Question

Preparation of budget involves the following steps. Arrange them in order :
(A) Estimate total expected income
(B) Estimate the cost of desired items
(C) Check the plans to see that they have a reasonable chance of success and possibilities of savings for future
(D) List the commodities and services required by family members throughout the proposed budget period
(E) Bring expected income and expenditures into balance

• A. (A), (C), (B), (D), (E)
• B. (D), (E), (B), (C), (A)
• C. (D), (B), (A), (E), (C)
• D. (C), (B), (A), (E), (D)

Hint:

To balance a budget successfully, always prioritize fixed, essential expenses (like housing and food) before allocating funds to flexible, non-essential expenditures.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
A family budget is a financial plan that matches a family's expected income with their estimated expenditures over a specific period.
Preparing a budget requires following a systematic process to ensure it is realistic, balanced, and supports future savings.

Step 2: Detailed Explanation:
Let us arrange the steps of budget preparation in a logical, systematic sequence:
1. First Step (D): List all the commodities, services, and needs required by family members throughout the budget period. This provides a complete picture of the family's requirements.
2. Second Step (B): Estimate the cost of these desired items and services based on current market prices. This helps determine total estimated expenses.
3. Third Step (A): Estimate the total expected income available to the family during the budget period (including salaries, investments, and other sources).
4. Fourth Step (E): Compare the estimated expenses with the expected income and adjust expenditures to bring them into balance, ensuring the family does not overspend.
5. Fifth Step (C): Review the final budget plan to ensure it is realistic, has a high chance of success, and includes provisions for future savings and emergencies.
This sequence flows logically: (D) $\rightarrow$ (B) $\rightarrow$ (A) $\rightarrow$ (E) $\rightarrow$ (C).

Step 3: Final Answer:
The correct ordered sequence corresponds to option (C).