Deck 6: Budgeting

Question 1

Which of the followings forms of budgeting is preferred in sport as it begins with a floor of expenses while also using cost behavior and cost identification techniques?

A) Incremental budgeting
B) Program planning budgeting systems
C) Modified program planning budgeting systems
D) Zero based budgeting
E) Modified zero based budgeting

Answer 1

E

Question 2

Last year's budget is increased or decreased by a percentage using this method of budgeting (a form of line-item budgeting).

A) Incremental budgeting
B) Program planning budgeting systems
C) Modified program planning budgeting systems
D) Zero based budgeting
E) Modified zero based budgeting

Answer 2

A

Question 3

This budgeting system is associated with output budgeting in which specific goals and objectives form the framework for a strategic, goal-oriented budgeting process.

A) Incremental budgeting
B) Program planning budgeting systems
C) Modified program planning budgeting systems
D) Zero based budgeting
E) Modified zero based budgeting

Answer 3

B

Question 4

This budgeting system requires starting the budgeting process with a zero base.

A) Incremental budgeting
B) Program planning budgeting systems
C) Modified program planning budgeting systems
D) Zero based budgeting
E) Modified zero based budgeting

Question 5

Which of the following budgets allows management to forecast future requirements related to property, facilities, and major equipment?

A) Revenue budget
B) Expense budget
C) Cash budget
D) Capital expenditure budget
E) Fixed asset budget

Question 6

A __________ is a forecast because it is based on projecting future sales.

A) Revenue budget
B) Expense budget
C) Cash budget
D) Capital expenditure budget
E) Fixed asset budget

Question 7

The __________ lists the primary activities undertaken by a unit to achieve its goals and allocate dollar amounts to each.

A) Revenue budget
B) Expense budget
C) Cash budget
D) Capital expenditure budget
E) Fixed asset budget

Question 8

The __________ forecasts how much cash the organization will have on hand and how much it will need to meet expenses.

A) Revenue budget
B) Expense budget
C) Cash budget
D) Capital expenditure budget
E) Fixed asset budget

Question 9

When using zero-based budgeting, each part of the organization in which budget decisions are made is referred to as a __________.

A) Budget unit
B) Finance unit
C) Forecast unit
D) Decision unit
E) None of the above

Question 10

Of the following, which is not an advantage of incremental budgeting?

A) The budget is stable and change is gradual.
B) The approach encourages managers to spend up to the budget to ensure that the budget is maintained the following year.
C) Managers can operate their departments on a consistent basis.
D) Coordination between budgets is easier to achieve.
E) All of the above are advantages of incremental budgeting.

Question 11

Budgets are prepared in advance of the time period they cover.

Question 12

Forecasting is the process of defining a vision for your organization and
creating goals and objectives to help achieve this vision.

Question 13

An incremental budget is recommended, as it takes into account changing circumstances.

Question 14

An incremental budget provides an incentive for developing new ideas.

Question 15

The development of goals and objectives for an organization or program unit is fundamental to management planning and PPBS.

Question 16

A PPBS may allow support for irrational objectives.

Question 17

Zero-based budgeting is not well suited to the service industry.

Question 18

A ZBB encourages managers to look for alternatives.

Question 19

A MZBB considers previous money outlays.