Which statement best describes an enterprise budget?

• A. It forecasts the costs and returns to produce a product
• B. It lists every loan and liability
• C. It shows only the marketing plan
• D. It records daily cash receipts

Answer: (A)

An enterprise budget projects the costs and returns for a single farm enterprise. It lays out the expected inputs (like seed, fertilizer, feed, labor, and equipment) and their unit costs, plus the expected yield and price for the product, to estimate gross revenue, total costs, and net profit for that enterprise over a specific planning period. This helps you assess whether that particular enterprise is financially viable and how changes in yields, costs, or prices would affect profitability. It’s focused on the economics of one enterprise, not on listing debts, detailing only a marketing plan, or recording daily cash receipts, which are different financial activities.