Chapter 10, End of Chapter, Review Questions, Exercise 1
Here is a tip:
Budgets are the future forecasts, which are prepared by the company for estimation of revenues and expenditure.
Past trend analysis- In past trend analysis, the budget figures of previous year are compared with the budget figures of present year. The actual expenses are also compared with the previous years expenses.
Future plans- Budgeting is done by keeping the future plans in mind and every future expense has to be taken into account to get the clear picture.
Expense forecast- Forecasting of all the future expenses, while formulating a budget is mandatory in framing a budget.
Fund availability- Consider all the sources of fund available in the market to meet all the expenses.