19. Which of the following is false? (a) A budget is a financial plan for a period of time. (b) Budgeting and responsibility accounting are closely related. (c) Goal congruence means that managers of different departments often have competing objectives. (d) The budgeting process should have a significantly positive effect on a company's profit as compared with no budgeting at all.

19. Which of the following is false? (a) A budget is a financial plan for a period of time. (b) Budgeting and responsibility accounting are closely related. (c) Goal congruence means that managers of different departments often have competing objectives. (d) The budgeting process should have a significantly positive effect on a company's profit as compared with no budgeting at all.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 1MC: Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing...

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Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating losses
Which of the following statements are TRUE? 1. Responsibility accounting attempts to assign blame for problems to a specific manager. 11. One benefit of a budget is that it helps managers gather relevant information for improving future performance. III. Challenging budgets tend to motivate improved performance. IV. Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager. a) I, III, and IV are true. b) I and IV are true c) II, III, and IV aregrue. d) All statements are true
Which of the following statements are TRUE? I. Responsibility accounting attempts to assign blame for problems to a specific manager.II. One benefit of a budget is that it helps managers gather relevant information for improving future performance.III. Challenging budgets tend to motivate improved performance.IV. Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager.
5. Which of the following is not a benefit of budgeting? A. It sets some standards to evaluate performance. B. It uncovers drawbacks of department performance C. It reduces the need to track the actual cost activity. D. It formalizes a manager's planning efforts.
Which of the following is not a benefit of budgeting? It allows for coordination between different departments within a firm. It compels managers to develop objectives and to plan allocating resources to achieve the objective. It provides performance evaluation and feedback. It reduces the need for analysis with regard to company expenses.
With one exception, the following objectives are accomplished by budgeting. Which of these statements is NOT true about budgeting objectives? Shows management's operating plans for the coming period. O Locks in company spending for the period. O Forces all levels of management to think ahead, anticipate results, and take action to remedy poor results. O Formalizes management's plans in quantitative terms.
1 i. Discuss the factors that are likely to cause managers to submit budget estimates of sales and costs that do not represent their best estimate or expectations of what will actually occur. ii. Suggest, as a budget accountant, what procedures you would advise in order to minimize the likelihood of such biased estimate arising.
Which of the following is true of a budget? O A. Budgets help managers to revise their plans and strategies. B. Budgets do not account for nonfinancial aspects of the upcoming period. C. Budgets are used to express only the operational plans and not the strategic plans of a company. D. Budgets are most useful when they are planned independent of the company's strategic plans.
Which of the following is not an advantage of participative budgeting?a. It encourages budgetary slack.b. It tends to lead to a higher level of performance.c. It fosters a sense of responsibility.d. It encourages greater goal congruence.e. It fosters a sense of creativity in managers.
Which of the following statements is false? Select one: a. According to responsibility accounting, all managers should be held responsible for all asbects of the master budget. o b. Budgets helps uncover potential bottlenecks. c. Budgeting forces managers to think about and plan for the future. o d. One benefit of following a well-designed budgeting process is Improved performance evaluations. e. Budgeted cash collections typically consist of collections on sales made to customers in prior periods plus collections on sales made in the current budget period. Which of the following activities would be classified as a batch-level activity? Select one: a. none of the given answer. b. Designing a new product. c. Milling a part required for the final product. d. Setting up equipment. e. Training employees.
Which of the following is not an accepted principle of effective budgeting? A• Flexibility B• Top management support C• Communication of results D• Responsibility accounting
Which of the following statements relating to budgeting is NOT true? a) A budget is a formal document that quantifies a company’s plans for achieving its goals. b) Budgets are useful in the control process because they provide a basis for evaluating performance. c) A bottom-up approach to budgeting involves substantial input from lower level managers. d) Most managers believe that budgeting is more successful when a top-down approach rather than a bottom-up approach is used.