Why are budgets useful in the planning process?
A)They provide management with information about the company's past performance.
B)They help communicate goals and provide a basis for evaluation.
C)They guarantee the company will be profitable if it meets its objectives.
D)They enable the budget committee to earn their paycheque.

Question

Quizplus · Accepted Answer

Budgets are useful in the planning process because they help communicate goals and provide a basis for evaluation. By setting specific financial targets, a company can track its progress towards achieving its overall strategic plan. Budgets can also help identify potential areas of concern and enable management to make adjustments before any problems arise. Additionally, budgets can enhance communication and coordination among different departments and stakeholders, ensuring everyone is working towards the same goals.

Why Are Budgets Useful in the Planning Process