Question

Which statements best explain why income should be recorded at the beginning of a budget? Check all that apply.

A.) - Income is the foundation for a budget.
B.) - Budgets are based on variables, rather than on income.
C.) - Putting income at the top helps to keep this number in mind.
D.) - Placing income at the top allows expenses to be subtracted easily.
E.) - Tracking income is more important than tracking expenses.

Answer 1

A.), C.) and D.) are all applicable to why income should be recorded at the beginning of a budget.

Answer 2

The correct answers are A), C), D). Income should be recorded at the beginning of the Budget because income is the foundation for a budget, putting income at the top helps to keep this number in mind, and placing income at the top allows expenses to be subtracted easily.

A good Budget helps in setting limits for your expenditure. Income is very important because all your expenses are based in how much money you earn. That is why is at the top of a Budget to put the revenue in order to track income variations when you have expenses. So you can know how much of the income is still available. Your total expenses never must exceed income.