Essay

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Budget is a plan or procedure expressed in terms of money being allocated for as income. Expenditure, profits and obviously on the capital being used in business in organizations of diversified patterns. There are various types of approaches for the preparation of budgets mainly of functional origin and they are being subdivided into two kinds: traditional view or approach and alternative or modern view of approach. These approaches are illustrated keeping in mind the behavioural issues being linked with the same needed for the preparation of budgets. The approaches in a combined manner are defined as follows: Preparation of budget based on sales, which consists of the preparation of a budget based on consumer and market research based information. The preparation mechanism is based on market surveys, price structures, and policies of advertising and targeted valuation of markets. Sales volume is based on values and volumes (Module 10, 2010).

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