Assertion: Modern formal budgets not only limit expenditures; they also predict income, profits, and returns on investment a year ahead. Reasoning: Unless the budgetary process is managed with extreme skill and care, the very virtues of budgeting can turn into negative.

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A. Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A. Assertion (A) is true but Reasoning (R) is not correct. Assertion (A) is not true but Reasoning (R) is correct.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

In the broadest sense, a budget is an allocation of money for some purpose. Modern formal budgets not only limit expenditures; they also predict income, profits, and returns on investment a year ahead. They have evolved into tools of control and are also used as a means of determining such rewards as profit-sharing and bonuses. Unless the budgetary process is managed with extreme skill and care, the very virtues of budgeting can turn into negative.