Question

Which of the following is not an advantage of budgeting? a.It forces managers to plan. b.It provides information for decision making. c.It guarantees an improvement in organizational efficiency. d.It provides a standard for performance evaluation. e.It improves communication and coordination.

Answer 1

Answer:

c. It guarantees an improvement in organizational efficiency.

Explanation:

The budget does not guarantees an organizational efficiency. It should be efficiently utilized to make more out of it for organizational efficiency.  

Answer 2

Answer:

C) It guarantees an improvement in organizational efficiency.

Explanation:

A budget is simply an estimate that might serve as a guideline but by itself it cannot guarantee anything. That is why budget variances exist, both favorable and unfavorable. They are a useful tool to check the department's performance and efficiency, but even super efficient departments might not follow the budget (maybe they have a favorable variance which is good).

That is why the definition of a budget is simply an estimate or educated guess if you prefer.