ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -False. A budget plan is meant to be a guide, not a static document. You should periodically review and update your budget plan as your income or expenses change.

Detailed explanation-2: -Implementing Budgets Static budgets typically act as a guideline, meaning they can be changed or adjusted once the variances have been identified via a flexible budget.

Detailed explanation-3: -A fixed budget shows the expected results of a responsibility center for only one activity level. Once the budget has been determined, it is not changed, even if the activity changes.

Detailed explanation-4: -A budget helps create financial stability. By tracking expenses and following a plan, a budget makes it easier to pay bills on time, build an emergency fund, and save for major expenses such as a car or home. Overall, a budget puts a person on stronger financial footing for both the day-to-day and the long term.

Detailed explanation-5: -A flexible budget allows for changes and updates to be made when assumptions used to devise the budget are altered. A static budget remains the same, however, even if the assumptions change.