Question

Which of the following is not a benefit of budgeting?

O it allows for coordination between different departments within a firm.


O it reduces the need for analysis with regard to company expenses.


O it provides performance evaluation and feedback.


O it compels managers to develop objectives and to plan allocating resources to achieve the objective.

Answer 1

The incorrect option suggests that budgeting reduces the need for analyzing company expenses, while in fact, budgeting necessitates thorough analysis of expenses to implement cost-saving strategies and achieve financial goals.

Step-by-step explanation:

The option that is not a benefit of budgeting is that it reduces the need for analysis with regard to company expenses. This statement is incorrect because budgeting actually increases the need for analysis by making it necessary to go through expenses thoroughly to find areas where cost-saving measures can be implemented. On the other hand, budgeting does allow for coordination between different departments within a firm, provides performance evaluation and feedback, and compels managers to develop objectives and to plan allocating resources to achieve those objectives.