ECONOMICS

Detailed explanation-1: -A budgeted income statement lists the estimated revenue, expenses and profit for a given period. Also known as a profit and loss forecast, this financial report is based on predictions, not on historical data. Generally, it takes into account a company’s previous financial results and its budget for the coming year.

Detailed explanation-2: -A budgeted income statement (sometimes called a budget income statement) is a document that helps estimate and evaluate a business’ revenue and expenditure. It’s a planning tool many companies create at the beginning of the fiscal year as they develop and finalize their annual budgets.

Detailed explanation-3: -The sales and administrative budget is a nonmanufacturing budget that relies on the sales estimates to pay commissions and other variable expenses. The sales and expenses estimated in all of these budgets are used to develop a budgeted income statement.

Detailed explanation-4: -The easiest way to create a revenue (or sales) forecast is to input your annual growth rate. Look at the percentage growth in revenue over previous periods, and use that information to make an informed assumption about your future revenue.

Detailed explanation-5: -Master budget A master budget is an aggregation of lower-level budgets created by the different functional areas in an organization. It uses inputs from financial statements, the cash forecast, and the financial plan. Management teams use master budgets to plan the activities they need to achieve their business goals.