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 or individual's expected revenues and expenditures over a specific period of time. It serves as a roadmap for managing and controlling finances.

Statement 2 is also correct. Budgeting involves allocating resources, such as money, time, and other assets, to different activities and departments based on priorities and goals. It helps ensure that resources are distributed efficiently to achieve desired outcomes.