Which of the following is true of budgets when they are administered thoughtfully?
A) They eliminate subjectivity in performance evaluation.
B) They can eliminate the uncertainty faced by a company.
C) They promote coordination within the subunits of a company.
D) They are a substitute the planning and coordination functions of management.

Question

Quizplus · Accepted Answer

Budgets, when thoughtfully administered, serve as a tool for promoting coordination and communication among the various subunits of a company. They help align the activities of different departments towards the overall objectives of the organization. Choices A, B, and D are incorrect because budgets cannot eliminate subjectivity in performance evaluation, cannot eliminate all uncertainty faced by a company, and are not a substitute for the planning and coordination functions of management but rather a tool to facilitate these functions.

Which of the Following Is True of Budgets When They