Which of the following is a primary objective that a smart budget can fulfill for both an individual and an organization?

• A. Ensuring compliance with tax laws only
• B. Guaranteeing maximum profits every year
• C. Eliminating all financial risks
• D. Facilitating effective planning and control of financial resources

Answer: (D)

Verified step by step guidance

1. Understand the concept of budgeting: A budget is a financial plan that helps individuals and organizations allocate resources effectively, ensuring they meet their financial goals.
2. Identify the primary objectives of a smart budget: A smart budget is designed to facilitate effective planning and control of financial resources, enabling better decision-making and resource allocation.
3. Analyze the options provided: Review each option to determine whether it aligns with the primary objective of a smart budget. For example, ensuring compliance with tax laws is important but not the primary objective, and guaranteeing maximum profits or eliminating all financial risks are unrealistic goals.
4. Recognize the correct answer: The primary objective of a smart budget is to facilitate effective planning and control of financial resources, as this supports both individuals and organizations in achieving their financial goals.
5. Apply this understanding to real-world scenarios: Consider how effective budgeting can help in areas such as managing expenses, forecasting future financial needs, and ensuring financial stability.