ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Balance Sheet of a company is an important document that provides a snapshot of the business by providing information on the assets, liabilities and capital/equity invested by shareholders.

Detailed explanation-2: -A cash budget is a company’s estimation of cash inflows and outflows over a specific period of time, which can be weekly, monthly, quarterly, or annually. A company will use a cash budget to determine whether it has sufficient cash to continue operating over the given time frame.

Detailed explanation-3: -A budget is a plan you write down to decide how you will spend your money each month. A budget helps you make sure you will have enough money every month. Without a budget, you might run out of money before your next paycheck.

Detailed explanation-4: -The primary purpose of using a cash flow budget is to predict your business’s ability to take in more cash than it pays out. This will give you some indication of your business’s ability to create the resources necessary for expansion, or its ability to support you, the business owner.

Detailed explanation-5: -A budget variance is the difference between the budgeted or baseline amount of expense or revenue and the actual amount. The budget variance is favorable when the actual revenue is higher than the budget or when the actual expense is less than the budget.