Question

Which of the following groups are most likely to use a​ company's budget​ information?

A.

Suppliers

B.

Managers

C.

Creditors

D.

Customers

Answer 1

B. Managers

The main purpose of creating budgetary financial statements is to anticipate the costs and profits for the future period. It is created to help the users ensure whether resources have been efficiently put-to-use and are performing well. They also help the users to identify the problem area and the reasons for material departures of performance. The budgetary financial statements also help in formulating effective decisions

Therefore, as the purpose of the budgetary financial statements is basically for decision making and identifying the costs and performance of the company, the managers are most likely to use the budgetary information because it will assist them to identify that the performance conforms to the plan and help them to make relevant decisions to improve the performance of the company. Managers are the decision-makers of the company.

After the managers, the creditors and suppliers are likely to use the budgetary information as the creditors will try to ensure the security of their funds by observing the anticipated figures.

The customers may use the budgetary information, if they are seeking to buy a product and are making payment in advance, they use the budgetary information to ensure the safety of their funds and to anticipate whether the company will be able to deliver the product within the required time and of desired quality and price.

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