Businesses use budgets primarily for control

Steps:

• Identify common budget purposes: planning future activities, controlling costs, and coordinating departments.
• Evaluate option D (2 only) as correct, assuming 2 is cost control, the core function.
• Eliminate options including 1 and 3 if they represent less essential or incorrect reasons like mere forecasting without action.
• Confirm D aligns with standard accounting principles where budgets enforce financial discipline.

Why D is correct:

• Budgets serve as a control tool per managerial accounting definitions, comparing actual vs. planned performance to correct deviations.

Why the others are wrong:

• A includes all, but 1 and 3 overstate non-core uses like speculative planning.
• B omits 2, ignoring control as the primary budget role.
• C excludes 1 but wrongly includes 3, which may not be a valid reason.

Not enough information on exact statements for 1, 2, 3.

Final answer: D