Question : Assertion: Budgeting involves forecasting future financial performance.
Reason: Budgeting is limited to the allocation of resources.
Option 1:
Both assertion and reason are correct, and the reason is a correct explanation.
Option 2: Both assertion and reason are correct, and the reason is not correct explanation.
Option 3: Assertion is false, but the reason is correct.
Option 4: Assertion is correct, but the reason is false.
Correct Answer: Assertion is correct, but the reason is false.
Solution : The correct answer is: (d) Assertion is correct, but the reason is false.
The assertion that budgeting involves forecasting future financial performance is correct. Budgeting typically includes forecasting future revenues, expenses, and financial outcomes based on historical data, trends, and management expectations.
The reason stating that budgeting is limited to the allocation of resources is false. While resource allocation is a significant aspect of budgeting, it also involves predicting and planning for various financial aspects beyond just the allocation of resources.
Therefore, the assertion is correct, but the reason is false.
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