ch06tif-2 - CHAPTER 6: MASTER BUDGET AND RESPONSIBILITY...

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CHAPTER 6: MASTER BUDGET AND RESPONSIBILITY ACCOUNTING MULTIPLE CHOICE 47. Budgeting is used to help companies a. plan to better satisfy customers. b. anticipate potential problems. c. focus on opportunities. d. do all of the above. Answer : d 48. A master budget a. includes only financial aspects of a plan and excludes nonfinancial aspects. b. is an aid to coordinating what needs to be done to implement a plan. c. includes broad expectations and visionary results. d. should not be altered after it has been agreed upon. Answer : b 49. Operating decisions PRIMARILY deal with a. the use of scarce resources. b. how to obtain funds to acquire resources. c. acquiring equipment and buildings. d. satisfying stockholders. Answer : a 50. Financing decisions PRIMARILY deal with a. the use of scarce resources. b. how to obtain funds to acquire resources. c. acquiring equipment and buildings. d. preparing financial statements for stockholders. Answer : b Difficulty : 2 Objective : 1 51. Budgeting provides all of the following EXCEPT a. a means to communicate the organization's short-term goals to its members. b. support for the management functions of planning and coordination. c. a means to anticipate problems. d. an ethical framework for decision making. Answer : d Difficulty : 2 Objective : 1 52. If initial budgets prove unacceptable, planners achieve the MOST benefit from a. planning again in light of feedback and current conditions. b. deciding not to budget this year. c. accepting an unbalanced budget. d. using last year’s budget. Answer : a Difficulty : 2 Objective : 1 Chapter 6 Page 1
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53. Operating budgets and financial budgets a. combined form the master budget. b. are prepared before the master budget. c. are prepared after the master budget. d. have nothing to do with the master budget. Answer : a Difficulty : 1 Objective : 1 54. A good budgeting system forces managers to examine the business as they plan, so they can a. detect inaccurate historical records. b. set specific expectations against which actual results can be compared. c. complete the budgeting task on time. d. get promoted for doing a good job. Answer : b Difficulty : 2 Objective : 1 55. A budget should/can do all of the following EXCEPT a. be prepared by managers from different functional areas working independently of each other. b. be adjusted if new opportunities become available during the year. c. help management allocate limited resources. d. become the performance standard against which firms can compare the actual results. Answer : a Difficulty : 3 Objective : 2 56. A limitation of comparing a company’s performance against actual results of last year is that a. it includes adjustments for future conditions. b.
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ch06tif-2 - CHAPTER 6: MASTER BUDGET AND RESPONSIBILITY...

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