The Best Way to Achieve More Accurate and Achievable Budgets

question 11

Multiple Choice

The best way to achieve more accurate and achievable budgets is to:

• A) have the budget committee monitor actual results on a frequent basis so that quick punitive action can be taken when actual results do not comply with budgeted expectations.
• B) have the budget prepared by top executives only.
• C) have all employees participate in the preparation of the budget.
• D) let it be known that budget variances will not be tolerated.

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Definitions:

Invest

The action of allocating resources, usually financial, with the expectation of achieving a profit or material result.

ESOPs

Employee Stock Ownership Plans; these provide company stocks to employees as part of a retirement plan or incentive program.

Tax Advantages

Financial benefits derived from certain investments or transactions that are treated favorably by tax laws, reducing tax liability.

Commitment

The state of being dedicated or loyal to a cause, activity, job, or relationship, typically demonstrated through continuing involvement and effort.