Question

What are the main pursoses of a budget? select three options

Answer 1

In the context of business management, the purpose of budgeting includes the following three aspects:

A forecast of income and expenditure (and thereby profitability)

A tool for decision making

A means to monitor business performance

Answer 2

Budget is an estimation of cost to reflect or read financial conditions in the future for a purpose or goal. And three reason for why is important to practice it are:

1. plan of action for achieving quantified objectives.

2. standard for measuring performance, and

3. device for coping with foreseeable adverse situations.