ACC 350 Week 7 Quiz – Strayer
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Quiz 5 Chapter 6
Master Budget and Responsibility
Accounting
1)
Few
businesses plan to fail, but many of those that don't succeed have failed to
plan.
2)
The
master budget reflects the impact of operating decisions, but not financing
decisions.
3)
Budgeted
financial statements are also referred to as pro forma statements.
4)
Budgeting
includes only the financial aspects of the plan and not any nonfinancial
aspects such as the number of physical units manufactured.
5)
Budgeting
helps management anticipate and adjust for trouble spots in advance.
Answer:
6)
Budgets
can play both planning and control roles for management.
7)
Long-run
planning and short-run planning are best performed independently of each other.
8)
Operating
decisions deal with how to best use the limited resources of an
organization.
9)
Investing
decisions deal with how to obtain the funds to acquire resources.
10)
Budgeted
financial statements are called pro forma statements.
11)
After a
budget is agreed upon and finalized by the management team, the amounts should
not be changed for any reason.
12)
Even in
the face of changing conditions, attaining the original budget is
critical.
13)
Lower-level
managers will not actively participate in the budget process if they perceive
upper management does not believe in the process.
14)
A
four-quarter rolling budget encourages management to be thinking about the next
12 months.
15)
A rolling
budget is the same as a continuous budget.
16)
Research
has shown that challenging budgets (rather than budgets that can be easily
attained) are energizing and improve performance.
17)
The
revenue budget and the budgeted income statement are used to prepare the
budgeted balance sheet and the budgeted statement of cash flows.
18)
It is
best to compare this year's performance with last year's actual performance
rather than this year's budget.
19)
When
administered wisely, budgets promote communication and coordination among the
various subunits of the organization.
20)
Preparation
of the budgeted income statement is the final step in preparing the operating
budget.
21)
The
sales forecast should primarily be based on statistical analysis with secondary
input from sales managers and sales representatives.
22)
The
usual starting point in budgeting is to forecast net income.
23)
The
revenues budget should be based on the production budget.
24)
The
operating budget is that part of the master budget that includes the capital
expenditures budget, cash budget, budgeted balance sheet, and the budgeted
statement of cash flows.
25)
Since
fixed manufacturing overhead is fixed, it is not normally included in the
operating budget.
26)
The
manufacturing labor budget depends on wage rates, production methods, and
hiring plans.
27)
The
manufacturing labor budget depends on wage rates, production methods, and
hiring plans.
28)
If
inventoriable costs in the operating budget are going to be in accordance with
Generally Accepted Accounting Principles (GAAP), they include only variable
manufacturing costs.
29)
Activity-based
budgeting provides better decision-making information than budgeting based
solely on output-based cost drivers (units produced, units sold, or
revenues).
30)
Activity-based
costing analysis takes a long-run perspective and treats all activity costs as
variable costs.
31)
Activity-based
budgeting (ABB) focuses on the budgeting cost of activities necessary to
produce and sell products and services.
32)
Activity-based
budgeting would permit the use of multiple drivers and multiple cost pools in
the budgeting process.
33)
Activity-based
budgeting and kaizen budgeting are really equivalent in meaning.
34)
If
budgeted amounts change, the kaizen approach can be used to examine changes in
the budgeted results.
35)
Computer-based
financial planning models are mathematical statements of the interrelationships
among operating activities, financial activities, and other factors that affect
the budget.
36)
Most
computer-based financial planning models have difficulty incorporating
sensitivity (what-if) analysis.
37)
Sensitivity
analysis is a "what-if" technique that examines how a result will
change if the original prediction or assumptions change.
38)
If we
increase the selling price of our product, we should probably expect a decline
in the number of these products sold.
39)
If we
increase the selling price of our product, we can always expect an increase in
total revenue.
40)
Sensitivity
analysis incorporates continuous improvement into budgeted amounts.
41)
Companies
implementing kaizen budgeting believe that employees who actually do the job
have the best knowledge of how the job can be done better.
42)
The
Japanese use kaizen to mean financing alternatives.
43)
Kaizen
budgeting does not make sense for profit centers.
44)
Kaizen
budgeting encourages small incremental changes, rather than major
improvements.
45)
Kaizen
budgeting allows for budgeting of small incremental increases in costs each
budgeting period to allow for the effects of normal inflation.
46)
A
responsibility center is a part, segment, or subunit of an organization, whose
manager is accountable for a specified set of activities.
47)
Each
manager, regardless of level, is in charge of a responsibility center.
48)
In a
profit center, a manager is responsible for investments, revenues, and
costs.
49)
A
packaging department is MOST likely a profit center.
50)
Variances
between actual and budgeted amounts inform management about performance
relative to the budget.
51)
An
organization structure is an arrangement of lines of responsibility within the
entity.
52)
A
responsibility center can be structured to promote better alignment of
individual and company goals.
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