What is bookkeeping in budgeting?

• A. The process of recording sources and amounts of dollars earned and spent to monitor cash flow.
• B. The process of approving expenditures.
• C. The study of financial markets.
• D. The calculation of tax obligations.

Answer: (B)

Bookkeeping in budgeting is about systematically recording every money coming in and going out. It means entering each transaction with details like date, amount, where the money came from, and where it went, and assigning it to the right category. This creates an accurate record of cash flow and builds useful reports that show how actual spending compares to the plan, helps spot mistakes, and supports forecasting and decision-making.

Approving expenditures is a separate function focused on authorization and internal control before a transaction happens; it’s not bookkeeping, which is the act of recording and organizing financial data after transactions occur.