ACCT285 Practice Exam 3, KEY with work shown (1)

Which of the following is NOT true of the budgeting process?   Question 8 options:   Budgeting provides feedback to management to aid in assessing how well it's reaching its goals.   Budgets force managers to plan for the future.   Budgets force managers to consider relations among operations across the entire value chain.   The performance report is prepared as part of the master budget.

Which of the following is not an accepted principle of effective budgeting?   A• Flexibility B• Top management support C• Communication of results D• Responsibility accounting

(3) Explain the ethical considerations as it relates to using budgets as a basis for rewarding managers? (4)Explain three specific benefits that a system of budgetary planning and control may bring to an organization.

18 Which of the following is not the direct benefit of the budgeting process?   Identification of potential bottlenecks or constraints.   Goal congruence between the personal goals of managers and the goals of the organization.   Payments and completion of taxes    Communication throughout the organization.

Which of the following statements are TRUE? 1. Responsibility accounting attempts to assign blame for problems to a specific manager. 11. One benefit of a budget is that it helps managers gather relevant information for improving future performance. III. Challenging budgets tend to motivate improved performance. IV. Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager. a) I, III, and IV are true. b) I and IV are true c) II, III, and IV aregrue. d) All statements are true

b) ‘Budgeting has a number of different purposes including: Planning; Control; Performance evaluation; Motivation. Some managers believe that zero-based budget is more beneficial than other types of the budget for firms.’ Required: Critically discuss the above statement with reference to academic literature. In your discussion, you should refer to the budgeting systems you learned in this module.

1.  Budgeting involves ________. establishing specific goals executing plans to achieve the goals periodically comparing actual results with the goals All of these choices are correct.     2.  Budgeting affects all of the following managerial functions except ________. planning directing controlling None of these choices are correct.

A) Enter True or False    1.   ________   An important part of the planning process is the creation of a budget.   2.   ________   Operating budgets focus on the financial resources needed to support operations including cash receipts and disbursements, capital expenditures and financing.   3.   ________   Budgets can also create a “use-it-or-lose-it” mentality that encourages managers to spend their entire budgets to avoid a reduction in resources in the next budget period.   4.   ________   The starting point of the planning process is management’s strategic plan or vision of what they want the organization to achieve over the long term.   5.   ________   A short-term objective is a specific goal that managers want to achieve in more than a year to reach their long-term goals.   6.   ________   Planning is the forward-looking phase of the planning and control process that involves setting long-term objectives and defining short-term…

Which among the following is not an element of budgeting? a. Budgeting should state the firm’s expectations clearly b. The targets fixed should be very high in budgeting. c. Good system of accounting is essential. d. The authority and responsibility should be clearly fixed.

A budget is a financial plan for an organization, prepared in advance. * True false 2 One of the advantages of budgeting is that it allows to communicate ideas and plans * True false

1. Explain the concept of responsibility accounting and its relation with budgeting.2. Explain how the choice of the type of responsibility center (cost, revenue, profit, orinvestment) affects behavior.3. Discuss the concept of “budgetary slack”

1. The organizational process of budgeting performs several important functions. Which is true? A. Assigns decision rights B. Shares knowiedge C. Measures performance D. All of the choices are correct

how can I apply MIS ( management information system ) successfully in this topic: A PERSONAL BUDGETING/EXPENDITURE SYSTEM (TRACKING OF EXPENSES AND INCOME, REPORTING DEFICITS)

1. Which of the following is an advantage of the budgeting process? a. It forces management to focus on the past and not be distracted by the day-to-day operations of the business. b. It can communicate to employees specific information about their past performance to determine their promotion prospects. c. It can communicate to employees specific information about their past performance to determine their promotion prospects. d. It can communicate to employees information about their performance expectations in the period ahead.   2. Which one of the following statements regarding changing inventory costing methods is true? a. A change in inventory methods can be justified if the change is made to better match profits with revenue b. Changing inventory costing methods violates comparability c. One place that the reader of an annual report would be able to identify that a company changed inventory costing methods is the statement of shareholders' equity d. Changing inventory costing…

1.Explain the advantages of encouraging employee participation in budget setting. 2.Explain why zero based budgeting might be a useful tool to employ to ensure that budgetary requirements are kept up to date

Which of the following statements are TRUE? I.   Responsibility accounting attempts to assign blame for problems to a specific manager.II.  One benefit of a budget is that it helps managers gather relevant information for improving future performance.III. Challenging budgets tend to motivate improved performance.IV.  Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager.

OUTLINE 2 ADVANTAGES THAT CAN BE DERIVED FROM PROPER BUDGETING PRACTICES WITHIN THE ORGANIZATION

1. Why is it important to have a fair, balance criteria in making budgeting model? 2. Why is it important to follow ethical provisions in making budgeting model?

The best that describes the top management's role in budgeting process is that top management 1. Should be involved only in the approval process 2. Lacks the detailed knowledge of the daily operations and should limit their involvement 3. Needs to be involved, including using the budget process to communicate goals 4. Needs to separate the budgeting process and business planning process into two separate processes O 1 O 2 3. O 4

Which one of the following best describes the role of top management in budgeting process? Top management Should be involved only in the approval process Lacks the detailed knowledge of the daily operations and should limit its involvement Needs to be involved, including using the budget process to communicate goals Needs to separate the budgeting process and the business planning process into two separate processes