Question

Which of the following is NOT an objective of the budgeting process?

A. To communicate management's plans throughout the entire organization.
B. To provide a means of allocating resources to those parts of the organization where they can be used most effectively.
C. To ensure that the company continues to grow.
D. To uncover potential bottlenecks before they occur.

Answer 1

The budgeting process has several objectives, including communicating management's plans, allocating resources effectively, and uncovering potential bottlenecks. Ensuring company growth is not one of the objectives.

Step-by-step explanation:

The correct answer is C. To ensure that the company continues to grow. This is not an objective of the budgeting process.

The budgeting process has several objectives:

1. To communicate management's plans throughout the entire organization: The budget serves as a tool to inform employees about the organization's goals and strategies.
2. To provide a means of allocating resources to those parts of the organization where they can be used most effectively: The budget helps in identifying areas of the organization that require more resources and allocating them accordingly.
3. To uncover potential bottlenecks before they occur: The budgeting process involves forecasting and analyzing data, which helps in identifying potential bottlenecks or obstacles that may hinder the organization's performance.

Therefore, the correct answer is C. To ensure that the company continues to grow.