BUDGETING STYLES AMONG THE 11 ACCOUNTANCY

BUSINESS AND MANAGEMENT STUDENTS

OF PATRONAGE OF MARY

DEVELOPMENT

SCHOOL

This research is

presented to the faculty of

Patronage of Mary Development School

In partial fulfillment of the requirements in

Practical Research I

By:

Christine Matas

Raoul Famillaran

Yshie Marie Trapero

Jeny Van Mae Quirabo

Kate Rosalie Binagatan

Assumpta Marie Satuita

August 2019
 TABLE OF CONTENT

Page

Title Page ……………………………………………………………………. I

Approval Sheet ……………………………………………………………………… II

Acknowledgement …………………………………………………………………….. III

Table of Content ……………………………………………………………………… IV

List of Tables ……………………………………………………………………. V

Chapter

I THE PTOBLEM AND ITS SCOPE

INTRODUCTION

Rationale of the Study

Theoretical Background

THE PROBLEM

Statement of the Problem

Statement of the Null Hypothesis

Significance of the Study

RESEARCH METHODOLOGY

Research Design

Research Environment

Research Respondents

Research Instruments
 Research Procedures

Treatment of Data

DEFINITION OF TERMS
 Acknowledgement

I would like to say thank you to the following:

First of all, we would like to thank our parents for always being there for us
whenever we need you and for always supporting us. Thank you also for
always ready in giving financial support. Thank you parents for believing us
that we will succeed this our research. Thank you our beloved parents.

To our classmates, we thank you for giving some advice in making our
research. We thank you for helping us in our research by giving some
thoughts. Thank you classmates!

We thank you teacher Edgardo Cabase for giving us kind of project

that made us a real students, because of you we became a strong
independent person, knowledgeable, and competitive students. Thank you
cher!

Lastly, to our beloved God. For enlighting our minds and foe guiding us
in our journey in making a research. We thank him very much for giving us
strength, knowledge and power for making this research be more beautiful
than we have thought. Thank you our beloved God.
 CHAPTER I

RATIONALE

Budgeting is a tool of planning and control. Budgeting involves the

steps of setting short-term objectives, specifying programs, and expressing
them in the budgets. Budgeting includes sales, production, distribution and
financial aspects of the firm. Budget. Budgeting is the process of creating a
plan to spend your money.

This spending plan is called a budget. Creating this spending plan

allows you to determine in advance whether you will have enough money to
do the things you need to do or would like to do. If you don't have enough
money to do everything you would like to do, then you can use this planning
process to prioritize your spending and focus your money on the things that
are most important to you.

In terms of the bottom line – or the end result of this trade-off –

a surplus budget means profits are anticipated, balanced budget means
revenues are expected to equal expenses, and a deficit budget means
expenses will exceed revenues. A budget is an estimation of revenue and
expenses over a specified future period of time and is utilized by
governments, businesses, and individuals.

Budgeting is the process of creating a plan to spend your money. This

spending plan is called a budget. Creating this spending plan allows you to
determine in advance whether you will have enough money to do the things
you need to do or would like to do.

Since budgeting allows you to create a spending plan for your

money, it ensures that you will always have enough money for the things
you need and the things that are important to you. Following a budget or
spending plan will also keep you out of debt or help you work your way out
of debt if you are currently in debt.
 A budget is an estimation of revenue and expenses over a specified
future period of time and is usually compiled and re-evaluated on a periodic
basis. Budgets can be made for a person, a family, a group of people, a
business, a government, a country, a multinational organization or just
about anything else that makes and spends money. At companies and
organizations, a budget is an internal tool used by management and is often
not required for reporting by external parties.

 
THEORITICAL BACKGROUND

Related Literature
Existing explanations of personal budgeting are based on
Thaler’s (1985) seminal work.
Combining the notions of “transaction utility” and gain-loss
utility, he argues that individuals treat the consequences of each
transaction in isolation. In this case, he shows that they can solve
their consumption-savings problems by means of transaction-
specific budgets, a result which echoes Strotz’s (1957)
explanation of budgeting based on separable consumption
utilities. In reality, however, people set budgets for sufficiently
long periods (a week or a month) so that each budget covers
many transactions. Also, in his (and Strotz’s) deterministic model,
people can achieve the same utility with and without budgets. But
if people faced uncertainty, they would never impose ex ante
budgets which bind ex post; that is, they do not exhibit a strict
demand for budgets as commitment devices.
Finally, transaction and gain-loss utility seem to have no
direct link with self -control problem, which the literature usually
views as the underlying cause of personal budgeting. Other
papers have shown that gain-loss utility can explain other
phenomena commonly classified as mental accounting, such as
choice bracketing (Koch and Nafziger (2016)), which are however
different from budgeting. This paper relates to the mechanism-
design literature on the trade-offs between commitment and
flexibility—in particular to Amador et al. (2006) and Halac and
Yared (2014).12 It departs from both papers by introducing
multiple consumption goods and uncertainty about intratemporal
trade-offs, thus uncovering how this type of uncertainty affects
qualitatively the commitment-flexibility trade-off and its
solutions. Amador et al. (2006) showed that in a world with
unidimensional consumption savings floors often coincide with the
fully optimal commitment plans (within a very general class of
plans).
 Halac and Yared (2014) also differ from the present paper by
focusing on the role of information persistency. In their setting,
optimal commitment plans can distort future consumption
choices, even though those choices cause no conflict of interests
between the individuals’ selves once today’s choice is fixed. The
reason is that information persistency creates a link between the
doer’s expected utility from tomorrow’s choices and his
information today; hence those choices can be exploited to relax
today’s incentive constraints, as in other dynamic mechanism-
design problems.13 The results of the present paper do not
depend on the correlation between the doer’s pieces of
information.
This paper is also related to the literature that studies how
rationing affects consumer behavior (Howard (1977), Ellis and
Naughton (1990), Madden (1991)). By imposing a savings floor
or a good-specific budget, an individual is essentially rationing his
future selves as the government of a centralized economy may
ration its citizens. Unlike this literature, however, here rationing
assumes the function of a commitment device. The rationing
literature has shown that predicting the effects of good-specific
budgets is far from trivial. Its insights will be useful to identify
conditions under which budgets can help the individual.

References
Aguiar, M. and M. Amador (2011). Growth in the shadow of
expropriation. Quarterly
Journal of Economics 126(2), 651–697.
Ali, S. N. (2011). Learning self-control. Quarterly Journal of
Economics 126(2), 857–893.
Alonso, R., I. Brocas, and J. D. Carrillo (2014). Resource
allocation in the brain. The
Review of Economic Studies 81(2), 501–534.
Alonso, R. and N. Matouschek (2008). Optimal delegation. The
Review of EconomicStudies 75(1), 259–293.
Amador, M. and K. Bagwell (2013a). Money burning in the theory
of delegation. Mimeo,Stanford University.
Amador, M. and K. Bagwell (2013b). The theory of optimal
delegation with an application to tariff caps. Econometrica 81(4),
1541–1599.
Amador, M., I. Werning, and G.-M. Angeletos (2003).
Commitment vs. flexibility. Technical report, National Bureau of
Economic Research.
Amador, M., I. Werning, and G.-M. Angeletos (2006).
Commitment vs flexibility. Econometrica 74(2), 365–396.
Ambrus, A. and G. Egorov (2009). Delegation and nonmonetary
incentives. Unpublishedworking paper.
Ambrus, A. and G. Egorov (2013). Comment on ”commitment vs.
flexibility”. Econometrica 81(5), 2113–2124.

THE PROBLEM

Statement of the Problem

1. What are the profile of the respondent in terms of:

1.1 Name
1.2 Sex
 1.3 Age
1.4 Occupation of parents

2. How it may affect in the daily allowance of the 11- Accountancy

Business and Management students in terms of:

2.1 Transportation
2.2 Food
2.3 School Related Expenses

3. What way they budget her or money every day?

4. What are the advantages of having a budget?

SIGNIFICANCE OF THE STUDY

According to Merriam- Webster dictionary, budgeting is an amount of

money available for spending that is based on a plan for how it will be spend
and allowance is an amount of something is allowed or available. If we
connect this two words, it would mean, spending the available, money within
plan. This research focuses on the significance of different point of view of
the users such as the students.
 For the students, some of the senior high school students are free
from home and mostly they are living on budget, others are living without
worrying allowance running out because they have enough to survive and
the worse is are those students who simply getting themselves into a cycle
of debt by each other mean.

This is were the significance of allowance budgeting practices exist, to

know: means to survive within daily allowance, ways to avoid over spending
and having debt, allowance budgeting practices that they do; suit to their
lifestyle and live within their means.

RESEARCH METHODOLOGY

Research Design

Descriptive quantitative design was used in the study to determine the

budgeting the styles of 11 ABM senior high school students. The researchers
selected students purposively in the school of Patronage of Mary
Development School and they were given questionnaires that serve as the
instrument of this research.

Research Environment

The research environment is conducted in Patronage of Mary

Development School in Boljoon, Cebu. It is the only private school in
Boljoon, Cebu. Boljoon is approximately 103 kilometers south from Cebu
City. Boljoon is bounded by the town of Alcoy in the north; town of Oslob in
the south. The school is specifically located at S. Medida Street Extension,
Poblacion, Boljoon, Cebu. Poblacion is one of the barangays of the
municipality of boljoon in the province of Cebu, Central Visayas which is part
of the Visayas group of islands. The Patronage of Mary Development School
was founded on January 8, 2009. The school has 3 buildings Saint Rita,
Saint Joseph and Senior Santo Nino.

Research Respondents
 The research choose 25 11 ABM students of Patronage of Mary
Development School. The researchers give questionnaires only to those
students that are willing to participate and available at the moment of
administration of questionnaires.

Name: Sex:

Age:

Occupation of parents;

Father:

Mother:
1. How it may affect in the daily allowance of the 11- Accountancy Business
and Management students in term of;

1.1 Transportation:

1.2 Food:

1.3 School Related Expenses

2. What way he or she budget her or his money every day?

3. What are the advantages of having a budget?

Research Procedures

Data Gathering

The researchers will submit a transmittal letter to the respondents,

noted by the school director of Patronage of Mary Development School. After
the request was approved, the researchers administered the research
instrument.
 After the administration of research instrument, the researchers
retrieved them and tallied the data.

Treatment of Data

The data were subjected to the following statistical procedures:

a.) Simple Percentage - was used to summarize the profile of the

students.
b.) Weighted Mean - was used to determine the study habits of the
students.

Definition of terms

To avoid misunderstanding, some terms used in the study are defined

operationally.

Budgeting – an amount of money available for spending that is based on a

plan for how it will be spent.

Senior High School Students – refers to the grade 11 Accountancy

Business and Management students of Patronage of Mary Development
School in the school year 2018-19.

Profile – refers to the 11 Accountancy Business and Management students

of age, sex, no. of siblings, occupational of Parents, family status and age.