Which of the following is a benefit derived from budgeting?Multiple ChoiceBudgeting focuses management's attention on past performance.Budgeting avoids needing industry and economic factors in decision making.Budgeting provides a basis for evaluating performance.Budgeting avoids the need for incentives to improve employee performance.Budgeting eliminates the need for coordination across departments.
Question
Which of the following is a benefit derived from budgeting?Multiple ChoiceBudgeting focuses management's attention on past performance.Budgeting avoids needing industry and economic factors in decision making.Budgeting provides a basis for evaluating performance.Budgeting avoids the need for incentives to improve employee performance.Budgeting eliminates the need for coordination across departments.
Solution
The correct answer is: Budgeting provides a basis for evaluating performance.
Here's why:
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Budgeting focuses management's attention on future performance, not past performance. Therefore, the first option is incorrect.
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Budgeting does not avoid the need for considering industry and economic factors in decision making. In fact, these factors are crucial in creating an effective budget. So, the second option is incorrect.
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Budgeting does provide a basis for evaluating performance. It sets financial targets and allows for comparison of actual results against these targets. This makes the third option correct.
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Budgeting does not avoid the need for incentives to improve employee performance. Incentives are often necessary to motivate employees to meet or exceed budget targets. So, the fourth option is incorrect.
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Budgeting does not eliminate the need for coordination across departments. In fact, it often requires increased coordination as departments must work together to create and adhere to the budget. Therefore, the fifth option is incorrect.
Similar Questions
The following are the benefits of the budgeting, except:Select one:a. Budgets help managers tailor their operations to meet their personal goals.b. Planning involves setting short-term objectives that align with the company’s long-term strategyc. Budgets can be compared to actual amounts, and the analysis can be used to evaluate current operations and employee performance.d. Provide a more detailed picture of what goals need to be accomplished.
Multiple Choice QuestionBudgeting is used by management to ensure that activities of all departments work toward the company's overall goals. This aspect of budgeting is called:Multiple choice question.motivatecontrolcoordinate
Multiple Select QuestionSelect all that applyBudgeting guidelines that help insure budgeting is a positive motivating force include: (Check all that apply.)Multiple select question.pressure to meet budgeted results.attainable goals.budgetary slack.the opportunity to explain differences between actual and budgeted amounts.participatory budgeting.
Multiple Select QuestionSelect all that applyIdentify the benefits of budgeting. Select all answers that apply.Multiple select question.Focuses on future opportunities.Focuses on daily operations.Leads to uncertainty among employees.Assists in the control function.Motivates employees.
Which of the following is not a potential benefit of budgeting?
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