Which of the following describes imposed budgeting?

• A. Budgets prepared with high involvement of budget holders
• B. Budgets set by senior managers without involvement of budget holders
• C. Budgets created by outside auditors
• D. Budgets set by customer requirements

Answer: (B)

Imposed budgeting is a top-down approach where senior managers set the budget targets with little or no input from those who must achieve them. This ensures alignment with overall strategy and can speed up the budgeting process, but it may reduce buy-in and motivation among lower-level managers. The described scenario fits because the budget is determined by senior managers without the involvement of budget holders. It contrasts with participative budgeting, where budget holders contribute to targets, and with budgets driven by external auditors or customer requirements, which involve different sources of input.