Setting Budgets Flashcards
0
Q
Expenditure budget
A
How much a business should spend
1
Q
Income budget
A
Specific type of budget showing how and where money is earned in a business
2
Q
Costs found in an expenditure budget:
A
Labour costs
Rent
Capital costs
3
Q
Profit budget
A
Income budget- expenditure budget
4
Q
Planning a budget
A
1: set objectives
2: market research
3: research costs
4: complete sales/income budget
5: construct expenditure budget
6: construct profit budget
7: summarise statements in master budget.
5
Q
Reasons for setting budgets
A
- to gain financial support(bank managers want to see a budget)
- encourage delegation
- priorities, large budgets for important activities
6
Q
Problems in setting budges
A
- unforeseen changes
- time consuming
- gathering info difficult for start ups
