Which of the following is a primary benefit of budgeting?

• A. It removes the need for management oversight.
• B. It guarantees profits for the organization.
• C. It helps organizations plan for future financial needs.
• D. It eliminates the need for financial statements.

Answer: (C)

Verified step by step guidance

1. Understand the concept of budgeting: Budgeting is a financial planning tool that helps organizations allocate resources, set goals, and anticipate future financial needs.
2. Evaluate the options provided in the question: Analyze each statement to determine its validity and relevance to the primary benefit of budgeting.
3. Option 1: 'It removes the need for management oversight.' This is incorrect because budgeting does not eliminate the need for management oversight; it complements it by providing a framework for decision-making.
4. Option 2: 'It guarantees profits for the organization.' This is incorrect because budgeting does not guarantee profits; it helps in planning and managing resources effectively to achieve financial goals.
5. Option 3: 'It helps organizations plan for future financial needs.' This is correct because the primary benefit of budgeting is to assist organizations in forecasting and preparing for future financial requirements, ensuring better financial management.