ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The correct answer is option D. Preventing net operating losses is not a part of budgeting.

Detailed explanation-2: -a budget helps you forecast future inflows and outflows. It provides a plan of action for achieving financial goals. how can a budget help when you are anticipating cash shortages or a cash surplus? A budget helps ensure that there is money available to meet unexpected or unplanned shortfalls.

Detailed explanation-3: -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-4: -A budget variance is an accounting term that describes instances where actual costs are either higher or lower than the standard or projected costs. An unfavorable, or negative, budget variance is indicative of a budget shortfall, which may occur because revenues miss or costs come in higher than anticipated.