Answer:
Incremental approach.
Explanation:
A budget is a financial plan used for the estimation of revenue and expenditures of an individual, organization or government for a specified period of time, often one year. Budgets are usually compiled, analyzed and re-evaluated on a periodic basis.
Basically, the first step of the budgeting process is to prepare a list of each type of income and expense that will be integrated or infused into the budget.
This ultimately implies that, before preparing a budget, it is of utmost importance to know total income (inflows) and expenses (outflows).
The final step to be made by the management of an organization in the financial decision-making process is to make necessary adjustments to the budget.
In Business management, an incremental approach is a budgeting approach which is often used when the relationship between inputs and outputs for a particular project are weak or nonexistent. Thus, the incremental approach involves selecting the actual performance or current (previous) year's budget as a base while adding incremental amount of money for the new budget period.
This ultimately implies that, the actual performance or current (previous) year's budget are only taken as a starting point.
