What Is Budget? Explain Its Types With Details?

A budget is a financial plan detailing future income and expenditure. Various households and organizations formulate a budget in order to keep their financial plans in shape. By recognizing what must be spent in the coming weeks, months or years, a person can identify whether or not current income can sustain this spending. Sometimes, upon producing a budget, it will be discovered that long-term changes must be made.

Although each budget has the same fundamental rules, there are differing types of budgets. The most common budgets utilized are:

• Cash flow budgets. These budgets are utilized widely by individuals, households and businesses. They calculate how much income and expenditure there will be in the near future, to determine whether current spending is maintainable. Everyone is advised to consider formulating a cash flow budget in order to make sure they can maintain their current spending habits.

• Sales budgets. These budgets are used by retailers. They estimate the value of future sales, and can be used to plan investment and expansion. Companies can look at sales budgets when making sales goals, and may look at ways to increase the number of sales made.

• Project budgets. These are used by those who plan to undertake some sort of project; this could be a family holiday, a new retail outlet or even simply a day out. Project budgets detail the various costs of undertaking a project. Those used by businesses looking to make a profit in the long run will also include details or future income from the project.

• Production budgets. These are used by manufacturing companies who wish to know how much a product will provide them in revenue; they detail the costs of producing a product and how much it will retail for.

Explain 3 types of budget

The purpose of budgeting

Types of budget

Explain the types of budget

A budget is the amount of money which an organization allocate for a particular purpose. Every department in an organization can have his own budget and there can also be an overall budget of the organization. For more information, visit the link below.
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A sum of money allocated for a particular purpose means budget. By M.Farhad Ahmadzad

Budgets are the estimated allocation of funds for carrying out various organizational activities. The main types of budgets include sales budget, production budget, cash flow budget, marketing budget and project budget. These are the main budgets which organizations usually prepare however, there are various sub budgets which are prepared at divisional level of the organization.

A budget is simply an estimate of receipts and payments for a period of time,usually one or two years.