ACCT 110-CH 14 Flashcards
Participative budgeting is a process where…
employees at all levels are involved in the budget process
Capital budgeting focuses on ______ range planning.
Intermediate
When participative budgeting is in place, upper management must…
A. cooperate with subordinates to ensure an effect budget
B. ensure company objectives align with employee objectives
C. be involved to prevent the adoption of lax standards
cooperate with subordinates to ensure an effect budget
be involved to prevent the adoption of lax standards
Budgets can increase stress and reduce individual freedom.
True or False?
True
A continuous 12-month budget is adjusted ______.
at the end of each month
True or False
Budgets help with planning, coordination, and performance evaluation, but not corrective action.
False
A group of detailed budgets and schedules representing the operating and financial plans for the future is called a(n) Blank______ budget.
Master
The budgeting process normally begins with preparing the…
operating budgets
Planning focuses on the coming year
Short term
Type of planning that covers 3-5 years
Intermediate Range
Strategic business planning for the future
5 year plus
intermediate range planning, involves decisions on buying or leasing equipment, whether to stimulate sales, or whether to increase the company’s asset base.
Capital Budgeting
Long-term decisions, defining scope of the business, determine product development and discontinuing.
Strategic Planning
Invites participation in the budget process by all Personnel.
Participative Budgeting
Short-term plans focused on detailed operating activities
Operating Budgeting
describes short-term objectives in specific amount of sale targets, production goals, and financing plans
Master Budget
Advantages of Master Budget
formalizes and documents managerial plans
coordination among departments
12 month budget that is continuously adjusted by adding an additional month at the end of each month
Perpetual Budget
