Final answer:
A budget is the control device for assessing progress in planned activities and spending of allocated resources. It controls, plans, coordinates, communicates and evaluates the use of financial resources in an organization.
Step-by-step explanation:
The type of control device for assessing the progress of planned activities and the expenditure of resources is referred to as a budget. A budget serves as a financial plan that provides a detailed analysis of how finances should be allocated and how actual results will be compared against planned objectives. Five key aspects are integral to the effective use of a budget:
- Control—Budgets provide a means to monitor and control the use of resources and performance.
- Planning—Budgets facilitate the planning of organizational activities in advance and assign resources accordingly.
- Coordination—Budgets ensure that different departments work together to achieve the organizational goals.
- Communication—Budgets communicate the financial plan and expectations to all relevant parties within and outside the organization.
- Evaluation—Budgets allow for the evaluation of performance and the progress towards achieving strategic goals.