A characteristic of a good budget is
A)that it is easy to understand by top management.
B)that is encompasses every account in the firm's accounting system.
C)that management is satisfied that it will provide shareholders with an adequate return on their investment.
D)that it is easy to understand and communicate to all within the firm.

Question

Quizplus · Accepted Answer

A good budget should be easy to understand and communicate to all within the firm, so that everyone is aware of their roles and responsibilities in achieving the budget's goals. While it is important for top management to understand the budget, it is not the only consideration. Encompassing every account in the firm's accounting system is not necessary for a good budget, as it can be focused on the most important accounts. The satisfaction of shareholders is also important, but it is not a characteristic of the budget itself.

A Characteristic of a Good Budget Is