The Two Common Approaches to Budgeting Is the Top-Down Budget

question 105

Short Answer

The two common approaches to budgeting is the top-down budget approach and the bottom-up approach.Both methods have advantages and disadvantages both from a practical standpoint and behavioral issues.List two advantages related to each method and two disadvantages that create problems with each approach.

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Definitions:

Motivators

Factors or incentives that stimulate people's interest or enthusiasm for doing something, often linked to job satisfaction and performance.

Favourable Tax

Tax regulations or policies that are advantageous to individuals or businesses, often resulting in reduced tax liabilities.

Tax-Free

Financial or income transactions that are exempt from taxation by the government.

Key Employees

Individuals who have a significant impact on a company's performance, often holding positions that are crucial for the business's operations and strategic goals.