. ________ An important part of the planning process is the creation of a budget. 2. ________ Operating budgets focus on the financial resources needed to support operations including cash receipts and disbursements, capital expenditures and financing. 3. ________ Budgets can also create a “use-it-or-lose-it” mentality that encourages managers to spend their entire budgets to avoid a reduction in resources in the next budget p
- A) Enter True or False
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1. |
________ |
An important part of the planning process is the creation of a budget. |
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2. |
________ |
Operating budgets focus on the financial resources needed to support operations including cash receipts and disbursements, capital expenditures and financing. |
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3. |
________ |
Budgets can also create a “use-it-or-lose-it” mentality that encourages managers to spend their entire budgets to avoid a reduction in resources in the next budget period. |
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4. |
________ |
The starting point of the planning process is management’s strategic plan or vision of what they want the organization to achieve over the long term. |
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5. |
________ |
A short-term objective is a specific goal that managers want to achieve in more than a year to reach their long-term goals. |
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6. |
________ |
Planning is the forward-looking phase of the planning and control process that involves setting long-term objectives and defining short-term tactics that will help to achieve them. |
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7. |
________ |
Budgets should not be used to motivate and reward employees. |
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8. |
________ |
Budgets play an important communication role within organizations. They provide a mechanism for managers to share expectations and priorities for the future. |
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9. |
________ |
Budgets also provide useful benchmarks for evaluating and rewarding employee performance. |
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10. |
________ |
One of the major advantages of budgeting is that it forces managers to look to the future. |
- B) Organize the following budgets in order of preparation by placing the number before it:
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Selling and administrative expense budget |
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Manufacturing overhead budget |
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Direct materials purchase budget |
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Budgeted balance sheet |
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Sales budget |
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Direct labor budget |
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Budgeted cost of goods sold |
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Production budget |
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