1.Inventory policy is most critical in the budgeting of:

a. Salesb. Cost of Sales c. Purchases d. Expenses

2. Budgets are related to which of the following management functions?

a. Planningc. Performance evaluationb. Controld. All of these

3. Using the concept of 'expected value" in sales forecasting means that the sales forecast to be used is

a. developed using the indicator method b. the sum of the sales expected by individual managers c. based on expected selling prices of the products d. based on probabilities

4. Ineffective budgets and/or control systems are characterized by the use of

a. budgets as a planning tool only and disregarding them for control purposes. b. budgets for motivation c. budgets for coordination. d. the budget for communication.

5. A budget manual which enhances the operation of budget system, is most likely to include:

a. Distribution instructions for budget schedules. b. Employee hiring policies c. Documentation of the accounting system software d. Company policies regarding authorization of transactions.