Question

Arrange the 'steps in making a budget'
A. Appropriate estimation of the costs of desired items
B. Bringing expected income and expenditures into balance
C. Estimating the total expected income from all sources
D. Checking the plan to see the chances of attainment
E. List commodities and services needed by the family throughout the proposed budget period
Choose the correct answer from the option given below:

• A. E, C, A, D and B
• B. E, A, C, B and D
• C. D, A, B, E and C
• D. D, E, C, A and B

Hint:

Steps in Family Budgeting: 1. List needs (E) $\rightarrow$ 2. Estimate costs (A) $\rightarrow$ 3. Estimate income (C) $\rightarrow$ 4. Balance income & expenses (B) $\rightarrow$ 5. Check feasibility (D).

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
Family financial management and household budgeting procedures (Nickell and Dorsey Gross and Crandall).

Step 2: Detailed Explanation:
Standard managerial sequence for formulating a family budget:
1. Step 1 (E): List all commodities and services needed by the family throughout the budget period.
2. Step 2 (A): Estimate the total costs of the desired listed items.
3. Step 3 (C): Estimate the total net expected income from all sources.
4. Step 4 (B): Bring expected income and expenditures into balance (adjusting desires/wants to fit income).
5. Step 5 (D): Check the budget plan to verify realistic chances of attainment and emergency reserves.
Sequence: E $\rightarrow$ A $\rightarrow$ C $\rightarrow$ B $\rightarrow$ D.

Step 3: Final Answer:
Therefore, the steps in making a budget are E, A, C, B and D, corresponding to option (B).