Budgeting Flashcards
1
Q
What is a budget?
A
A financial plan for the future concerning the revenue and costs of a business
2
Q
Name the the 3 main types of budget
A
Revenue or Income Budget
Cost or Expenditure Budget
Profit Budget
3
Q
What is revenue budget?
A
Expected revenue
4
Q
What is cost budget?
A
Expected costs based on sales budget
5
Q
What is profit budget?
A
Based on the combined sales and costs budgets
6
Q
What are variances?
A
A variance arises when there is a difference between the actual and budget figures
7
Q
What does it mean when a variance is favourable?
A
It means it’s positive, figures turn out to be better than expected
