Question

Which of the following statements is true regarding the budget vs. actual comparison disclosure?

A. It is not required for governmental entities.
B. It is only relevant for internal purposes.
C. It helps assess financial performance.
D. It is mandatory for private companies only.

Answer 1

The true statement regarding the budget vs. actual comparison disclosure is that it helps assess financial performance.

The answer is option ⇒c

Step-by-step explanation:

The budget vs. actual comparison disclosure helps assess financial performance by analyzing the variance between the budgeted amounts and the actual amounts incurred.

This comparison allows organizations to analyze the variance between the budgeted amounts and the actual amounts incurred. It helps in evaluating the effectiveness of the budgeting process and identifying areas of improvement. By comparing the budgeted figures to the actual results, organizations can make informed decisions and take corrective actions if necessary.

The answer is option ⇒c