In preparing and using any budget, it is important that managers keep in mind the
A) assumptions and predictions upon which the budget is based.
B) present value of future cash flow.
C) budgeted profit and loss statement.
D) 'bottom line'.

Question

Quizplus · Accepted Answer

Managers need to be aware of the assumptions and predictions upon which the budget is based because any changes to these factors can greatly impact the actual results compared to the budgeted projections. This allows managers to make adjustments and better understand the reasons for any variances between the budget and actual results. The other options (B, C, and D) are also important considerations in budgeting, but understanding the assumptions and predictions is crucial to making an accurate and effective budget.

In Preparing and Using Any Budget, It Is Important That