A basic financial statement that includes a budgetary comparison serves to

A basic financial statement that includes a budgetary comparison (typically the Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual) is used to demonstrate whether the government complied with its legally adopted budget.

This is a core element of accountability in governmental financial reporting and is required under GASB Statement No. 34.

Relevant References:

GASB Statement No. 34 – Budgetary Comparison Statements

GASB Codification Section 2400 – Budgetary Accounting and Reporting

GFOA Best Practices – Budget Monitoring and Reporting

Answer: B. demonstrate compliance with the legally adopted budget