Managerial Accounting (4th Edition)
Managerial Accounting (4th Edition)
4th Edition
ISBN: 9780133428377
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
bartleby

Videos

Question
Book Icon
Chapter 1, Problem 1QC
To determine

To identify: The correct option out of the given statements.

Expert Solution & Answer
Check Mark

Answer to Problem 1QC

Option a. Planning is the management responsibility which involves the use of budgets.

Explanation of Solution

Management responsibilities: The management of the organization is responsible for various functions like planning, directing, controlling, and decision making in order to achieve the success. A manager implements the established standards, thinks of various alternatives in order to meet the defined standards or budgets and identify the factors leading towards undesirable results.

a.

Planning: Planning is the first and foremost function performed by the manager which is concerned with defining objectives and goals of the particular entity and the manner in which these goals can be achieved. While planning, the management sets particular standards in the form of budgets. Budgets are defined after a due observation of the financial structure of the organization. Planning deals with the formation of budgets. Thus, this option is correct.

b.

Directing: Directing is the activity which involves supervising the daily operations of the business entity and it involves taking small decisions which are concerned with sales or products such as the deciding the promotional plan for a particular product in order to boost its sales. But this activity does not involve the use of budgets. Thus, this option is not correct.

c.

Controlling: Controlling is the responsibility of management which deals with the revaluation of plans and actions by comparing the actual results obtained and the standards set against them. Controlling is a kind of feedback which determines to what level an entity has been successful in its operations. Thus controlling is the responsibility of the management which involves evaluating the result of operations against the budget but does not involve the use of budgets. Therefore, the option is correct.

d.

None of the above: The management activity which involves comparing the budgets and actual results is controlling. Thus, this option is incorrect.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Chapter 1 Solutions

Managerial Accounting (4th Edition)

Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Understanding Systems Development Life Cycle; Author: GreggU;https://www.youtube.com/watch?v=shNOYFlmBOU;License: Standard Youtube License