A Level Accounting (9706)•9706/13/M/J/21
Explanation
Budgetary Control System Benefits and Limitations
Steps:
- Identify key statements on budgetary control: 1 (motivates performance), 2 (facilitates coordination), 3 (always flexible), 4 (highlights variances).
- Evaluate correctness: Statements 1, 2, and 4 align with standard definitions; 3 misrepresents rigidity.
- Match to options: A includes the three correct ones.
- Confirm via accounting principles: Budgets control through planning and variance analysis.
Why A is correct:
- Budgetary control motivates via targets (1), coordinates activities (2), and identifies issues via variances (4), per CIMA definitions.
Why the others are wrong:
- B omits valid variance analysis (4).
- C includes incorrect flexibility claim (3).
- D excludes motivation and coordination (1, 2).
Final answer: A
Topic: Budgeting and budgetary control
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