Question

Budgets are used ________.

1) to communicate information across an organization.
2) to plan the future activities of a business.
3) as a tool in performance evaluation.
4) All of the answers describe ways budgets are used in business organizations.

Answer 1

Budgets are used to communicate information, plan future activities, and evaluate performance in business organizations.

Step-by-step explanation:

All the answers describe ways budgets are used in business organizations.

1. To communicate information across an organization: Budgets provide a clear picture of the financial resources available, allowing organizations to share this information with various stakeholders such as employees, managers, shareholders, and potential investors.
2. To plan the future activities of a business: Budgets help businesses set financial goals and allocate resources accordingly. They enable organizations to plan for future expenses, investments, and revenue generation.
3. As a tool in performance evaluation: Budgets serve as benchmarks to evaluate actual financial performance against planned targets. They help identify variances, analyze the reasons behind them, and take corrective actions if necessary.

Therefore, all of the answers describe ways budgets are used in business organizations.