Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Question
Chapter 14, Problem 1Q
To determine
Whether the given statement is correct
Expert Solution & Answer
Explanation of Solution
Given statement:
The budgets are beneficial only to the small scale companies as they can estimate the sales with accuracy.
Whether the given statement is correct:
The statement is incorrect as budgets are useful for both the small and large companies. Budgets are the tool of communication where the company communicates its objectives through budgets in a document by formalizing the plans framed by management.
Budgets and these kinds of benefits are applicable to all sizes of the companies which operate at various levels of complexity.
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Students have asked these similar questions
Generally speaking, budgets are not used to:
assist in the control of profit and operations.
facilitate communication and coordinate activities.
evaluate performance.
create a plan of action.
identify a company's most profitable products.
Which of the following is not a benefit of budgeting?
O Provide a way to measure business performance
Help managers communicate expectations and quickly. spot deviations
Keep managers focussed on financial implications of their business decisions
O Provide a way to hire specialized labors
D1.
Account
How can variable expenses, indirect labor, and administrative and marketing expenses being higher than they were budgeted for be considered a weakness?
Chapter 14 Solutions
Survey Of Accounting
Ch. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - 3.What are the three levels of planning? Explain...Ch. 14 - 4.What is the primary factor that distinguishes...Ch. 14 - 5.What is the advantage of using a perpetual...Ch. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - 8. Ken Shilov, manager of the marketing...Ch. 14 - Prob. 9QCh. 14 - 10.What is the normal starting point in developing...
Ch. 14 - 11. How does the level of inventory affect the...Ch. 14 - 12.What are the components of the cash budget?...Ch. 14 - 13.The primary reason for preparing a cash budget...Ch. 14 - 14.What information does the pro forma income...Ch. 14 - 15.How does the pro forma statement of cash flows...Ch. 14 - Exercise 7-1A Budget responsibility Teresa...Ch. 14 - Exercise 7-2A Preparing a sales budget Parliament...Ch. 14 - Prob. 3ECh. 14 - Exercise 7-4A Preparing sales budgets with...Ch. 14 - Exercise 7-5A Determining cash receipts from...Ch. 14 - Exercise 7-6A Using judgment in making a sales...Ch. 14 - Exercise 7-7A Preparing an inventory purchases...Ch. 14 - Exercise 7-8A Preparing a schedule of cash...Ch. 14 - Exercise 7-9A Determining the amount of expected...Ch. 14 - Exercise 7-10A Preparing inventory purchases...Ch. 14 - Exercise 7-11A Preparing a schedule of cash...Ch. 14 - Prob. 12ECh. 14 - Exercise 7-13A Preparing a cash budget The...Ch. 14 - Exercise 7-14A Determining amount to borrow and...Ch. 14 - Prob. 15ECh. 14 - Problem 7-16A Behavioral impact of budgeting...Ch. 14 - Prob. 17PCh. 14 - Problem 7-18A Preparing an inventory purchases...Ch. 14 - Prob. 19PCh. 14 - Problem 7-21A Preparing a cash budget Fayette...Ch. 14 - Prob. 21PCh. 14 - Problem 7-22A Preparing budgets with multiple...Ch. 14 - Problem 7-23A Preparing a master budget for retail...Ch. 14 - ATC 7-1 Business Applications Case Preparing and...Ch. 14 - ATC7-2 Group Assignment Master budget and pro...Ch. 14 - ATC 7-4 Writing Assignment Continuous budgeting...Ch. 14 - Ethical Dilemma Bad budget system or unethical...
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- Q.Why might managers find a flexible-budget analysis more informative than a static-budget analysis?arrow_forwardBudgeting is essential to businesses, but it is not that simple to implement. What are some challenges and weaknesses that a firm may find in the budgeting process?arrow_forwardQ1) (Write in box “True or False “ ) A. The most forward-looking budget is the strategic plan, which sets the overall goals and objectives of the organization. ( ) B. An activity-based flexible budget is based on budgeted costs for different activity and related cost driver. ( ) C. Managers trying to evaluate the effects of changes in volume of goods or services produced might not be interested in upward changes such as increased sales expected from increases in promotion or…arrow_forward
- 4.arrow_forwardWhich of the following statements are TRUE? 1. Responsibility accounting attempts to assign blame for problems to a specific manager. 11. One benefit of a budget is that it helps managers gather relevant information for improving future performance. III. Challenging budgets tend to motivate improved performance. IV. Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager. a) I, III, and IV are true. b) I and IV are true c) II, III, and IV aregrue. d) All statements are truearrow_forward2 Which of the following items does not follow from the adoption of a budget? a. Deterrent to waste b. Basis for performance evaluation c Guarantee of accomplishing the profit objective d. Promote efficiencyarrow_forward
- Various types of budgets facilitate understanding about the big picture of a business. There are budgets that are set and unchangeable, as well as budgets that allow for variability. •What are two different types of budgets? And how do they compliment each other? •What is the difference between a flexible budget?and a static budget? •Which budget works best for a business?arrow_forwardWhich among the following is not an element of budgeting? a. Budgeting should state the firm’s expectations clearly b. The targets fixed should be very high in budgeting. c. Good system of accounting is essential. d. The authority and responsibility should be clearly fixed.arrow_forward1.- True or False. Fill in the space with your answer (V) or (F), always justify that you qualify it as false. 1. _-_ A budget is the result of the accounting that the company performs for an accounting period already carried out. 2. -- Through the breakeven point we determine the minimum quantity that a company must sell in order to have a moderate or balanced profit. 3. ___ The Direct Cost approach is the one that presents the cost of sale directly integrating the fixed and variable cost. 4. Sales is an aspect that can be budgeted based on management's goals. 5. -_ The master budget only contemplates the estimation of the most important things for a company, such as its sales.arrow_forward
- Which of the following statements are TRUE? I. Responsibility accounting attempts to assign blame for problems to a specific manager.II. One benefit of a budget is that it helps managers gather relevant information for improving future performance.III. Challenging budgets tend to motivate improved performance.IV. Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager.arrow_forward1. What is the difference between strategic and operational plans?2. What is the purpose of financial plans?3. What are the component of an operations plans?4. What are the pro forma financial statements?5. What is the percentage of sales forecasting method? What are some of the limitations financial analysis should be aware of in applying this method?6. What is a cash budget? What are the usual steps involved in preparing a cash budget?7. Explain the difference between deterministic and probabilistic financial planning models.arrow_forwardIn respect to GASB, how important is budgeting? O a. Very Important O b. Not at all - all about the profits King Oc. C. Od. Important O e. moderately importantarrow_forward
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