Which of the Following Is an Advantage of Budgeting

question 21

Multiple Choice

Which of the following is an advantage of budgeting?

• A) Forces managers to plan.
• B) Provides information useful for control.
• C) Provides information for improved decision making.
• D) Improves communication.
• E) All of these.

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Definitions:

Budgeted Balance Sheet

A prediction of a company’s financial position at the end of a specified period, incorporating anticipated assets, liabilities, and equity based on the budget.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period to manage liquidity and ensure adequate cash flow.

Financial Budgets

Plans that outline an organization's expected revenues, expenditures, and financial objectives for a specific period.