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Budget planning5/7/2023 ![]() read moreand expenses to ensure that they don’t run out of cash before the next paycheck. In the case of an individual, it comprises wages or salaries or other payments. Personal Budget: An individual or family plans their monthly earnings Earnings Earnings are usually defined as the net income of the company obtained after reducing the cost of sales, operating expenses, interest, and taxes from all the sales revenue for a specific time period.Types of Budgetingįollowing are different types of budgets prepared by individuals, businesses, and governments. They then send it to top management for approval. In contrast, in the bottom-up approach, managers prepare department-wise reports based on team inputs and past experiences. ![]() Ultimately, the top management prepares the breakdown of spending and passes it down for implementation. read more and gradually moves down levels. In the top-down approach, top-level management estimates costs Estimates Costs Cost estimate is the preliminary stage for any project, operation, or program in which a reasonable calculation of all project costs is performed and thus requires precise judgement, experience, and accuracy. It can be approached top-down or bottom-up. On the other hand, estimated expenditure is the cash outflow that an individual, firm, or government expects to make in the upcoming period. Anticipated revenue is the potential cash inflow that a person, business entity, or government might generate. read more and estimated expenditure are the two crucial components. In the case of the federal government, it refers to the total amount of income generated from taxes, which remains unfiltered from any deductions. ![]() read more and savings the government relies on it to run the nation.Īnticipated revenue Revenue Revenue is the amount of money that a business can earn in its normal course of business by selling its goods and services. ![]() It is everywhere homemakers use it to manage their monthly expenses Expenses An expense is a cost incurred in completing any transaction by an organization, leading to either revenue generation creation of the asset, change in liability, or raising capital. You are free to use this image on your website, templates, etc, Please provide us with an attribution link How to Provide Attribution? Article Link to be Hyperlinkedīudgeting is done by individuals, families, groups, companies, and the government-to plan, monitor, and control finances.
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