Answer (C) is correct . Among other things, the budget is a tool by which management can communicate goals to lower-level employees. It is also a tool for motivating employees to reach those goals. For the budget to function in these communication and motivating roles, top management must be involved in the process. This involvement does not extend to dictating the exact numerical contents of the budget since top management lacks a detailed knowledge of daily operations.
Answer (A) is incorrect because Top managers can use the budget for motivational and communication purposes; they should do more than merely sign off on the finished document.
Answer (B) is incorrect because Top managers should be involved in the budget process even though they lack detailed knowledge of daily operations; the budget can still communicate company objectives and goals.
Answer (D) is incorrect because The budget process is a part of the overall planning process.
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