REVOLVING BUDGET Meaning and
Definition
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A revolving budget refers to a financial plan or system that continuously repeats or cycles through a specified period, typically a year, enabling the allocation and reallocation of resources based on changing circumstances or priorities. It is commonly utilized by businesses, organizations, or governments to manage their financial activities effectively.
In a revolving budget, the total available funds are typically divided into various categories or line-items, representing different expenses or projects. These categories often include operational costs, research and development, marketing, employee salaries, capital investments, and more. Each category is assigned a specific budget amount, which can be adjusted as necessary throughout the designated time period.
The primary feature of a revolving budget is its flexibility, allowing for modifications to allocations based on evolving needs or unforeseen circumstances. As the budget cycle progresses, decision-makers can reassess priorities and make changes accordingly. For example, if unexpected expenses arise or a particular project requires additional funding, funds can be reallocated from other categories or line-items without the need for a complete budget overhaul.
Furthermore, a revolving budget enables organizations to continuously monitor and analyze their financial performance by comparing actual expenditure against the budgeted amounts. This evaluation helps identify areas of overspending, underspending, or cost savings, facilitating informed decision-making and efficient resource utilization.
Overall, a revolving budget serves as a dynamic financial management tool that promotes adaptability, accountability, and improved financial control within an organization.
Common Misspellings for REVOLVING BUDGET
- eevolving budget
- devolving budget
- fevolving budget
- tevolving budget
- 5evolving budget
- 4evolving budget
- rwvolving budget
- rsvolving budget
- rdvolving budget
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- r4volving budget
- r3volving budget
- recolving budget
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- regolving budget
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- revilving budget
- revklving budget
- revllving budget
- revplving budget
Etymology of REVOLVING BUDGET
The word "revolving budget" does not have a specific or distinct etymology, as it is a combination of two separate words with their own origins.
1. "Revolving" - The word "revolving" comes from the Latin term "revolvere", which means "to roll back" or "to turn around". It is derived from the combination of the Latin prefix "re-" (meaning "back" or "again") and the verb "volvere" (meaning "to roll" or "to turn").
2. "Budget" - The word "budget" has its roots in the Old French term "bougette" or "bouge", which referred to a small bag or purse. Eventually, it evolved into the English term "budget", which initially denoted a financial statement or an itemized list of expenses.
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