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.