Question

Budget refers to

• A. Planned target of performance
• B. Use of handling future activities
• C. Systematic allocation of resources
• D. Statement of expected results expressed in numerical terms

Hint:

Budgets are crucial for planning and controlling resources, as they set the expected financial outcomes in numerical terms.

Answer 1

The Correct Option is D

Step 1: Understanding the concept of a budget.
A budget is a financial plan that sets forth the expected income and expenditure for a specific period. It is essentially a statement of expected results, usually expressed in numerical terms, detailing projected revenues and expenditures. The primary purpose of a budget is to plan and control resources effectively.
Step 2: Analyzing the options.
(A) Planned target of performance: Incorrect. While budgets may help in setting targets, they are not specifically defined as the target itself.
(B) Use of handling future activities: Incorrect. Although budgets are used for planning future activities, the definition is not fully accurate.
(C) Systematic allocation of resources: Incorrect. This is one function of budgeting, but it doesn't fully capture the definition of a budget.
(D) Statement of expected results expressed in numerical terms: Correct. A budget is a financial plan that quantifies expected outcomes.
Step 3: Conclusion.
A budget is best described as a statement of expected results expressed in numerical terms, making option (D) the correct choice.