Question 2

Budgets should be developed only for large companies.

True or False

The development of the master budget should include representation for all pertinent departments in the company. True or False

A budget represents companywide plans stated in narrative terms as to how to coordinate operating activities to accomplish goals and objectives. True or False

Which of the following is not a level of planning?

		Strategic planning
		Capital budgeting
		Operations budgeting
		All of the above

6. Capital budgeting involves the long-run planning activities that address issues related to the companys goals and objectives. True or False

Question 7

Operations budgeting involves the intermediate financial planning activities of the company. True or False

Question 8

Strategic planning involves the short-run financial planning of the company that culminates in the formation of the master budget. True or False

Question 9

Which of the following is not an advantage of a perpetual budge?

		It keeps management involved in the budget process
		It forces management to maintain a constant focus on the companys goals and objectives.
		Both a and b are correct
		a is correct but not b

Question 10

Which of the following is an advantage of budgeting?

		Planning
		Coordination
		Performance measurement
		All of the above

Question 11

Which of the following is not an advantage of budgeting?

		Corrective action
		Coordination
		Mentoring
		Performance measurement

Question 12

Performance measurement represents specific, quantitative standards that can be used to evaluate performance. True or False

Question 13

Coordination forces departments to coordinate their activities in a manner that ensures that the companys goals are attained. True or False

Question 14

Budgeted amounts represents managements expectations about how the company as a whole and individuals departments should perform. True or False

Question 15

By comparing budgeted amounts to expected performance mangers cannot be effectively evaluated. True or False

Question 16

A master budget consists of a series of detailed schedules and budgets that describe the overall financial plans for the upcoming accounting period. True or False

Question 17

The production budget is the starting point for the development of the master budget. True or False

Question 18

The pro forma income statement provides information about the expected profitability of the company. True or False

Question 19

The completion of the pro forma income statement is dependent on the departmental operating budget True or False

Question 20

The cash budget provides information about the expected cash receipts and cash payments. True or False