Question: Please write 2 paragraphs on each question.
1) Renaldo's Boutiques, Inc., has 14 stores located in a midwestern part of the United States. Renaldo, the president of the company, has set budgets for each store that do not allow for lost, stolen, or misplaced merchandise (inventory shrinkage). Research shows the disappearance of store merchandise is attributed to a combination of internal and external causes:
Customer theft-35 percent
Employee theft-40 percent
Administrative errors-18 percent
Vendor dishonesty-7 percent
This chapter discussed two types of budgeting philosophies. Which philosophy do you believe Renaldo is following? Use information in this problem to support your answer. Do you think this is correct? Is yes why and if no, what would you use?
2) All sizes of companies use different types of budgeting software. Do some research on line by downloading a free trial of software and/or research the software's use. Is it used for financial forecasting? Is it GAAP compliant? Is this software used in a certain industry? Does it work with accounting software like Quick Books or other software used by companies to record/prepare financial statements. Check to see if the software can prepare year to year comparisons, and actual to budget comparisons with variances. Explore the different options available.
You could even look at a personal budgeting program that maybe you could use in your own life.
Do you work at a company that uses a budgeting/forecasting software? Explore what is currently used.