
To identify: The correct option out of the given statements.

Answer to Problem 1QC
Option a. Planning is the management responsibility which involves the use of budgets.
Explanation of Solution
Management responsibilities: The management of the organization is responsible for various functions like planning, directing, controlling, and decision making in order to achieve the success. A manager implements the established standards, thinks of various alternatives in order to meet the defined standards or budgets and identify the factors leading towards undesirable results.
a.
Planning: Planning is the first and foremost function performed by the manager which is concerned with defining objectives and goals of the particular entity and the manner in which these goals can be achieved. While planning, the management sets particular standards in the form of budgets. Budgets are defined after a due observation of the financial structure of the organization. Planning deals with the formation of budgets. Thus, this option is correct.
b.
Directing: Directing is the activity which involves supervising the daily operations of the business entity and it involves taking small decisions which are concerned with sales or products such as the deciding the promotional plan for a particular product in order to boost its sales. But this activity does not involve the use of budgets. Thus, this option is not correct.
c.
Controlling: Controlling is the responsibility of management which deals with the revaluation of plans and actions by comparing the actual results obtained and the standards set against them. Controlling is a kind of feedback which determines to what level an entity has been successful in its operations. Thus controlling is the responsibility of the management which involves evaluating the result of operations against the budget but does not involve the use of budgets. Therefore, the option is correct.
d.
None of the above: The management activity which involves comparing the budgets and actual results is controlling. Thus, this option is incorrect.
Want to see more full solutions like this?
Chapter 1 Solutions
Managerial Accounting, Student Value Edition Plus NEW MyLab Accounting with Pearson eText -- Access Card Package (4th Edition)
- In the table below, choose the financial instrument to list on the left side that best explains the example on the right side. Types of financial instrument to select from: financial asset, financial liability, equity, compound instrument, basic option, swap, forward, future, warrant, put option, or call option. Type of financial instrument Example A company contracts with an investment bank to pay the bank prime rate + 1% interest on $25 million of debt in exchange for receiving 5% from the bank. Company Abacus issues $10 million debentures with warrants to purchase shares for $10/share within 8 years. A company contracts to sell 100 barrels of oil at $110/barrel in March on the Chicago Mercantile Exchange. Note payable A company purchases the right but not the obligation to purchase 5,000 shares in another company at $15 each over a 12-year period. Company X contracts to buy 1,000 oz of silver at $40/oz on March 15,…arrow_forwardGeneral Accountingarrow_forwardI am trying to find the accurate solution to this financial accounting problem with the correct explanation.arrow_forward
- Can you solve this financial accounting problem with appropriate steps and explanations?arrow_forwardGeneral Accountingarrow_forwardOn August 15, 2026, Tropical Breeze Company issued 80,000 options on the shares of Sunshine Corporation. Each option gives the option holder the right to buy one share of Sunshine Corporation at $70 per share until March 16, 2027. Tropical Breeze received $800,000 for issuing these options. At the company's year-end of December 31, 2026, the options contracts traded on the Montreal Exchange at $9.50 per contract. On March 16, 2027, Sunshine Corporation shares closed at $63 per share, so none of the options was exercised. Required Record the journal entries related to these call options.arrow_forward
- Can you help me solve this financial accounting question using valid financial accounting techniques?arrow_forwardI need the correct answer to this financial accounting problem using the standard accounting approach.arrow_forwardPlease provide the solution to this financial accounting question using proper accounting principles.arrow_forward
- Can you explain the correct approach to solve this financial accounting question?arrow_forwardI need help with this financial accounting question using the proper financial approach.arrow_forwardOcean Corp. has a single class of shares. As its year ended December 31, 2025, the company had 5,000,000 shares issued and outstanding. On the stock exchange, these shares were trading at around $7. In the company's accounts, these shares had a value of $50,000,000. The equity accounts also show $650,000 of contributed surplus from previous repurchases of shares. On January 15, 2026, Ocean repurchased and cancelled 250,000 shares at a cost of $7 per share. Later in the year, on August 20, the company repurchased and cancelled a further 475,000 shares at a cost of $14 per share. Required Record the journal entries for the two share transactions in 2026.arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





