Chapter 7

Which of the following statements is not correct?

The direct materials budget begins with the sales estimated for each period.

Which of the following is a finance budget?

cash budget

The cash budget is part of which category of budgets?

finance budget

Which budget evaluates the results of operations at the actual level of activity?

flexible budget

Which of the following is not a part of budgeting?

preventing net operating losses

The direct materials budget is prepared using which budget's information?

production budget

Which budget is the starting point in preparing financial budgets?

the budgeted income statement

The most common budget is prepared for a ________.

year

Which approach requires management to justify all its expenditures?

zero-based budgeting