Which of the following statements is true?
A) Participative budgeting means that a company's budget should be prepared by lower-level employees.
B) The attitudes and actions of upper-level management have little impact on the effectiveness of a company's budget.
C) Employees often find that budgets are constraining and limiting.
D) In preparing a budget, information flows occur only from the bottom up.

Question

Quizplus · Accepted Answer

Studies have shown that employees often perceive budgets as limiting and constraining. Option A is incorrect because participative budgeting involves lower and higher-level employees working together. Option B is incorrect because upper-level management has a significant impact on the effectiveness of a company's budget - they set the tone and priorities for the entire organization. Option D is incorrect because information flows can occur both from the bottom up and from the top down when preparing a budget.

Which of the Following Statements Is True