Question

Because people prepare budgets, budget figures are often biased. Which of the following is true?

a. When senior management sets budget numbers, a more realistic budget can be developed

b. Sales quantity forecasts tend to be exaggerated (over-estimated) to make the sales team look good

c. None of the answers are correct

d. Production cost estimates tend to be overstated to create wiggle room (budgetary slack) e. Efficient organizations begin their budget process with last year's budget, and adjust the figures by a certain percentage

QUESTION 5

Budget variances occur when:

	a.	None of the answers are correct
	b.	actual revenues do not match budgeted revenues exactly
	c.	actual expenses do not natch budgeted expenses exactly
	d.	both actual expenses do not match budgeted expenses exactly and/or actual revenues do not match budgeted revenues exactly

2.00000 points   

QUESTION 6

Are budgets part of the performance measurement system or the performance reward system?

	a.	Part of neither the performance measurement system nor the performance reward system
	b.	Part of the performance measurement system only
	c.	Part of both the performance measurement system and the performance reward system
	d.	Part of the performance reward system only

2.00000 points   

QUESTION 7

Below are some budgeting techniques which are used rarely (or more often) by government agencies and corporations. Which answer is true?

	a.	Budget lapsing is often used by corporations and often used by government agencies
	b.	Zero-based budgeting is rarely used by corporations and often used by government agencies
	c.	Flexible budgeting is rarely used by corporations and often used by government agencies
	d.	Encumbrance accounting is often used by corporations and rarely used by government agencies

2.00000 points   

QUESTION 8

What is the correct answer regarding short-run and long-run budgets?

	a.	None of the answers are correct
	b.	A long-run budget projects from two (2) to 10 years into the future
	c.	A short-run budget is generally less than a year in length and often tied to a particular project
	d.	A long-run budget is generally one year in length and often tied to a particular department or division

2.00000 points   

QUESTION 9

Which of the following is true regarding how budgets are developed?

	a.	Budgets require basic estimating factors
	b.	Effective planning of budgets require input from numerous individuals in the firm
	c.	All of the answers are correct
	d.	Budgets are developed using key planning assumptions

Answer 1

1. Option e:

Reason: efficient organisations prepare flexible budgets to mitigate budget variances based on previous budgets and trend analysis,,

5. Option d

Reason: budget variances arise when the budgeted expenses or revenue differ from actual expenses or revenue.

6. Option : C

Budgets are part of both performance measurement system and performance reward system.

7. Option B. Zero based budgeting is rarely used by corporations and often by governmental organization.

8. Grammatically option a:

Reason,, short run budget are for short period up to 1 year but in option C it is less then 1 year is given so wrong

Where as long term budgets are for long periods without any specific description of time periods commencing from 1st year and they cover only specific areas such as sales forecast etc.

9. Option C: all are correct

Reason: basic features and steps in budgeting.