ACC 561 Week 5 Quiz
1. Why are budgets useful in the planning process?
• They enable the budget committee to earn their paycheck.
• They provide management with information about the company's past performance.
• They help communicate goals and provide a basis for evaluation.
• They guarantee the company will be profitable if it meets its objectives.
2. A common starting point in the budgeting process is
• a clean slate, with no expectations.
• expected future net income.
• past performance.
• to motivate the sales force.
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3. Which of the following statements about budget acceptance in an organization is true?
• The most widely accepted budget by the organization is the one prepared by top management.
• Budgets are hardly ever accepted by anyone except top management.
• The most widely accepted budget by the organization is the one prepared by the department heads.
• Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process.
4. What is budgetary control?
• The process of providing information on budget differences to lower level managers
• Another name for a flexible budget
• The degree to which the CFO controls the budget
• The use of budgets in controlling operations
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5. The comparison of differences between actual and planned results
• is done by the external auditors.
• appears on the company's external financial statements.
• is usually done orally in departmental meetings.
• appears on periodic budget reports.
6. A static budget
• should not be prepared in a company.
• is useful in evaluating a manager's performance by comparing actual variable costs and planned variable costs.
• shows planned results at the original budgeted activity level.
• is changed only if the actual level of activity is different than originally budgeted....