Podcast
Questions and Answers
What is the primary purpose of budgeting in the context of budgetary control?
What is the primary purpose of budgeting in the context of budgetary control?
- To communicate information within a firm
- To serve as a tool for management control (correct)
- To establish and maintain coordination
- To measure success of the business
Which statement best describes the main feature of budgetary control?
Which statement best describes the main feature of budgetary control?
- Setting budgets without any comparison to actual performance
- Establishing budgets based on past performance
- Revision of budget only when there are significant changes
- Taking corrective actions based on actual performance vs. budget (correct)
In what way does budgeting contribute to the planning function of management?
In what way does budgeting contribute to the planning function of management?
- By encouraging managers to complete tasks in line with business objectives
- By serving as a pivot for management control
- By communicating information within the firm
- By designing a desired future position for the entity (correct)
Which component is NOT typically part of a master budget for a non-manufacturing company?
Which component is NOT typically part of a master budget for a non-manufacturing company?
What is the basis for comparison in budgetary control to analyze variations in performance?
What is the basis for comparison in budgetary control to analyze variations in performance?
What is a characteristic of a budget according to the provided text?
What is a characteristic of a budget according to the provided text?
Which type of budget is generally for one or two years according to the text?
Which type of budget is generally for one or two years according to the text?
What is the focus of operating budgets in a firm as per the information provided?
What is the focus of operating budgets in a firm as per the information provided?
Which type of budget is concerned with cash receipts and disbursements, working capital, and financial position?
Which type of budget is concerned with cash receipts and disbursements, working capital, and financial position?
When is a budget to be approved according to the text?
When is a budget to be approved according to the text?
