Which statement about budgets is true?

Which statement about budgets is true?

• A. They provide a future plan of revenues and expenditure
• B. They guarantee equal income and expenses
• C. They eliminate the need for any savings
• D. They forecast stock prices

Answer: (A)

Budgets are planning tools that map out expected income and spending for a future period. They help you anticipate cash flow, set priorities, and guide decisions rather than just react to what happens. The statement that budgets provide a future plan of revenues and expenditure captures this purpose, making it the best description. Budgets don’t guarantee that income will equal expenses, they don’t eliminate the need for savings, and they don’t forecast stock prices.

Budgets are planning tools that map out expected income and spending for a future period. They help you anticipate cash flow, set priorities, and guide decisions rather than just react to what happens. The statement that budgets provide a future plan of revenues and expenditure captures this purpose, making it the best description. Budgets don’t guarantee that income will equal expenses, they don’t eliminate the need for savings, and they don’t forecast stock prices.