Deck 2: Building a Basic Budget - Incremental Budgeting

Question 1

The role of the chart of accounts is to:

A) summarize financial transactions into homogeneous categories.
B) determine if revenues exceed expenses.
C) determine if assets exceed liabilities.
D) summarize organizational progress towards goals.

Answer 1

A

Question 2

An income statement reports:

A) revenues, expenses, and profit during an accounting period.
B) assets, liabilities, and equity at the end of an accounting period.
C) the flow of cash into and out of an organization during an accounting period.
D) an organization's operating plan for the next fiscal year.

Answer 2

A

Question 3

A balance sheet reports:

A) revenues, expenses, and profit during an accounting period.
B) assets, liabilities, and equity at the end of an accounting period.
C) the flow of cash into and out of an organization during an accounting period.
D) an organization's operating plan for the next fiscal year.

Answer 3

B

Question 4

Which of the following is a reason why employees will work harder or smarter when gain-sharing is used?

A) To reduce costs because they receive a portion of the cost savings
B) To reduce costs because they receive a portion of profits
C) They are paid for piece work rather than on salary
D) They all employees receive equal wages
E) All of these are correct.

Question 5

Expenses in incremental budgets are increased or decreased if actual output is higher or lower than forecasted output.

Question 6

The income statement reports the revenues and expenses of an organization.

Question 7

The balance sheet reports the assets and liabilities of an organization.

Question 8

The balance sheet reports the revenues and expenses of an organization.

Question 9

Every object code must use the same inflation rate when increasing expenditure base outlays for expected price increases.

Question 10

The main idea behind gain-sharing programs is to encourage workers to reduce production costs by sharing a portion of any cost savings with them.