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What is Financial Management? Financial Management is all about planning, organizing, directing, and controlling the economic pursuits such as acquisition and utilization of capital of the firm. To put it in other words, it is applying general management standards to the financial resources of the firm. Scope of Financial Management To understand the financial management scope, first, it is essential to understand the approaches that are divided into two sections. Traditional Approach  Modern Approach Approach 1: Traditional Approach to Finance Function During the 20th century, the traditional approach was also known as corporate finance. This approach was initiated to procure and manage funds for the company. For studying financial management, the following three points were used (i) Institutional sources of finance. (ii) Issue of financial devices to collect refunds from the capital market. (iii) Accounting and legal relationship l between the source of finance and business. In this

Question 1. Dec 2014: The budgeting system designed to change in relation to the level of activity actually attained is known as (A) Fixed budgeting (B) Flexible budgeting (C) Performance budgeting (D) Functional budgeting Answer: (B) Flexible budgeting Question 2. Dec 2014: From the following, which one is a functional budget (A) Master budget (B) Fixed budget (C) Sales budget (D) Current budget Answer: (C) Sales budget Question 3. Dec 2014: The following information is available: Wages for January: ₹ 20,000 Wages for February: ₹ 22,000 Delay in payment of wages: 1 /2 month The amount of wages paid during the month of February is (A) ₹ 11,000 (B) ₹ 22,000 (C) ₹ 20,000 (D) ₹ 21,000 Hint: Answer: (D) ₹ 21,000 pattern in each quarter is based on 80% of the sales of the current quarter and 20% of the sales of the next quarter. The production for quarter IV will be (A) 36,000 units (B) 42,000 units (C) 48,250 units (D) 38,250 units Hint: Answer: (C) 48,250 units department (C) Flexible bud