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It means to spend according to what you earn and not to spend beyond that.
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How do economist calculate GDP for one year using the expenditure approach?
Economists have two methods of calculating GDP, the Expenditure approach and the Income approach. In calculating using the expenditure approach, economists add the market value of all domestic expenditures on "final goods" used within one year. (Final goods will not be resold or used to produce something new) The goods are broken into four categories: net exports, government expenditures, investment and consumption expenditures.
Classification of budgets?
Master Budget The master budget is also known as The master budget is also known as the financial plan.. Master budgets form the basis of the control systems form the basis of the control systems in organizations. The master budget in organizations. The master budget may take the form of a profit and loss account and form of a profit and loss account and a balance sheet at the end of the a balance sheet at the end of the budget period. It shows the gross budget period. It shows the gross and the net profits and the important and the net profits and the important accounting ratios. Sometimes more accounting ratios.The master budget has two components: the operating has two components: the operating budget and the financial budget. The budget and the financial budget. The operating budget includes the sales operating budget includes the sales budget, cash collections from budget, cash collections from customers, purchases budget, customers, purchases budget, disbursements for purchases, disbursements for purchases, o p eratin g ex p ense bud g ets. operating expense budgets. . ‡FIXED BUDGET: Thisis defined as a budget which is designed to remain unchanged irrespective of the volume of output or turnover attained. This budget will, therefore, be useful only when the actual level of activity corresponds to the budgeted level of activity. 7  SALES BUDGET: Sales budget is the most important budget based on which all the other budgets are built up. This budget is a forecast of quantities and values of sales to be achieved in a budget period. ‡ PRODUCTION BUDGET: Production budget involves planning the level of production which in turn involves the answer to the following questions: a.What is to be produced? b.When is it to be produced? c.How is it to be produced? d.Where is it to be produced? ‡FLEXIBLE BUDGET: CIMA defines this budget as one ³ which, by recognizing the difference in behavior between fixed and variable costs in relation to fluctuations in output, turnover or other variable factors such as number of employees, is designed to change appropriately with such fluctuations´. ‡PERFORMANCE BUDGETING: These days budgets are established in such a way so that each item of expenditure is related to specific responsibility centre and is closely linked with the performance of that standard. ‡CAPITAL EXPENDITURE BUDGET: This is an important budget providing for acquisition of assetsnecessitated by the following factors: a. Replacement of existing assets. b. Purchase of additional assets to meet increased production c. Installation of improved type of machinery to reduce costs. ‡CASH BUDGET: This budget gives an estimate of the anticipated receipts and payments of cash during the budget period. Cash budget makes the provision for minimum cash balance to be maintained at all times. ‡PERSONNEL BUDGET: This budget gives an estimate of the requirements of direct labor essential to meet the production target. This budget may be classified into ± a.Labor requirement budget b.Labor recruitment budget ‡RESEARCH AND DEVELOPMENT BUDGET: This budget provides an estimate of expenditure to beincurred on R & D during the budget period. AR&D budget is prepared taking into consideration the research projects in hand and new R & D projects to be taken up. ‡ZERO BASE BUDGETING: The zero basebudgeting is not based on the incremental approach and previous figures are not adopted as the base. Zero is taken as the base and a budget is developed on the basis of likely activities for the future perio
What is Balanced budget multiplier?
BALANCED-BUDGET MULTIPLIER:A measure of the change in aggregate production caused by equal changes in government purchases and taxes. The balanced-budget multiplier is equal to one, meaning that the multiplier effect of a change in taxes offsets all but the initial production triggered by the change in government purchases. This multiplier is the combination of the expenditures multiplier, which measures the change in aggregate production caused by changes in an autonomous aggregate expenditure, and the tax multiplier which measures the change in aggregate production caused by changes in taxes.
What is meant by limiting factor in budgeting?
The flow of an activity is limited by the presence or absence of one or many factors necessary for survival. That factor is called as limiting factor.
What is the difference between planned and unplanned budget?
A planned budget is one that is structured and has been well thought out. An unplanned budget is one that pays bills and expenses as they come without a preset plan.
What are the examples of limiting expenditures within one's budget?
ahmm.... limit it.. to budget your answer.. ``THAT'S ALL THANK YOU ``
What is meant by limiting expenditures within one's budget?
It means don't spend money you don't have.
What is development expenditure in budget?
After pending non dvelopment expenditure in the anual budget money will be eveporated. this expenditure flow one side direction and can not dvelope human capacity, can not save any thing physicaly.
What is Non development Expenditure in Budget?
After pending non dvelopment expenditure in the anual budget money will be eveporated. this expenditure flow one side direction and can not dvelope human capacity, can not save any thing physicaly.
What is a good budget?
A budget should be called a good one when it effectively strikes a balance between projected income and possible expenditure.
Why is a Capital Budget prepared separately from an Operating Budget?
There are two types of expenditure due to there time period of use. 1 - Capital Expenditure 2 - Revenue/Operating Expenditure As Capital Expenditure is utilize for more then one fiscal or accounting year that's why it's budgeting method is different and it is made for different items separately. Operating Budget is made for every year and evaluation is also made for yearly basis because operating expenditures are requires to allocate every year that's why both these budgets are made separately.
What are the item's of capital expenditure and recurrent expenditure?
Recurrent or Revenue Expenditure are those expenditure the benefits of which are utilized by company in one single year and capital expenditure are those expenditure the benefits of which are utilized for morethan one fiscal year. Revenue expenditure Example: Inventory etc Capital Expenditure : plant, machinery, building etc.
When comparing multimeter's which one would be the best?
The one most appropriate for the job and within your budget
What is the best plotter?
There is no 'best' plotter. It is the one most appropriate and within your budget.
Is it true that consistency checks will only allow valid transactions from one budget type to another budget type?
Yes, consistency checks will allow only valid transactions from one budget type to another budget type. The reason behind this is so one will stay within their budget and not exceed it.
What is the purpose of the sales budget report?
The purpose of the sales budget report is to ascertain what the year's budget status would have on the next year's anticipated budget. In order to anticipate what the next year's sales might be, one needs to find out what the last year's sales were.The purpose of the sales budget report is to help plan for the future. The budget can be used to control expenditure and increase revenue for the next financial year.
What do you mean by revenue expenditure?
Expenditure for which benefit is expected to be taken in one fiscal year from occurance of expenditure is called 'Revenue Expenditure" Expenditure for which benefit is expected to be taken for morethan once year is called 'Capital Expenditure'
