Definition of Budget

Budget is a special planning. In this type of planning, we estimate the future incomes and expenses. For better working, all small, middle and large organisations are making budget. Without budget, you can not operate your family because in family, we also fix our different expenses on the priority because of our limited income.

Like this, all budgets are made for effective use of income. When we make budget, we can easily reach on excess budgeted profit or deficit of budget which is budgeted loss. When there is the deficit in the budget, we need to find new resources of incomes.

Two things are important in the definition. 

One is : We have the income in the form money which we have to use for paying expenses. We are making plan of our expenses in which we will pay our money.

Second is : There is the fix time of every estimation of income and expenses. Budget may be for one day, one week, one month, one quarter, one year or five year. But it must have a limit.

There are main examples of budget : Sales budget, production budget, capital budget, market budget, project budget,  expneses budget, assets budget, liabilities budget and master budget.


Related : Meaning of Budgetary Control