A budget is a quantified plan of action for a forthcoming period. Budgets can be prepared using a variety of different approaches.

Which of the following statements regarding approaches to budgeting are correct?
(1) Incremental budgeting builds previous inefficiencies into the budget whereas zero-based budgeting encourages employees to avoid wasteful expenditure

(2) Beyond budgeting uses adaptive management processes and plans on a rolling basis

(3) Activity-based budgeting ensures that the budget is continually updated by adding a new budget period once the most recent budget period has ended

(4) Flexible budgeting recognises different cost behaviour patterns and so takes into account the organisation’s overall strategy during the budget process

A. (1) and (2) only
B. (1), (2) and (4)
C. (3) and (4)
D. (1) and (3)