Intentionally understating revenues and / or overstating costs during a budgeting process is called:
A) Budgetary slack
B) Zero-based budgeting
C) Fraudulent financial reporting
D) Participative budgeting

Question

Quizplus · Accepted Answer

Intentionally understating revenues and / or overstating costs during a budgeting process is called budgetary slack. This is a common practice in organizations to create a cushion in the budget and increase the likelihood of achieving favorable results. It can help managers meet their targets without the risk of falling short, but it can also hinder the organization's ability to reach its full potential.

Intentionally Understating Revenues and / or Overstating Costs During a Budgeting