Handout 8-2 (LO 1) Which of the following statements is (are) false? Operating budgets focus on the financial resources needed to support operations including cash receipts and disbursements, capital expenditures and financing. A participative approach is less likely to motivate people to work toward an organization's goal than a top-down approach. Participative budgeting allows employees throughout the organization to have input into the budget-setting process. One downside to participative budgeting is that managers may try to build a little extra cushion, or budget slack, into their budget. Budgets can also create a use-it-or-lose-it" mentality that encourages managers to spend their entire budgets to avoid a reduction in the next budget period