11) The priority approach to budgeting is an incremental approach.

12) The actual data resulting from a strategy should be compared to budgeted results.

13) Planning the performance of the organization, providing a frame of reference, and investigating variances are part of the

A) budgetary cycle.

B) cash budget.

C) financing budget.

D) master budget.

E) production budget.

14) The master budget embraces the impact of

A) operating and managerial decisions.

B) operating and financing decisions.

C) financing and managerial decisions.

D) operating, managerial, and financing decisions.

E) the differences between the budget and the actual costs, for a given cycle.

15) A master budget

A) includes only financial aspects of a plan and excludes nonfinancial aspects.

B) is an aid to coordinating what needs to be done to implement a plan.

C) includes broad expectations and visionary results.

D) should not be altered after it has been agreed upon.

E) is based upon budget constraints outside of management control.

16) Budgets are advantageous because they

A) compel planning that includes the implementation of plans, provide performance criteria, and promote goodwill.

B) provide performance criteria, promote goodwill, and save money.

C) compel planning that includes the implementation of plans, provide performance criteria, and promote communication and coordination within the organization.

D) compel planning that includes the implementation of plans, require organizing, and ensure controlling.

E) ensure that the organization meets its goals.

17) The process of getting a company's objectives understood and accepted by all departments and functions is known as

A) communication.

B) compilation.

C) continuity.

D) coordination.

E) administration.

18) Long-run planning (strategic plans) involves the preparation of the

A) operating budget.

B) cash budget.

C) budget standards.

D) profit plan.

E) capital budget.

19) A limitation of comparing a company's performance against actual results of last year is that

A) it includes adjustments for future conditions.

B) feedback is no longer a possibility.

C) the benchmark may be unrealistic.

D) past results can contain inefficiencies of the past year.

E) the budgeting time period is set at one year.

20) Stretch goals in budgeting tend to

A) decrease line-management participation in attaining corporate goals.

B) increase failure.

C) increase anxiety without motivation.

D) motivate improved performance beyond the status quo.

E) improve communication and coordination.