Types of Budget like Master Budget, Cash Budget, Flexible Budget.

 A Budget is a financial documents that forecasts coming income and expenditure of organization for a fox period for optimum utilisation of resource and achieve predefined goal.

There are many types of Budget. Some important types of Budget is as below-

1.Master Budget- It is the first type of Budget.The budget that consists all small types of Budget of Organization this type of budget is called Master Budget.It is presented in monthly, quarterly form. It consists Sales Budget, Production Budget, Selling and administrative expense budget etc.

In other words we can say that Master Budget is financial documents that forecast sales, production, purchase investments and expenses of organization.

It is used by top class management to make long term policy, programme, strategy on the basis of current year forecasting.

2.Cah Budget- It is the second type of Budget, It is prepared to forecast cash inflow and outflow of organization. It shows the cash position of organization in coming financial year. It also shows the cash requirement of organization in coming financial year to perform the function of business by effective and efficient way. It may be made by Receipts and Payment method or Adjusted Profits and Loss methods or Balance sheet method.

3.Flexible Budget-It is also an important type of Budget.The Budget that is made according to changing production or sell of product of the organization this type of Budget is called Flexible Budget.

In other words we can say that the Budget that forecasts cost and revenue of organization for sufficient level of output this type of Budget is called Flexible Budget.

It consists fixed cost, variable cost, semi variable cost etc.It helps profit planning of organization. It also improves the performance of organization.