Which of the following are correct statements about a budget?

It is a formal written statement of management's plans for a specified future time period.

It becomes an important basis for evaluating performance.

It promotes efficiency and serves as a deterrent to waste and inefficiency.

All of these options are correct statements.

All of the options are correct

Explanation:

It is a formal written statement of management's plans for a specified future time period. Management develops budgets to organice financial and economic efforts towards achieving goals (e. g. sales, variable costs, fixed costs, depreciation, amortization, etc.). Budgets are developed through out a process in which all business and support areas should be involved, sharing valuable inputs about business variables such as demand, client behavior, operations efficiency, among others. Budget should have a future vision, leveraging on historical data to enhance quality of projections.

It becomes an important basis for evaluating performance. It's a key instrument to assess how different lines of product / business are achieving their goals, allowing adjustments and the implementation of corrective actions.

It promotes efficiency and serves as a deterrent to waste and inefficiency, due to the fact that it allows to quantify and measure the impact of applying different actions and policies.