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Which is the MOST important criterion in budgeting?

  • A. Flexibility
  • B. Consistency
  • C. Standardized
  • D. Cost of effectiveness
Correct Answer: A

Rationale: Flexibility is the most important criterion in budgeting because it allows for adjustments to be made as circumstances change. Budgeting is a dynamic process, and having a flexible budget enables organizations or individuals to adapt to unexpected changes in income or expenses. This helps in ensuring that resources are allocated efficiently and effectively to meet the overall financial goals. Consistency, standardization, and cost-effectiveness are also important considerations in budgeting, but flexibility is key to successfully managing financial resources in a changing environment.