What is a budget-to-actual report and how is it used?

• A. A comparison of actual results to the budget, used to monitor performance and adjust plans
• B. A forecast for next year's budget
• C. A tax calculation
• D. A list of all transactions

Answer: (A)

Budget-to-actual reports compare what was planned in the budget with what actually occurred in a given period. They reveal variances between actual results and the budget, helping you see where performance is on track or off track. This information is used to monitor financial performance, understand why those differences happened, and adjust plans, spending, or resource allocation to keep goals achievable. It’s not a forecast for next year, not a tax calculation, and not simply a list of all transactions. Regularly reviewing these reports improves control and informs more accurate planning going forward.