Question

Which of the following is NOT an advantage of budgeting?

a.It provides organizational independence.

b.It provides resource information that can be used to improve decision making.

c.It forces managers to plan.

d.It aids in the use of resources and employees by setting a benchmark that can be used for the subsequent evaluation of performance.

Answer 1

The following is NOT an advantage of Budgeting:

a. It provides Organizational independence.

Budget is a statement of income and expenditure of a certain period. Budgets are useful for forecasting the operating activities and financial position of a business enterprise. Budgeting ensures good business practice because they plan for future. Organizational independence is a state in which an organization is not vulnerable for personnel turnover. Independent Organizations are normally mon profits or non government organizations (NGO) . NGO is defined to be a collection of people who to pursue a charitable goal be it local ,national or global level. Budgeting is applicable on dependent organizations instead of independent Organizations.