An office fixes a separate amount in advance for annual stationery expenses. Which plan is this?
Answer and explanation
Correct answer: Budget
A budget is a numerical plan that specifies the expected income, expenditure, or allocation of resources for a fixed period. Since a separate amount has been set aside for annual stationery expenses, it is a budget. A policy provides general guidelines for decisions, whereas a budget states a monetary allocation or spending limit. Exam tip: words such as ‘amount’, ‘allocation’, ‘expenditure limit’, or ‘financial year’ usually indicate a budget.
Frequently asked questions
What is the correct answer to this question?
Budget
Why is this the correct answer?
A budget is a numerical plan that specifies the expected income, expenditure, or allocation of resources for a fixed period. Since a separate amount has been set aside for annual stationery expenses, it is a budget. A policy provides general guidelines for decisions, whereas a budget states a monetary allocation or spending limit. Exam tip: words such as ‘amount’, ‘allocation’, ‘expenditure limit’, or ‘financial year’ usually indicate a budget.
Which subject and chapter does this question cover?
This is a Class 12 Business Studies question. Chapter: Planning. Topic: Types of plans.
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