ECONOMICS

Detailed explanation-1: -A business budget is a spending plan for your business based on your income and expenses. It identifies your available capital, estimates your spending, and helps you predict revenue. A budget can help you plan your business activities and can act as a yardstick for setting up financial goals.

Detailed explanation-2: -The correct answer is option D. Preventing net operating losses is not a part of budgeting.

Detailed explanation-3: -Key Takeaways. A business budget helps owners determine if they have enough money to fund operations, expand, and generate income. Without a budget, a company runs the risk of spending money it doesn’t have, not spending enough to compete, or failing to build a solid emergency fund.

Detailed explanation-4: -The answer is b. Sales budgets and direct labor budgets are operating budgets, not financial budgets. The marginal expenditure budget is not one of the master budgets.