Question

All of the following are necessary for budgets to be effective except: Multiple Choice Employees affected by a budget should be consulted when it is prepared. All budgeted amounts must be spent to ensure that budgets aren't reduced for the next period. Goals should be challenging and attainable. Managers must be aware of potential negative outcomes of budgeting, such as budgetary slack. Evaluations should be made carefully with opportunities to explain differences between actual and budgeted amounts.

Answer 1

The correct answer is letter "B": All budgeted amounts must be spent to ensure that budgets aren't reduced for the next period.

Step-by-step explanation:

In case budgets have leftovers and the firm's goals were met, it is a good indicator. This situation does not necessarily imply the budget for the next period will be reduced but it is likely that the firm will evaluate where exactly they cut expenses to attempt repeating such practice one more time. Thus, the company's expenses must be incurred accordingly. Being under budget should not have an influence.