Question

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.

Answer 1

Budgeting has multiple advantages: it requires managers to plan ahead, gives information for control and improved decision-making, and enhances communication within an organization.

Step-by-step explanation:

When considering the advantages of budgeting, the correct answer is e. All of these. A well-structured budget forces managers to plan by anticipating revenues, expenses, and potential financial challenges. It also provides information useful for control, enabling managers to monitor the financial performance of the company and make necessary adjustments.

Furthermore, budgeting facilitates improved decision making as it allows managers to allocate resources effectively based on the company's strategic objectives. Lastly, an established budget improves communication within an organization by setting clear financial targets and expectations for team members and stakeholders.