Which of the following statements is true? I. To provide a basis for comparison of actual performance is one primary purpose of budgeting. II. Ineffective budgets and/or control systems are characterized by the use of budgets as a planning tool only and disregarding them for control purposes III. For better management acceptance, the flow of data to be used for budgeting should begin with Lower levels of management IV. Actual results need not be compared with plan, since the process ends after budget is approved. a. I and II b. II and III c. III and IV d. None of the above

Which of the following statements is true? I. To provide a basis for comparison of actual performance is one primary purpose of budgeting. II. Ineffective budgets and/or control systems are characterized by the use of budgets as a planning tool only and disregarding them for control purposes III. For better management acceptance, the flow of data to be used for budgeting should begin with Lower levels of management IV. Actual results need not be compared with plan, since the process ends after budget is approved. a. I and II b. II and III c. III and IV d. None of the above

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 1MC: Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing...

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Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating losses
Which of the following statements is true? I. To provide a basis for comparison of actual performance is one primary purpose of budgeting. II. Ineffective budgets and/or control systems are characterized by the use of budgets as a planning tool only and disregarding them for control purposes III. For better management acceptance, the flow of data to be used for budgeting should begin with Lower levels of management IV. Actual results need not be compared with plan, since the process ends after budget is approved.
Which of the following statements about budgeting is incorrect? a. Budgets provide direction and coordination b. Budgets motivate staff c. A budget is a financial plan. d. A budget looks back and review performance.
Which of the following is true of budgeting? a.Budgeting relies on the control cycle to design the planning cycle for future action. b.Budgeting eradicates the need for keeping a buffer against uncertainties in demand. c.Budgeting focuses only on long-term objectives as covered by the planning cycle. d.Budgeting forces management to plan for the future. e.Budgeting creates a plan of action only in terms of production units.
1. Budgets are related to the following management fuctions, except Performance evaluation Planning None of the choices above/below Controlling
The primary benefits of budgeting include all of the following except it Select one: O a. provides definite objectives for evaluating performance. O b. requires only top management to plan ahead and formalize their future goals. C. creates an early warning system for potential problems. O d. motivates personnel throughout the organizatiorm O e. None of the answers are correct
indicate yes if it describes a potential benefit of budgeting orno if it describes a potential negative outcome of budgeting. Budgets are useful in assigning blame for unexpected results.
Briefly describe the type od human behavior problems that might arise if budget goals are set too tightly
Which of the following statements is false? (You may select more than one answer.)a. A flexible budget is used for control purposes and a static budget is used for planning purposes.b. A flexible budget is prepared at the end of the period and a static budget is prepared at the beginning of the period.c. A flexible budget is not useful for controlling variable costs.d. A static budget provides budgeted estimates for one level of activity.
indicate yes if it describes a potential benefit of budgeting orno if it describes a potential negative outcome of budgeting. Budgets help coordinate activities across departments.
Which of the following statements is incorrect concerning budget preparation? A. The rolling budget approach is not often used in practice because it requires that management be in perpetual budgeting mode. B. If a zero-based budgeting approach is used, the annual budgeting process begins with a review of the results of the prior operating period. C. If a participative approach is used to prepare budgets, all levels of management are involved in the budgeting process. D. The preparation of the sales budget is the starting point in the budgeting process for all companies. E. Participative budgeting increases the risk that employees will create budgetary slack.
Sometime the budgetary performance is seems to be a misleading and less effective if it is consider as a standard. Can you justify? Give an example where needed