Using the bottom-up, or participatory approach a. budgets are first developed by
ID: 2417231 • Letter: U
Question
Using the bottom-up, or participatory approach
a. budgets are first developed by individuals who are most knowledgeable regarding their departments’ or programs’ financial needs.
b. often initially results in an organizational budget that is not financially feasible.
c. requires component budgets to be sent back to the original preparers for revision.
d. does not reflect top management’s perspective from the start.
e. All of the above.
Which of the following will provide the largest differences?
a. Comparing the static budget to the flexible budget,
b. Comparing the static budget to the actual results,
c. Comparing the actual results to the flexible budget,
d. We cannot tell without the actual details.
During an economic downturn
a. Conventional budgeting is more useful because the budget is likely to have a great deal of change.
b. Zero-based budgeting is more useful because the budget is likely to have a great deal of change.
c. Conventional budgeting is more useful because the previous budget provides a good starting point.
d. Zero-based budgeting is more useful because the previous budget provides a good starting point.
A cash budget is useful
a. For liquidity planning.
b. To project cash inflows and outflows.
c. Can show when the organization can invest excess cash.
d. Can show when the organization needs to borrow cash.
e. All of the above.
Explanation / Answer
1.
Asnwer is a. budgets are first developed by individuals who are most knowledgeable regarding their departments’ or programs’ financial needs
2.
Asnwer is
d. We cannot tell without the actual details.
4.
Answer is e. All of the above
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