Chapter 7 Flashcards
1
Q
A budget is a detailed plan for the future and is usually expressed in ___ terms
A
Quantitative Terms
2
Q
The various budgets are collectively known as the ___
A
Master Budget
3
Q
Explain how budgets provide “before-the-fact control” and “after-the-fact control”
A
Before-the-fact Control
-identify bottle bottlenecks/problems
After-the-fact Control
-provide a benchmark for evaluating performance
4
Q
4 Benefits of Budgeting?
A
- allocates resources effectively
- communication of corporate goals
- Motivates managers to plan for the future
- Coordination of activities of segments
5
Q
What is the most common length of a budget?
A
1 year
but divided into quarters
then divided into months
6
Q
Budgets are used for both ___ and ___
A
Planning and Control
7
Q
When preparing a master budget, what gets prepared last? What gets prepared first?
A
First
-Sales Budget
Last:
- Budgeted Income Statement
- Budgeted Balance Sheet
