Which of the following is not a feature of budget?

Budget creates illusion

The correct answer is option 1 i.e. Budget creates illusion.

"Budget creates illusion" is not a feature of a budget. A budget is a financial plan that outlines the expected revenues and expenses over a specific period. It is meant to provide a realistic framework for managing finances and achieving goals, rather than creating illusions. The other options are valid features of a budget.

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.