Accounting & auditingLesson 1 of 1 in the course Managerial and cost accounting

Budget Planning: Personal, Government, and Corporate Budgets

5 flashcards · 5 quiz questions · 5 match pairs · 4 fill-in sentences · English

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Summary

A budget turns plans into measurable estimates of resources and spending over a defined period. This lesson introduces the purpose and basic structure of budgets, explains surpluses and deficits, and compares government and personal budgets.

A budget is a calculation plan for a defined period, often a month or a year. It is usually financial, but it may also track quantities of resources, time, environmental effects, or other measures. A budget can include anticipated sales and revenues, costs and expenses, assets, liabilities, and cash flows.

All flashcards

What is a budget?
A plan estimating resources and their intended uses over a specified period.
What is a budget surplus?
A condition in which income exceeds expenses, leaving resources for saving or later use.
What is a budget deficit?
A condition in which expenses exceed income or other available resources.
What are the three broad types of government budgets?
Operating budgets plan ongoing operations; capital budgets plan longer-term investments; cash budgets plan receipts and payments.
What does a personal budget allocate?
It plans how personal income will be divided among expenses, savings, and debt repayment.

Quiz questions

  1. When does a budget show a surplus?Answer: When income is greater than expenses.
  2. A household plans monthly income of $4,000 and expenses of $4,200. What does its budget show?Answer: A deficit of $200.
  3. Which type of government budget plans investment in longer-term assets and projects?Answer: The capital or investment budget.
  4. Why can past spending and existing debt help when preparing a personal budget?Answer: They help make estimates realistic and account for repayment obligations.
  5. How can comparing actual results with budgeted amounts help managers?Answer: It can show whether plans are being met and where adjustments may be needed.

Based on the Wikipedia article Budget, licensed CC BY-SA 4.0. Adapted into a summary, flashcards and quizzes.

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