Which of the Following Statements About Budgeting Is Not True

question 200

Multiple Choice

Which of the following statements about budgeting is not true?

• A)Budgeting is an aid to planning and control.
• B)The operating budget should be prepared by top management, rather than mid-management personnel, because they have the overall objectives of the company in mind.
• C)Budgets help to coordinate the activities of the entire organization.
• D)Budgets promote communication and coordination between departments in an organization.

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Definitions:

Debt-Equity Ratio

A measure of a company's financial leverage, calculated by dividing its total liabilities by its shareholders' equity.

Total Debt Ratio

A financial ratio that measures the proportion of a company's assets financed by its total debt.

Net Working Capital

A measure of a company's efficiency and its short-term financial health, calculated by subtracting current liabilities from current assets.

Total Assets Ratio

A financial metric comparing total assets to another key financial figure, often used to assess a company's size, efficiency, or leverage.