Chapter 12 Review Questions

Which type of budget is an estimate of the actual money received and paid out for a specific period?

A cash budget

Employers must make matching contributions to...

FICA (Social Security and Medicare) taxes

The final step in the financial decision-making process is to...

Make needed adjustments to the budget

This shows how much profit is being made by each dollar of sales for the period being analyzed.

Net Income Ratio

An operating budget is usually planned for...

Operating budgets are commonly prepared for all of the above time frames

The first step of the budgeting process is to...

Prepare a list of each type of income and expense that will be part of the budget

An income statement usually covers...

Six months or a year

All of the following are private businesses that collect and publish financial information on similar businesses and industries EXCEPT...

The National Federation of Independent Business

For long-established businesses, the main source of budget information is...

The business's financial records

Which of the following is NOT generally a goal of a business budget?

To convince employees to take a big pay cut so the business can avoid bankruptcy