The Practice of Developing Reasonably Challenging Budgets Tend to Help

question 30

Multiple Choice

The practice of developing reasonably challenging budgets tend to help:

• A) discourage out-of-the-box and creative thinking as there is very little room for error
• B) set unrealistic expectations and are perceived as overly ambitious and unachievable
• C) increase anxiety without motivation not meeting them is viewed as a failure
• D) motivate improved performance as employees work more intensely to avoid failure

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Definitions:

Fiscal Year

A 12-month period used for accounting purposes and preparing financial statements.

Depreciation Expense

The allocation of the cost of tangible assets over their useful lives, reflecting the reduction in value over time.

Comparative Balance Sheet

A financial statement that presents the financial position of a company at different points in time side-by-side for comparison purposes.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the consumption of the asset.