ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -1 Ideally, you should reflect on your budget at the end of every month and use that information to plan your budget for the next month. You should also sit down and assess your total budget and your overall financial goals at least once a year.

Detailed explanation-2: -One can incrementally revise budgets on a quarterly or even a monthly basis in order to avoid these problems. By doing so, all key revenue and related expense or capital decisions can be revised to reflect short-term changes in the business, making the budget a much more relevant document.

Detailed explanation-3: -The budget is typically set once a year and is fixed for at least a quarter before revising. Mom-and-pop businesses often revise the budget quarterly. And larger ones will keep their annual budget fixed. Updating the budget helps determine sales targets and limits expenditure at a more realistic level.

Detailed explanation-4: -A budget analysis should be performed at least once every quarter at a minimum and when the market changes due to a crisis like COVID-19, it should be done every week. You need to know the right time to respond to environmental changes and market fluctuations. A budget variance can be either favorable or unfavorable.