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Describe the Three Broad Classes of Budgets

question 72

Essay

Describe the three broad classes of budgets.


Definitions:

Additional Investment

Extra funds invested into a business by its owners or shareholders over and above the initial or previous investments.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest in the company.

Owner's Drawings

The funds taken from the business by the owner for personal use, not considered as salary or wages.

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