1.

The central business activity of a retailer is the

Select one:

a.

Paying dividends.

b.

Issuing of common stock.

c.

Buying and selling inventory.

d.

Depreciating of long-term assets.

2.

The type of budget that focuses on the core activities of a business and lasts for one year or less is known as a(n)

Select one:

a.

Sound (or valid) budget.

b.

Operating (or master) budget.

c.

Financial statement budget.

d.

Capital budget.

3.

An example of good budgeting is that a firm should

Select one:

a.

Have upper management impose budgets on their subordinates.

b.

Make a single operating budget.

c.

Compare budgeted expectations with actual results.

d.

Exclude factors outside its control of the firm.

4.

The difference between revenues and variable costs is the

Select one:

a.

Cost of goods sold.

b.

Contribution margin.

c.

Gross profit.

d.

Net income.