City Budget Essay Example | Topics and Well Written Essays - 500 words

City Budget - Essay Example This research will begin with the statement that in making a budget a number of considerations are factored into the decision-making process which is a prerequisite in budgeting. A budget which is a financial plan aids in ensuring that funds are not misappropriated and only identified stuff is dealt with as per the plan. It shows estimate expenditures and income or revenue sources to finance the expenses. This may be in form of the different types of loans and grants, taxes, bills and the expenses include payments of human resources, initiation of new development plans, repayment of previously taken loans amongst others. Â  According to the Scott, a budget preparation requires a study and evaluation of previously made budgets to understand the trend and the constants that are independent of time. Generally, the average of the first seven years is considered because it gives a true representation of the previous budgets. It is important to note that there are years of economic depres sion and inflation in a budget. It should be prepared on time and the prior year’s actual financial activity should form the basis of your start. The revenue sources are analyzed and conservative amounts are given, no overestimates are included in a budget forecast. A combination of recurrent and fixed/investment of year’s expenditure is added to find the general expenditure of the current year and a liberal approach is applied to indicate expenditure; in expenses, it is better to overestimate than to underestimate.