Budgetary Control System Statements

Steps:

• Identify key features of budgetary control: planning, monitoring variances, corrective actions, and feedback loops.
• Evaluate statement 1: Correct, as it aligns with setting financial targets for performance measurement.
• Evaluate statement 2: Incorrect, since budgetary control focuses on internal efficiency, not external market predictions.
• Evaluate statement 3: Incorrect, as it overstates flexibility; budgets are typically rigid for control.
• Evaluate statement 4: Correct, emphasizing variance analysis as a core tool for adjustments.

Why C is correct:

• C selects statements 1 and 4 only, matching the definition of budgetary control as a system for target-setting and variance-based corrections (per standard accounting principles).

Why the others are wrong:

• A includes incorrect statement 2 on market forecasting.
• B includes incorrect statement 3 on budget rigidity.
• D omits correct statements 1 and 4.

Not enough information on exact statements 1–4, but based on typical budgetary control concepts.

Final answer: C