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      Question

      In the context of budgeting, 'Top-down Budgeting' refers to a process where:

      A Budgets are prepared by lower-level management. Correct Answer Incorrect Answer
      B Budgets are prepared by the finance department only. Correct Answer Incorrect Answer
      C Senior management sets the budget targets which are then imposed on lower levels. Correct Answer Incorrect Answer
      D Budgets are prepared collaboratively by all departments. Correct Answer Incorrect Answer

      Solution

      Top-down budgeting is an authoritative approach where the budget is prepared by upper management with little or no input from lower-level managers. The budget targets are then communicated down the hierarchy for implementation.

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