Question

Which of the following is NOT an objective of the budgeting process?:

A. To communicate management's plans throughout the entire organization.
B. To provide a means of allocating resources to those parts of the organization where they can be used most effectively.
C. To ensure that the executives of the firm are adequately compensated.
D. To coordinate all of the activities of the company in order to achieve the firm's objectives

Answer 1

The correct answer is C. To ensure that the executives of the firm are adequately compensated.

Step-by-step explanation:

The correct answer is C. To ensure that the executives of the firm are adequately compensated.

The budgeting process has several objectives, including:

1. To communicate management's plans throughout the entire organization.
2. To provide a means of allocating resources to those parts of the organization where they can be used most effectively.
3. To coordinate all of the activities of the company in order to achieve the firm's objectives.

Option C, to ensure that the executives of the firm are adequately compensated, is not an objective of the budgeting process. While employee compensation is typically considered when creating a budget, the objective of budgeting is not specifically focused on executive compensation.