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A budget is a plan of revenue and expense, and assets and liabilities for an organization over a period of time. Usually budgets are prepared annually.

The budget of a corporation will be the summation of many budgets, each one prepared by a subsidiary, division, department or group within the corporation. Each individual budget must be approved as it moves up the line and is consolidated with other budgets.

Generally, the setting of budgets should be "difficult but achievable". Viewed this way, then, a budget is a target.

The terms budget, forecast and projections are often used, incorrectly, as synonyms.

See also