1) Which of the following statements about budgets and budgeting is FALSE? A) Budgets help coordinate financial and operational activities. B) The vast majority of managers use budgeting as an effective cost management tool. C) Budgeting is the process of formulating an organization's plans. D) Managers do not use budgets for performance evaluation E) Two of the above 2) Misuse of budgets can lead to incentives to cheat and lie, Cheating and lying may take the form of A) making short-run decisions just to increase profits that are not in the company's best long-run interests B) budgetary slack C) decreasing profits when actual profits significantly exceed the profit target D) all of the above E) Two of the above except 3) The two main components of a master budget are the A) cash budget and the capital budget B) purchases budget and the budgeted income statement C) budgeted income statement and the budgeted balance sheet D) operating budget and the financial budget E None of the above 4) Which of the following is NOT a component of the operating budget? A) purchases and cost of goods sold budget B) budgeted income statement C operating expense budget D) capital budget E) Two of the above