Question

a) There is no difference between a forecast and a budget
b) Sales budget is the most important budget among all budgets.
Of these

• A. Both (a) and (b) are true
• B. (a) is false, but (b) is true
• C. (a) is true, but (b) is false
• D. Both (A) and (B) are false

Answer 1

The correct option is B (a) is false, but (b) is true

Forecasting is a technique that uses historical data as inputs to make informed estimates that are predictive in determining the direction of future trends.

A budget is a financial plan for a defined period, often one year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows.

A sales budget is only an estimate of anticipated revenues, it is a vital means of projecting income based on factors such as economic conditions, competition, production resources and expenses.