Types Of Budgets

Question 1

Incremental budget

Answer 1

Produces a series of budgets over time that only changes gradually

Question 2

Zero based budget

Answer 2

Budget starts back at zero with no account taken from previous budgets

Question 3

Rolling budget

Answer 3

Budget made up of 12 months. As one month passes, another month is added on to the end. Jan - Dec, Feb - Jan, Mar - Feb

Question 4

Strategic budget

Answer 4

Long term (5yr+) budget produced in outline only

Question 5

Operational budget

Answer 5

Short term (12mth) budget produced in detail

Question 6

Master budget

Answer 6

Brings data together from all subsidiary budgets and produces a budgeted P/L, BS and CB

Question 7

Cash budget

Answer 7

Shows planned cash flows over the budget period

Question 8

Fixed budget

Answer 8

A budget which is set for a particular level of activity

Question 9

Flexed budget

Answer 9

A budget which is adjusted to allow for changes in costs resulting from a change in the level of activity