Which of the following is incorrect about 'Budget' ?

It is not helpful in taking care of deviations.

The correct answer is option (3) : It is not helpful in taking care of deviations.

Plans made for periods of one year or less are termed as budgets. Budgets are example of financial planning exercise in greater details. They include detailed plan of action for a period of one year or less.

The statement that is incorrect about "Budget" is: It is not helpful in taking care of deviations.

This statement is incorrect because budgets are indeed helpful in detecting and addressing deviations or variations between expected (budgeted) figures and actual results.

When a budget is created, one of its primary purposes is to serve as a benchmark or standard against which actual performance can be compared. If there are significant deviations or differences between budgeted and actual figures, it is an indication that something may be going off track, and management can use this information to investigate and take corrective actions.

Budgets are essential tools in financial and management control, as they enable organizations to monitor their financial performance and make adjustments when necessary to achieve their goals.