Budget / Budgetary Proposals/Budgeting
Budget / Budgetary Proposals/Budgeting : This can have either of two meanings, depending from whose perspective it is viewed. An economist and government financial planner will see it one way and the accountant and business person will see it another way. The economist and government financial planner will see it as that statement by the government, which outlines its proposed revenue- raising measures, as well as its intended patterns of spending. To such a person, it is in reality, the government's fiscal policy; in that it is pursued with a view towards the effective management of the economy. Such budgets are usually of two types: Balanced and unbalanced, with the main revenue-raising measure being Taxation. The Balanced Budget is one in which expected revenue is equivalent to intended spending. An Unbalanced Budget is one in which expected revenue is not equivalent to intended spending. Where expected revenue is greater than intended spending, the budget is said to be in surplus. When the expected revenue is less than intended spending, the budget is said to be in deficit. The deficit is usually corrected through government borrowing and the issuing of instruments such as bonds and debentures. To the accountant and business person, the budget is that formal statement of future plans, usually expressed in monetary terms. Such a budget may be of the following types: Capital Expenditures/Plant and Equipment - A listing of plant and equipment to be purchased in anticipation of a proposed production programme. Cash - A forecast of cash receipts and disbursements. Manufacturing - A statement of the estimated costs for raw materials, direct labour and manufacturing overheads associated with producing the number of units estimated in the production budget. Master Budget - a comprehensive plan for the business that typically includes budgets for sales, expenses, production, equipment, cash, and also a projected income statement and balance sheet. Merchandise Purchases - an estimate of the units (or cost) of merchandise to be purchased. Production - an estimate of the number of units to be produced during a budget period. Sales - an estimate of goods to be sold and revenue to be derived from sales. It is this aspect of budgeting which is usually the starting point in the overall budgeting process
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