Future Business Leaders of America (FBLA) Agribusiness Practice Test

What is an enterprise budget?

1. A forecast of market trends

2. A full income statement for one segment of a business

3. A breakdown of asset valuation

4. A method for calculating labor costs

The correct answer is: A full income statement for one segment of a business

An enterprise budget is a detailed financial plan that outlines the expected revenues and costs associated with a specific segment of a business, such as a particular crop or livestock operation. It provides a comprehensive overview of all the anticipated income and expenses, helping business owners make informed decisions about resource allocation, pricing, and investment strategies. When you look at the functions of an enterprise budget, it serves as a tool for evaluating the profitability of a particular enterprise within a larger agricultural operation. By breaking down expected income and expenses, it allows for better financial planning and analysis. The other options, while related to financial concepts, do not correctly define an enterprise budget. A forecast of market trends refers to predicting future market behaviors rather than detailing specific incomes and expenses. A breakdown of asset valuation pertains to assessing the worth of physical assets rather than the operational aspects of a specific business segment. Finally, calculating labor costs is a component that may be included in a broader budget but does not encompass the full scope of what an enterprise budget represents.