Midterm

Question 1

The term financial management refers to

Answer 1

Improve decision-making

Question 2

Financial management encompasses two broad

Answer 2

Accounting and finance

Question 3

The term outcomes refers to

Answer 3

Results that the organization is trying to achieve

Question 4

The term outputs refers to

Answer 4

Unit of service provided

Question 5

The term allotments refers to

Answer 5

A system that allocates budget resources to specific time periods

Question 6

The term allocation refers to

Answer 6

Subdividing the appropriation into more detail categories

Question 7

Indirect costs

Answer 7

Costs that are assigned to an organizational unit from elsewhere in the organization

Question 8

Fixed costs

Answer 8

Costs that do not vary as the volume of output changes or relevant range or activity

Question 9

Direct costs

Answer 9

Costs incurred with in the organizational unit for which the manager has responsibility for

Question 10

Cost objective

Answer 10

Anything for which a measurement of cost as desired

Question 11

What is the focus of the decisions in public service organizations

Answer 11

Financial management is the subset of management that focuses on generating financial information that can be used to improve decision-making. The focuses of decisions in public service organizations are to provide service to the public at minimal cost

Question 12

What are the two major subdivisions of accounting? Explain

Answer 12

There is managerial and financial accounting. Managerial accounting relates to generating financial information which managers can use to improve the future results of the organization. Financial accounting provides retrospective information. When events with financial implications occur they are recorded through an accounting system and Are reported on a monthly, quarterly or annual basis

Question 13

Why would a special purpose budget be used?

Answer 13

A special budget is used for a specific project that is outside the regular budget. And organization uses a special budget to decide if it will continue with the project.

Question 14

List, describe and explain as to what are the different types of budgets

Answer 14

The master budget incorporates and summarizes everything for the upcoming year. The operating budget plans for revenues and expenses. The financial budget is broken into two sections, cash and capital. The cash budget handles cash receipts and payments. The capital budget plans for acquisition of capital assets.

Question 15

Explain as to why are there any limits on government taxation or spending

Answer 15

One reason is non-for profit organizations. Since not-for-profit do not seek profits, any money generated get sent back to the organization to be used to accomplish the goal. A reason for a limit on government spending is earmarked money. Meaning the funds for that project, if earmarked, can only be used for that project and anything that is mentioned in the earmark.

Question 16

What is performance budgeting? What does it try to accomplish? How does the method work? Explain

Answer 16

These are budgets that attempt to plan the resources needed for the desired outcome. This is done by focusing on the level of resources instead of the outcome. Performance budgets are useful when there is no clear relationship between resources and outcomes.

Question 17

To capital budgets have any impact on operating budgets explain

Answer 17

Yes, capital budgets have an impact on operating budgets. Debt financing is used to find capital assets which require principal plus interest payments. The operating budget reflects a part of the interest and maintenance of the assets.