Multiple choice questions: Select the correct option from the following:

1) Which of the following is an example of the benchmarking function of a budget?

A) A budget demands integrated input from different business units and functions.

B) Budgeting requires close cooperation between accountants and operational personnel.

C) Budget figures are used to evaluate the performance of managers.

D) The budget outlines a specific course of action for the coming period.

2) An intentional understatement of expected revenues or overstatement of expected expenses by managers in order to have a favorable performance evaluation is known as:

A) Benchmarking.

B) Appropriation.

C) Budgetary slack.

D) Variance analysis.

3) Which of the following budgets focuses on the income statement and its supporting schedules?

A) The operating budget

B) The cash budget

C) The capital expenditures budget

D) The sales budget

4) The starting point in the budgeting process is the preparation of the:

A) Cash budget.

B) Production budget.

C) Sales budget.

D) Budgeted income statement.

5) The ________ details how the business expects to go from the beginning cash balance to the desired ending cash balance.

A) Capital expenditures budget

B) Budgeted income statement

C) cash flow statement

D) Cash budget