EXAM 3 REVIEW - TTU ACCT 2301

Master Budget

financial plan of action consisting of interrelated budgets (operating and financial)

Which of the following budgets is the comprehensive planning document for the entire organization?

Master Budget

Which of the following is/are examples of KPIs?

-Average customer satisfaction ratings -Number of repeat customers -Sales revenue growth

What does a linear trend line indicate?

A strong correlation between X and Y

Which of the following is not a responsibility center?

Customer centers

Purpose of slack

Managers build slack to gain resources they need in an event of budget cuts

What do most companies use when lower level management budgets each year?

Participative budgeting

Which type for budgeting involves the participation of many levels of management?

Participative budgeting

Benefits of a budget

Planning, evaluation, motivation

Which of the following would NOT be prepared by a service company?

Production budget

Variance

The difference between actual and budgeted figures (revenues and expenses)

Which of the following is NOT a strategy for determining the transfer price of a product?

Related party discounted price

Which of the following would appear on both the budgeted income statement and the cash budget?

Rent expense

Which of the following is a performance measure commonly used to assess the performance of investment centers?

Return on investment

Which budget is the cornerstone of the master budget?

Sales budget

Which of the following is true regarding the ABS function?

The order of the cells referenced in the formula do not matter.

Which of the following is NOT true of the budgeting process?

The performance report is prepared as part of the master budget

Which of the following is not an advantage of decentralization?

To allow goal congruence to be achieved more easily

Flexible budget

a budget prepared for various levels of sales volume

Operating Budget

concerned with income-generating activities

Financial Budgets

concerned with the inflows and outflows of cash and with financial position

Employee capabilities, information system capabilities, and the company's "climate for action" are important factors of the

learning and growth perspective

Usually, the first step in the budgeting process is the preparation of:

the sales budget

The differences between actual and budgeted figures are known as

variances