1. The master budget for a given accounting period has all of the following except:
2. “Budgetary slack” occurs when:
3. A master budget is typically prepared for:
4. The successful use of a budgeting system generally involves all of the following except:
5. All of the following are ways of setting the budget, except:
6. Revision of a completed and approved budget:
7. The process of planning business actions in the near future and expressing them as
formal plans of action is called:
8. A plan of dollar amounts to be spent on long-term projects is called a:
9. A plan that shows the cash balance on hand at the beginning of a budget period,
expected cash flow from operations, cash flows from investing activities, cash flows from
financing activities, and an ending cash balance is called a(n):
10. A comprehensive or overall formal plan for a business that includes specific plans for
expected sales, the units of product to be produced, the merchandise (or materials) to be
purchased, the manufacturing, selling, administrative, and general expense to be incurred, the
long-term assets to be purchased, and the amounts of cash to be borrowed or loans to be repaid,
as well as a budgeted income statement and balance sheet, is called a(n):
11. A plan that states the units or cost of merchandise to be purchased by a retailer or
wholesaler during the budget period is called a:
12. A plan showing the units of goods expected to be sold and the expected revenue from
sales is called the:
13. The practice of maintaining budgets for the same number of future periods, revising
those budgets as each period is completed and adding a new budget each period, is called:
14. An accounting statement that presents predicted amounts of the company’s assets,
liabilities, and stockholders’ equity as of the end of the budget period is called a(n):
15. Which of the following budgets is not a financial budget?
16. Which of the following is not a potential benefit of having a sound budgeting process?
17. Which of the following budgets must be completed before preparing a cash budget?
18. Which of the following statements about budgeting is not true?
19. Which of the following factors is least likely to be considered in preparing a sales
budget?
20. A sales forecast is the first step in the budgeting process of a merchandising firm
because:
21. Sales forecasting by its nature is:
22. Budgeting for production (i.e., units to be produced in an upcoming budget period):
23. Maintaining a constant production level in a firm has the advantage of:
24. The budgeted income statement and budgeted balance sheet benefit a business primarily
in terms of the ability of the organization to:
25. The focal point in budgeting for a service organization is likely to be:
26. Which of the following is not an alternative approach to traditional budgeting practices?
27. Zero-base budgeting (ZBB) differs from traditional budgeting in terms of its requirement
to:
28. A “participative” budget is a(n):
29. Unless properly controlled, a “bottom-up” budgeting process can lead to:
30. Budgeting provides all of the following except:
31. Financial budgets include the:
32. The effect of increasing the targeted (i.e., desired) ending inventory for a given budget
period has the following effect on the production budget for the period:
33. The authorization function of budgets is especially important for government and not–for–
profit (NFP) entities, where budgeted amounts often serve both as approvals of planned
activities (or programs) and as:
34. Which one of the following is a plan that will allow a manufacturing firm to satisfy its
sales goals and have on hand the desired amount of inventory at the end of the budget period?
35. Which one of the following shows the raw materials required for production and their
budgeted cost?
36. Which of the following is not an advantage of using a “highly achievable target” when
constructing budgets?
37. A negotiated budgeting process is:
38. The cash budget does not include:
39. Which one of the following is a budgeting process that requires managers to prepare
budgets based on in-depth reviews of all budget items?
40. Which one of the following is a budgeting approach that explicitly demands continuous
improvement and that incorporates expected improvements in the resultant budget?