Which of the Following Is NOT a Valid Purpose of Budgeting

question 15

Multiple Choice

Which of the following is NOT a valid purpose of budgeting?

• A) To communicate targets to managers.
• B) To comply with financial reporting requirements.
• C) To coordinate the different activities of an organisation.
• D) To authorise managers to incur expenditure.

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Definitions:

Bond Indenture

The contract between the issuer and the bondholder.

Coupon Rate

The per year interest yield of a bond, expressed as a portion of its principal value in percentage.

Par Value

The face value of a bond or stock, representing the amount that will be paid back at maturity.

Maturity Date

The date on which a financial instrument such as a bond or loan agreement is due to be repaid in full.