Concept explainers
ETHICS CHALLENGE C1
BTN 20-3 Both the budget process and budgets themselves can impact management actions. Both positively and negatively. For instance, a common practice among not-for-profit organizations and government agencies is for management to spend any amounts remaining in a budget at the end of the budget period, a practice often called “use it or lose it.” The view is that if a department manager does not spend the budgeted amount, top management will reduce next year’s budget by the amount not spent. To avoid losing budget dollars, department managers often spend all budgeted amounts regardless of the value added to products or services. All of us pay for the costs associated with this budget system.
Required
Write a half-page report to a local not-for-profit organization or government agency offering a solution to the “use it or lose it” budgeting problem.
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CONNECT PLUS-FINANCIAL & MANAGERIAL AC
- #40arrow_forward32. Which of the following statements about budget acceptance in an organization is true? Group of answer choices The most widely accepted budget by the organization is the one prepared by top management. Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process. The most widely accepted budget by the organization is the one prepared by the department heads. Budgets are hardly ever accepted by anyone except top management.arrow_forward4arrow_forward
- Help question 11arrow_forward18 Which of the following is not the direct benefit of the budgeting process? Identification of potential bottlenecks or constraints. Goal congruence between the personal goals of managers and the goals of the organization. Payments and completion of taxes Communication throughout the organization.arrow_forward7arrow_forward
- 13. All of the following are functions of the budget committee except⦁ review the budgets it submits for approval in an organization.⦁ determine the bonuses the organization awards to employees that achieve the target budget.⦁ approve the final budget it expects the organization to implement.⦁ remove unwarranted slack in the workplace.arrow_forwardQUESTION 22 Which of the following are reasons to generate a pro forma cash budget on a monthly basis? a. An income statement indicates a profit but the budget may indicate a loss. b. A business can monitor the actual cash on hand. c. Sales are recognized as income when the sale is made. d. All of the above.arrow_forward21arrow_forward
- Since budgets affect many people in an organization, they can have significant behavioural implications. Allowing people to participate in setting their own budget targets may improve commitment those targets but create the incentive to build budgetary slack into budget estimates. Required: Explain three disadvantages of budgetary slack from the point of view of The business unit managers who must achieve the budget Corporate managementarrow_forwardCh 23 DQ 4,5,6arrow_forwardWhich of the following statement is incorrect: Question 28Answer a. Budget is a critical tool for managing government revenue. b. Government budget is a cyclical process. c. Budgets are only used for revenue controls d. Revenue management is important in controlling government revenuesarrow_forward
- Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning