Answer to Question 1
A budget is a financial statement that projects income, expenditures, or both over a specified future time. Once executives and employees develop a firm's goals and objectives, the next step is to construct a budget that projects the costs the firm will incur and the sales revenues it will receive during a specific time period. Budgeting for a business often begins with the construction of departmental budgets for sales and various types of expenses. Then individual budgets can be combined into a company-wide cash budget. For major expenditures and long-term financing needs, a firm can also construct a capital budget.
Answer to Question 2
False
