A typical purpose of an operating budget is to project which of the following for a period?

• A. Goals and expenses
• B. Revenues and expenses
• C. Revenues only
• D. Expenses only

Answer: (B)

An operating budget is a financial plan that projects both revenues and expenses for a specific period. It provides a forecast of the money the business expects to bring in and the costs it expects to incur, guiding day-to-day decisions like production levels, staffing, and marketing. This dual focus creates a clear view of expected profitability and helps allocate resources effectively while setting benchmarks to compare actual results against the plan. Projecting only revenues would miss costs that drive profitability, while projecting only expenses would ignore incoming funds. While budgets can reflect goals, the essential purpose is to forecast the full financial picture—revenues and expenses.