A budget is best described as which of the following?

• A. Written plan that shows anticipated income and expenses for a specific period
• B. The money required to start a business
• C. The record of transactions that took place in the business
• D. A list of the business's assets

Answer: (A)

A budget is a written plan for how much money you expect to bring in and how you expect to spend it over a set period. It helps you map out cash flow, decide where to allocate funds, and spot potential shortfalls before they happen. In practice, this means forecasting income and listing expenses you anticipate, then comparing the two to stay on track. This forward-looking planning is what distinguishes a budget from other financial records. The money needed to start a business is startup capital, which is funding rather than a plan. A record of transactions is an accounting ledger, not a forecast. A list of assets is a snapshot of what the business owns, not the spending plan.