Which of the following is not a benefit of a careful and thorough budgeting process?
A)Budgeting increases management's awareness of the company's external economic environment.
B)Budgeted net income assures the company of operating profitably.
C)The budget may provide advance warning of pending problems.
D)Budgets provide a yardstick for evaluating future performance.

Question

Quizplus · Accepted Answer

A careful and thorough budgeting process has several benefits, including increasing management's awareness of the company's external economic environment, providing advance warning of pending problems, and providing a yardstick for evaluating future performance. However, budgeted net income does not assure the company of operating profitably. The budgeted net income is only an estimate and is subject to change based on actual results. Therefore, it is important to monitor actual results and adjust the budget as necessary to ensure profitability.

Which of the Following Is Not a Benefit of a Careful