A capital budget estimates all capital asset acquisitions and summarizes all expenses and costs of major purchases for the next year. Capital assets include items that have useful lives of more than 12 months, such as buildings, building improvements, land, furniture, fixtures, equipment, computers, musical instruments, works of art and books, writes David C. Maddox, the author of the book "Budgeting for Not-for-Profit Organizations." The main purpose of a capital budget is to forecast costs of major capital purchases.
Operating budgets indicate the products and services a firm expects to use in a budget period. It describes all the income-generating activities of a firm, including production, sales and inventories of finished goods. An operating budget typically has two distinct parts: the expense budget and the revenue budget. The expense budget indicates all expected expenses of a firm for the coming year, while the revenue budget shows all projected revenues for the coming year.
A cash budget projects all cash inflows and outflows for the next year. Cash budgets have four distinct elements: cash disbursements, cash receipts, net change in cash and new financing, writes Arthur J. Keown in the book "Foundations of Finance." A cash budget is important, because it allows administrators to timely identify periods with cash overages and shortages so they can take necessary remedial action.
Sales budgets indicate the sales a firm expects to make in units and dollars for a budget year. They detail the quantities of products or services a firm expect to sell, revenues incurred from those sales and all expenses accrued during selling. A sales budget is a planning instrument and a control mechanism, writes Kujnish Vashisht in his book, "A Practical Approach to Sales Management." Sales budget forecasts determine sales potential, or the maximum number of sales a firm can make. This information is then used to plan resource allocations to achieve those sales levels. Sales budgets serve as benchmarks or yardsticks against which actual sales performance is measured and variables such as sales volume, profitability and selling expenses are controlled.
Personnel budgets, or salary and wage budgets, are cost estimations related to labor. They forecast the costs of recruitment, hiring, training, assignment, salaries, overtime costs, additional benefits and discharge. Calculating personnel budgets includes estimating the number of staff, staffing ratios and overheads, write George M. Guess and Paul G. Farnham, the authors of the book, "Cases in Public Policy Analysis."
All revenues received by the Government through taxes like income tax, central excise, customs and other receipts, all loans receive by the Government, are credited into this account. All expenditure of the Government is incurred from this fund and no amount can be withdrawn from this fund without authorization .
This fund which has a fixed amount of money placed at the disposal of the Governor who authorizes expenditure from it during emergencies. Although prior approval of the legislature is not needed, the expenditure is made in anticipation of post-facto approval by the legislature.
Public account consists of those funds which do not belong to the Government. Government acts as a banker. These include transactions relating to Provident Funds, Small saving collections, other deposits etc. The amount received in the public account belongs to the public and not the Government. However, the government as the custodian of the fund enjoys the right to use it for development purposes. Normally, the Government is duty bound to honor the claims of individuals who wish to get their money back. Authorization of the legislature is not required for payments from the public account.READ MORE