Monday March 12, 2013
Expenditures and Revenues
A financial examination of any business is crucial to the success of that business. Not only is the financial examination crucial for a business, but also so is the terms and conditions of how the business is run. The following article will discuss the financial outlook and the variety of what makes a corporation a success. The following will also cover the variety of tools that may be used as well as the revenues and expenditures that federal, state, and local agencies may use. Importance:
First, to grasp the financial outlook, individuals must first grasp what a budget is and why budgets are used. Each individual wants more money, but to achieve this, individuals needs to make the correct financial decisions that will benefit him or her in the end. No matter what the corporation is, there has to be a budget guideline, and if there is a budget guideline, maintaining the budget should be relatively easy. Technically, a budget is an outline of how and when money will be spent, usually by the individual of a corporation who directly deals with the financial aspect. Like personal budgets, budgets for corporations let the CFO (Chief Financial Officer) know where the money is going how often and what it is used on. If there is no budget, there could be a financial shortfall, and there would be no way of pinpointing where the shortfall is coming from. A budget is used and followed, there should be no shortfalls and checks and balances should be right at even each time. In some cases, if there is a shortfall, the money has to be made up somewhere, and so the best way to come up with the money is to raise the taxes (state tax, property tax, and even sales tax). Two very important words will be discussed in this article are revenue and expenditure. Not only are these two words crucial for a corporate budget, but also they are also crucial for a personal budget as well. An expenditure is money set aside or taken out for a precise job, whereas revenue is money brought into the fund either from donations or by a precise job that has been done. Budgets
Obviously a budget is crucial for the success of anyone or a corporation. As a community, all citizens are not only faced with their own personal budget, but also the budget of the city in which one lives (Smith & Lynch, 2004). No matter what stage one is at, each stage has its own budget to follow (federal, state, and local). When there are items that need taken care of, the community should be notified (usually by a city meeting) about what needs to be done, how much it will cost, where the money will come out of, and if the citizens will feel the full effect with a raise in taxes (University of Phoenix, 2012). If the money is there to use, the item(s) are put to a vote for the community to decide on. Majority the vote wins, regardless if the outcome is not what needs to take place. What is a Budget
As stated above, a budget is an outline of how and when money will be spent. Not only will the budget illustrate outgoing money but also any incoming money that will be generated and put toward future use (Wise Geek, 2012-2013) .
Why is a Budget Required
A budget is required for one main reason, to illustrate any incoming and outgoing money that could be used in other areas. When a budget is used and followed in the correct manner, shortfalls should not be found, and if so, there is lack of supervision somewhere. Not only do budgets show where money is going but also who is using the money and if there is any kind of financial abuse going on (Wise Geek, 2012-2013).
Budgets for federal, state, and local agencies are usually made public, and this is so the community can observe if money is being spent wisely. Revenue is money brought into a corporation, and when money is brought into a corporation, the...