being issued but yet to be presented

    

Discrepancies between the bank statement & cash book

1.     Timing differences: this is when a cheque is issued at the end of month, such check will not reflect in that month but the next month.

                                     Issues under time differences

a.      Unpresented check which may arise as a result of late presentation of check at at the bank as at the time of reconciliation. This can be a post dated check

b.     Uncredited check which may be a check that does not mean the compliance of what the bank was given. This can be dishonoured or returned check. Another error is inter changing of name e.g Steven V. Steve

2.     Service charge & interests

3.     Credit transfer made directly to the customer

4.     Dividends made directly to the bank

5.     Outstanding others, whereby a bank made payment to another on behalf of a customer

Bank Reconciliation terminologies

1.     Deposit in transit: this is a cash which is being received and recorded but has not being recorded into the book of the bank

2.     Outstanding check: this is a check payment that has been recorded but no deduction of cash has been done since the check has not been cleared in the bank account.

3.     Service charge: this is an expenses by the bank on the service rendered to customers which is listed on the bank statement

4.     Non sufficient funds: this are dishonoured check which arise as a result of having less funds in an account. 

Bank statement definition

                                                                BANK  STATEMENT

Bank statement can be define as a printed report that is being released by the bank on a fixed date every month that shows/list the deposits, withdrawal, service charge, interests earned, checks paid which is being incurred on an account. In other words, its the printed record of balance in a bank that shows the amount that has been paid into the account as well as the amount that has been withdraw from the account and its been issued periodically to the account holder..

According to Adisa Olashile (2016),  bank statement can be defined as the printed record that summarized all transactions that take place in an account for a specific period of time which is being issued to the account holder at an agreed interval i.e every month, every quarter or every year. The transaction in the context could be the deposits, withdrawal, interests earned, check paid etc.