How should financial budgets be thought of?
A) as a tool for limiting expenditures
B) as a method for obtaining the most productive and profitable use of an organization's resources
C) as a method for rationing the profits from the past year
D) as a method for determining who should receive the largest pay raise
E) as a tool for forecasting future profits

Question

Quizplus · Accepted Answer

Financial budgets should be thought of as a method for obtaining the most productive and profitable use of an organization's resources. Budgets help organizations plan and allocate their resources in the most effective way possible to achieve their goals and objectives. Limiting expenditures is only one aspect of budgeting, and budgets do not determine pay raises. While budgets can provide insight into future profits, they are not the primary tool for forecasting.

How Should Financial Budgets Be Thought Of