Penn Foster Principles of Management (BUS 110) Practice Test

The process of comparing actual performance to budget data to verify accomplishments is known as budgetary control. This involves monitoring and analyzing financial outcomes against the planned budget to determine whether the organization is operating within its financial limits. Budgetary control is essential for identifying variances—those differences between the projected budget and actual results—which helps management make informed decisions about operational adjustments, cost management, and resource allocation.

This process is integral to helping organizations stay aligned with their strategic goals and financial objectives, as it provides a clear picture of how well resources are being utilized and whether goals are being met. By regularly reviewing actual performance against the budget, management can ensure accountability and make timely interventions if performance diverges from expectations.