Budget reports compare actual results with planned objectives. All budget reports are prepared on a weekly basis. Management uses budget reports to analyze differences between. determine their causes.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Jim Thome has prepared the following list of statements about budgetary control.
Identify each statement as true or false.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Budget reports compare actual results with planned objectives.
All budget reports are prepared on a weekly basis.
Management uses budget reports to analyze differences between actual and planned results and
determine their causes.
As a result of analyzing budget reports, management may either take corrective action or modify future
plans.
Budgetary control works best when a company has an informal reporting system.
The primary recipients of the sales report are the sales manager and the vice-president of production.
The primary recipient of the scrap report is the production manager.
A static budget is a projection of budget data at one level of activity.
Top management's reaction to unfavourable differences is not influenced by the materiality of the
difference.
A static budget is not appropriate in evaluating a manager's effectiveness in controlling costs unless the
actual activity level approximates the static budget activity level or the behaviour of the costs is fixed.
Transcribed Image Text:Jim Thome has prepared the following list of statements about budgetary control. Identify each statement as true or false. 2. 3. 4. 5. 6. 7. 8. 9. 10. Budget reports compare actual results with planned objectives. All budget reports are prepared on a weekly basis. Management uses budget reports to analyze differences between actual and planned results and determine their causes. As a result of analyzing budget reports, management may either take corrective action or modify future plans. Budgetary control works best when a company has an informal reporting system. The primary recipients of the sales report are the sales manager and the vice-president of production. The primary recipient of the scrap report is the production manager. A static budget is a projection of budget data at one level of activity. Top management's reaction to unfavourable differences is not influenced by the materiality of the difference. A static budget is not appropriate in evaluating a manager's effectiveness in controlling costs unless the actual activity level approximates the static budget activity level or the behaviour of the costs is fixed.
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