Question : 11.Which of the following not a benefit of budgeting? A. Provides assurance : 1257175

 

 

11.Which of the following is not a benefit of budgeting?   

A. Provides assurance that accounting records are in accordance with generally accepted accounting principles

 

B. Coordinates the activities of the company by integrating the plans of all departments

 

C. Requires managers to plan ahead and to formalize their objectives

 

D. Sets realistic standards that serve as benchmarks for evaluating performance

 

 

12.One of the tasks that managers at Omaha Company have to complete during the budgeting process is to develop a contingency plan for their organization in case a downturn occurs in their business. This budgeting requirement is an example of:   

A. performance measurement.

 

B. planning.

 

C. budget coordination.

 

D. taking corrective action.

 

 

13.When Vanguard Company district managers submitted their preliminary budget proposals, top management discovered that the southern district manager had requested a new project management information system. Unfortunately, the system is incompatible with the system used at headquarters. Which of the following advantages of budgeting reduces the likelihood that the company will end up with two incompatible systems?   

A. Planning

 

B. Coordination

 

C. Performance measurement

 

D. Corrective measures

 

 

14.One company’s practice is to provide bonuses to salespeople who exceed their sales targets. Which of the following advantages of budgeting enabled the company to establish its recognition program?   

A. Planning

 

B. Coordination

 

C. Performance measurement

 

D. Corrective action

 

 

15.Jason had been operating his machine for an entire month before he realized that it was generating more scrap than usual. Which advantage of budgeting would have helped him identify this problem sooner?   

A. Performance measurement

 

B. Coordination

 

C. Planning

 

D. Corrective action

 

 

16.Which of the following would represent the order in which most master budgets are prepared?   

A. Sales, Income Statement, Cash, Purchases

 

B. Purchases, Cash, Sales, Income Statement

 

C. Purchases, Sales, Cash, Income Statement

 

D. Sales, Purchases, Cash, Income Statement

 

 

17.Which of the following budgets would be prepared by a manufacturing company but not a merchandising company?   

A. Selling and administrative expense budget

 

B. Cost of goods sold budget

 

C. Sales budget

 

D. Raw materials budget

 

 

18.Which of the following budgets needs to be prepared prior to preparing a purchases budget?   

A. Selling and administrative expense budget

 

B. Sales budget

 

C. Cash budget

 

D. All of these answers are correct.

 

 

19.Select the correct statement.   

A. Four purposes often claimed for budgeting involve planning, coordination, performance measurement, and reporting.

 

B. In a participative budgeting system, budget information flows in one direction only, from bottom to top.

 

C. The three major categories of the master budget are operating budgets, capital budgets, and pro forma financial statements.

 

D. The accounting department normally coordinates the development of the sales forecast.

 

 

20.Select the correct statement about budgeting and human behavior.   

A. People are usually very comfortable with budgets.

 

B. The attitudes of upper managers significantly impact budget effectiveness.

 

C. Budgets increase individual freedom within an organization.

 

D. Participative budgeting contributes to fear and resentment.