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A budget is a quantitative plan prepared:
APrior to a defined future period
BAfter the period closes
COn the basis of variances
DOnly for audit
Answer & Solution
Correct answer: A. Prior to a defined future period
1. CIMA defines a budget as a quantitative statement prepared and approved prior to a defined period of time.
2. It expresses policy for that period.
3. Preparing it after the period would defeat its planning purpose.
4. Hence a budget is prepared prior to a defined future period.
_Source: ICAI BoS Inter Paper 3, Ch 15 "Budget", §15.1 ¶3_
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