23. Which of the following statements are correct, with regards to budgeting?
(i) The budget must be set centrally
(ii) Budgets should never be exceeded
(iii) There are financial rules governing the layout and calculations of a budget, eg once set, a budget cannot be altered

A. (ii) only

B. (ii) and (iii)

C. They are all false

D. They are all true
Budgets may be set centrally, but may also be set by departmental managers.

Budgets may be exceeded – especially a sales budget!
Unlike financial accounts, there are no rules. Budgeting is part of Management Accounting. Once set, the budget CAN be altered – for example flexed to be more accurate to actual circumstances.