Question

For each of the following items 1 through 5, indicate yes if the item is an important budgeting guideline or no if it is not.

1. Employees should have the opportunity to explain differences from budgeted amounts.

2. Budgets should include budgetary slack.

3. Employees impacted by a budget should be consulted when it is prepared.

4. Goals in a budget should be set low so targets can be reached.

5. Budgetary goals should be attainable.

Short answer

Following will be the answer of each subpart given in the question

1. Yes
2. No
3. Yes
4. No
5. Yes

Step-by-step solution

Introduction

Budgeting guidelines are those rules and regulations defined under the budget management system that needs to be strictly followed by each organization while preparing the budgeting schedules.

Step 2:Reason

1. The employees of an organization working towards a specific task should have the opportunity to explain and accumulate the differentiation in the amount of actual and budgeted value. It leads to efficiency in the employee management system.
2. Budgetary slack is not required to be included while making a budget since it leads to underestimating or overestimating the organization’s future revenue.
3. It is crucial to consult the employees working in an organization that may be affected due to the budgetary decisions of an organization.
4. The goals or objectives of an organization should be prepared according to the capability and growth rate of the organization. It encourages them to reach the desired level in the future.
5. The budgetary goals and objectives should be accurate and attainable by the organization.