A budget can be used as an effective control tool in monitoring an entity's achievements of its plans if the structure of its master budget mirrors the entity's:
A) balance sheet.
B) chart of accounts.
C) statement of profit or loss.
D) statement of cash flows.

Question

Quizplus · Accepted Answer

A budget is most effective as a control tool when it mirrors the entity's chart of accounts, as this ensures that the budget is aligned with the accounting system, facilitating easy comparison and analysis of actual results against budgeted figures.

A Budget Can Be Used as an Effective Control Tool