ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Focused on the short term
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Like other predictions, they may not be 100% accurate
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May lack Flexibility
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Can be time consuming to make
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Requires a wide range of available financing to ensure accuracy
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Detailed explanation-1: -ADVERTISEMENTS: The following points will highlight the six major limitations of budgetary control, i.e, (1) Uncertain Future, (2) Budgetary Revisions Required, (3) Discourages Efficient Persons, (4) Problem of Co-Ordination, (5) Conflict among different Departments, and (6) Depends upon Support of Top Management.
Detailed explanation-2: -Explanation for correct answer: Preventing net operating loss is not a part of budgeting as the budget is prepared towards finding realizable goals.
Detailed explanation-3: -Detailed Solution. The correct answer is Reserved. A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Budget is a microeconomic concept that shows the trade-off made when one good is exchanged for another.
Detailed explanation-4: -Budgets are only as good as the data being used to create them. Budgets can lead to inflexibility in decision-making. Budgets need to be changed as circumstances change. Budgeting is a time consuming process – in large businesses, whole departments are sometimes dedicated to budget setting and control. More items