The principal budget factor is theA. Factor which limits the activities of the organisation and is often the starting point in budget preparation.

The principal budget factor is theA. Factor which limits the activities of the organisation and is often the starting point in budget preparation.B. Budgeted revenue expected in a forthcoming period.C. Main budget into which all subsidiary budgets are consolidated.D. Overestimation of revenue budgets and underestimation of cost budgets, which operates as a safety factor against risk.A-The principal budget factor can also be known as the limiting factor as this factor usually indicates which budget should be prepared first. Failure to identify the principal budgeting factor at an early stage could lead to delays at a later stage when managers realise targets that were set are not feasible.