What are the different types of budgets prepared in an organization?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
What are the different types of budgets prepared in an organization?
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>Budgets are generally prepared at the start of the accounting period. |
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>Budget preparation involves 'estimating' and 'budgeting' various aspects of operations required in the coming period. |
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>Preparation of budget comes under 'Managerial' accounting. |
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>Through the use of these budgets, the organization can analyze the projected sales, productions, revenues, expenses, etc. for the coming period. |
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