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.

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.

A budget is a statement of expected results expressed in numerical terms. It is a plan which quantifies future facts and figures. For example, a sales budget may forecast the sales of different products in each area for a particular month. A budget may also be prepared to show the number of workers required in the factory at peak production times. Since budget represents all items in numbers, it becomes easier to compare actual figures with expected figures and take corrective action subsequently. Thus, a budget is also a control device from which deviations can be taken care of. But making a budget involves forecasting, therefore, it clearly comes under planning. It is a fundamental planning instrument in many organisations.