ections and cyclic demand projections have proven to be particularly useful (Evans, 2002).
Budgets and budgeting must be considered in two conceptual contexts. First, a budget may be considered as a noun. When considered as a noun, a budget is a detailed financial plan for an organization that (a) describes financial resources expected to be available to an organization during the period covered by the budget, (b) identifies anticipated sources of the financial resources, and (c) provides a plan for the allocation and use of the identified financial resources (Evans, 2002).
Additionally, budgeting must be considered as a verb. When budgeting is considered as a verb, budgeting is the process by which a budget is created. There exist a variety of budget types, and a variety of processes by which budgets may be created. The most relevant formats for operating budgets are (a) objects of expenditure, (b) performance, (c) program, and (d) zero-based (Evans, 2002).
The traditional budgeting process used by organizations is incremental in character. Incremental, in the context of a budgeting process, means that future budgets are based, in part, on past budgets. One of the three general types of incremental budgets used by many organizations is the objects of expenditure budget. The other two incremental formats of interest are program budgets and performance budgets (Evans, 2002).
In an objects of expenditure budget, al
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