Question

Visit a business house and meet its Chief Executive. Find out how and what types of budgets are prepared by the House. Ask the Chief Executive the reasons for use of budgets in spite of the fact that budgets involve estimates and may have to be revised frequently due to changes in business conditions.

Answer 1

Name of the Business House: ABC Supermarket
Address: M.G. Road, Pune, Maharashtra
Name of the Chief Executive: Mr. Rahul Sharma
Date of Visit: 15th July, 2026

I. Objective of the Visit:

To understand how budgets are prepared in a business and why they are important for planning and controlling business activities.

II. Types of Budgets Prepared:

The Chief Executive informed that the business prepares the following budgets:

• Sales Budget
• Purchase Budget
• Cash Budget
• Expense Budget
• Inventory Budget

III. Reasons for Preparing Budgets:

The Chief Executive explained that budgets are prepared to:

• Estimate future income and expenditure.
• Plan business activities efficiently.
• Control costs and avoid unnecessary expenses.
• Make proper use of available resources.
• Compare actual performance with planned performance.
• Achieve the financial goals of the business.

IV. Why Budgets are Revised:

The Chief Executive stated that budgets may need revision due to:

• Changes in market demand.
• Increase in the prices of goods and raw materials.
• Inflation and changes in economic conditions.
• Changes in government policies and taxation.
• Unexpected business situations or emergencies.

V. Findings:

I learnt that budgeting is an important tool for planning, controlling costs and making effective business decisions. It helps the business use its resources wisely and achieve its objectives. Since budgets are based on estimates, they are revised whenever business conditions change.

VI. Conclusion:

The visit was informative and helped me understand the importance of budgeting in the successful management of a business. It also showed me how proper budgeting helps a business achieve its financial objectives.

Signature of Student: ______
Teacher’s Remarks: ______