Midterm 2 Chapter 22

Question 1

Budget

Answer 1

A financial plan that managers use to coordinate a business’s activities

Question 2

Budgetary slack

Answer 2

Occurs when managers intentionally understate expected revenues or overstated expected expenses to increase the chances of receiving favorable performance evaluations

Question 3

Strategic budget

Answer 3

A long term financial plan used to coordinate the activities needed to achieve the long term goals of the company

Question 4

Operational budget

Answer 4

A short term financial plan used to coordinate the actions needed to achieve the short term goals of the company

Question 5

Static budget

Answer 5

A budget prepared for only one level of sales volume

Question 6

Flexible budget

Answer 6

A budget prepared for various levels of sales volume

Question 7

Master budget

Answer 7

The set of budgeted financial statements and supporting schedules for the entire organization; includes the operating budget, capital expenditures budget, and financial budget

Question 8

Operating budget

Answer 8

The set of budgets that projects sales revenue, COGS, and selling and administrative expenses, all of which feed into the cash budgets and then the budgeted financial statements.

Question 9

Capital expenditures budget

Answer 9

The budget that presents the company’s plan for purchasing property, plant, equipment, and other long term assets

Question 10

Financial budget

Answer 10

The budget that includes cash budget and the budgeted financial statements

Question 11

Cash budget

Answer 11

The budget that details how the business expects to go from The beginning cash balance to the desired ending cash balance