1. A budget is a detailed financial plan that quantifies future expectations and actions relative to acquiring and using resources.

a. True

b. False

2. Budgets should not be used to provide managers with pre-approval for the execution of spending plans.

a. True

b. False

3. A flexible budget is not designed to change with changes in activity level.

a. True

b. False

4. The production budget comes before the materials purchases budget.

a.True

b. False

5. The starting point for the master budget is an assessment of anticipated production next year.

a. False

b. True

6. With Zero-based budgeting, each expenditure item must be justified for the new budget period.

a. True

b. False

7. A deliberate effort to create breathing room within a budget is known as padding the budget

a. True

b. False

8. Some entities will follow a top-down participative approach to budgeting.

a. True

b False

9. Responsibility accounting is a concept under which managers are held accountable for transactions and events beyond their direct influence and control.

a. True

b. False

10. The master budget is a comprehensive document specifying sales targets, production activities, and financing actions.

a. True

b. False