Accounting Chapter 22

an operational budget is a short-term financial plan that coordinates activities needed to achieve short-term goals

true

the financial budgets include the cash budget and the budgeted financial statements- the budgeted income statement and budgeted balance sheet

true

after comparing budgets with the actual results, the feedback allows managers to determine what, if any, corrective action should be taken

True

budgeting requires managers to develop overall business goals and budget for specific actions to achieve the goals

True

which of the following is an example of the benchmarking function of the budgeting process?

budget numbers are used to evaluate the performance of managers

an intentional understatement of expected revenues or overstatement of expected expenses by managers in order to have a favorable performance evaluation is known as ____________

budgetary slack

The budget process is a loop that consists of

developing strategies, planning, acting, and controlling

A strategic budget will be as detailed as an operational budget

false

a master budget is a financial plan for a specific segment of an organization

false

developing a budget reduces coordination and communication at different levels in an organization

false

the cash budget and the budgeted financial statements are collectively known as the

financial budget

which of the following statements regarding capital expenditures incorrect?

installment payments related to the purchase of short term assets are included in the capital expenditures budget

which of the following statements is true about the budgeting process?

it is a continuous process that encourages communication

which of the following is true about the sales budget?

it is used in the production budget

which of the following describes the production budget?

it provides the quantity of of finished goods to be produced during a budget period

the starting point in developing the master budget is the preparation of the

sales budget

which of the following statements regarding capital expenditures budget is correct?

the decision to purchase long-term assets is part of a strategic plan

for manufacturing companies, the primary source of cash is for its customers

true

if the amount of indirect materials needed for production is deemed to be insignificant, it should not be included in the direct materials budget

true

the production budget determines the number of units to be produced during the period

true