Finance- Using Budgets

Question 0

Income budget

Answer 0

Shows the agreed and planned for sales revenue of the business, over a set period of time

Question 1

Types of budget

Answer 1

Income budget
Expenditure budget
Profit budget

Question 2

Expenditure budget

Answer 2

The agreed and planned for costs of a business over a set period of time

Question 3

Profit budget

Answer 3

Combines the income and expenditure budgets, forecasts how much profit the business will make over a set period of time

Question 4

Benefits of using budgets

Answer 4

• measures performance
• can prove motivational
• gives business greater control
• monitors progress

Question 5

Drawbacks of using budgets

Answer 5

• new businesses lack experience in setting realistic budgets
• costs can change quickly
• inaccurate budgets can demotivated staff