DECA Business Management and Administration Exam Practice – Complete Prep Guide

Question: 1 / 400

What is one primary reason for establishing a budget in a business?

To increase employee workload

To ensure consistent marketing

To control and monitor financial resources

Establishing a budget in a business is fundamental for controlling and monitoring financial resources. A budget serves as a financial plan that outlines expected revenues and expenses over a specific period. This allows businesses to allocate funds wisely, ensuring that resources are used effectively to meet operational goals and strategic objectives.

By having a budget in place, a business can keep track of its financial performance, compare actual results against budgeted amounts, and make informed decisions about spending and investments. This can help in identifying areas where cost reduction is possible or where additional funding may be needed. Hence, the primary objective of establishing a budget is to maintain financial health and stability by guiding financial decisions and ensuring that the organization remains on track to achieve its financial goals.

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To enhance product offerings

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