What is the financial equation for businesses?
revenue- expenses= profit.
What are the four steps in preparing a business budget?
1. Prepare a list of each type of income and expense that will be a part of the budget
2. Gather accurate inforamtion from business records and other inforamtion sources for each type of income and expense.
3. Creat the budget by calculation each type of income, expense, and the amount of net income or loss.
4. explaine the budget to people who need financial information to make decisions.
indentify and describe the three types of budgets needed by all businesses.
1. Start-up budget- plans income and expences from the beggnning of a new business or a major business expantion until it becomes profit.
2. operating budget- describes the financial plan for ongoing operations of the business for a specific period.
3. cash budget- is an estimate of the actual money received and paid out for a specific period.
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