Question : Statement 1: Budgeting is a frequent process.
Statement 2: Budgets help in controlling financial activities.
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 option is (a) Both statements are correct.
Statement 1 is correct. Budgeting is often a frequent or periodic process, commonly done on an annual basis, where organizations plan and allocate resources for a specific period.
Statement 2 is correct. Budgets indeed help in controlling financial activities. They set financial targets, allocate resources, and provide a framework for monitoring and managing expenditures to ensure alignment with the organization's goals.
Therefore, both statements 1 and 2 are correct.
