Budgeting: Budget Balanced, Budget Deficits and Budget Surplus Essay Example
1.0 INTRODUCTION In general definition, budgeting is the concerned with the transaction of financial resources into human purpose. Budget is refer to the spring financial statement, which focus on tax. There are a few principles of good budgeting that is comprehensiveness,predictability, transparency and periodicity. Budgeting is effective in facility process when it forces awareness of overall fiscal constraints, enables the priontization of spending in the linewith policy objective. The budget objective is to aggregate fiscal disipline, allocative efficiency and operational efficiency. The budgeting process can begin with preparing a sales budget. Based on expected sales volume, merchandisers can budget purchases, selling expenses, and administrative expenses. Next, the capital expenditures budget is prepared, which includes all budgeted purchases and direct labor.
There are three type of budget, that is balance, surplus and deficit.
2.0 BUDGET BALANCE Budget balance is situation in financial planning or the budgeting process where total revenue is equal or greater than total expenses. In other words, a budget can be considered balanced in hindsight, after a full year’s worth of revenue and expenses have been incurred and record. For instance, a company’s operating budget for an upcoming year can also be called balanced based on predictions on estimates. A balanced budget occurs when the total sum of money government collects in a year is equal to the amount it spends on goods, services and debt interest. The budget balance is usually reported as percent of GDP.
2.1 Balanced-Budget Multiplier Balanced-budget multiplier is a measure of the change in aggregate production caused by equal to one, meaning that the multiplier effect of a change in taxes offsets all but the initial production triggered by the change in government purchases. This multiplier is the combination of the expenditures multiplier, which measures the change in aggregate production
There are three type of budget, that is balance, surplus and deficit.
2.0 BUDGET BALANCE Budget balance is situation in financial planning or the budgeting process where total revenue is equal or greater than total expenses. In other words, a budget can be considered balanced in hindsight, after a full year’s worth of revenue and expenses have been incurred and record. For instance, a company’s operating budget for an upcoming year can also be called balanced based on predictions on estimates. A balanced budget occurs when the total sum of money government collects in a year is equal to the amount it spends on goods, services and debt interest. The budget balance is usually reported as percent of GDP.
2.1 Balanced-Budget Multiplier Balanced-budget multiplier is a measure of the change in aggregate production caused by equal to one, meaning that the multiplier effect of a change in taxes offsets all but the initial production triggered by the change in government purchases. This multiplier is the combination of the expenditures multiplier, which measures the change in aggregate production