Answer True or False for questions 1-20 1 The basic idea underlying responsibility accounting is that a manager should be held responsible for those items and only those items that the manager can actually control to a significant extent. 2. The budgeted income statement is typically prepared before the budgeted balance sheet. 3. Control involves developing goals and preparing various budgets to achieve those goals. 4. A continuous or perpetual budget is a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed. 5. The cash budget is the starting point in preparing the master budget. 6. One of the weaknesses of budgets is that they are of little value in uncovering potential bottlenecks. 7. If activity is higher than expected, total fixed costs should be higher than expected. If activity is lower than expected, total fixed costs should be lower than expected. 8. Comparing a static planning budget to actual costs is not a good way to assess whether variable costs are under control. 9. In a flexible budget, when the activity declines, the total variable cost also declines. 10. The main difference between a flexible budget and a static budget is that the static budget is not adjusted for changes in level of activity. 11. To help assess how well a manager has controlled costs, actual costs should be compared to what the costs should have been for the actual level of activity