h Budgetary slack is created when:a. The differences between actual and budgeted amounts are the result of unintentional errors.b. The differences between actual and budgeted amounts are due to unforeseen circumstances.c. The differences between actual and budgeted amounts are the direct result of deliberately-introduced bias.d. All of the above.

C. This term best describes budgetary slack, which is deliberately distorted to make the budget…

Answered: Budgetary slack is created when: a. The…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter23: Flexible Budgeting (flexbud)

Section: Chapter Questions

Problem 3R

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Similar questions

What is the impact of unauthorized expenditure (overspending of the allocated budget)
How are the responsibilities of accounting systems different than administrative systems? What is the difference between a cash basis versus an accrual basis for accounting purposes? How do internal control standards increase accountability for procurements? What are some common causes of budget variance?
Suggest, as a budget accountant, what procedures you would advise in order to minimize the likelihood of such biased estimate arising.
Describe the various behavioral problems that are associated with setting a budget too "loosely."
Which of the following statements is false? (You may select more than one answer.)a. A flexible budget is used for control purposes and a static budget is used for planning purposes.b. A flexible budget is prepared at the end of the period and a static budget is prepared at the beginning of the period.c. A flexible budget is not useful for controlling variable costs.d. A static budget provides budgeted estimates for one level of activity.
Which of the following statements is true? I. To provide a basis for comparison of actual performance is one primary purpose of budgeting. II. Ineffective budgets and/or control systems are characterized by the use of budgets as a planning tool only and disregarding them for control purposes III. For better management acceptance, the flow of data to be used for budgeting should begin with Lower levels of management IV. Actual results need not be compared with plan, since the process ends after budget is approved.
Which of the following statements about budgeting is incorrect? a. Budgets provide direction and coordination b. Budgets motivate staff c. A budget is a financial plan. d. A budget looks back and review performance.
Define static budget. Give an example that shows how reliance on a static budget could mislead management.
Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating losses
Discuss the shortcomings of the traditional master budget. In what situations would the master budget perform well?
Responsibility reports should be simple, show variances between the budgeted and actual amounts of controllable revenue and expense items, and be timely. TRUE OR FALSE
What are the advantages and disadvantages of bottom-up budgeting process? What is budgetary slack? Please provide one example of budget slack.

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