Question : Statement 1: A budget is a financial plan.
Statement 2: Budgeting helps in resource allocation.
Option 1: Both statements are correct.
Option 2: Only statement 1 is correct.
Option 3: Only statement 2 is correct.
Option 4: Neither statement 1 nor statement 2 is correct.
Correct Answer:
Both statements are correct.
Solution : The correct answer is (a) Both statements are correct.
Statement 1 is correct. A budget is indeed a financial plan that outlines an organization's expected revenues and expenditures over a specific period. It serves as a tool for managing and controlling financial resources.
Statement 2 is also correct. One of the primary purposes of budgeting is to facilitate resource allocation. By creating a budget, organizations can prioritize and allocate funds to different activities and projects based on their strategic goals and priorities.
Therefore, both statements are correct.
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