7.A flexible budget: Question 7 options: is, in essence, a series of static budgets at different levels of activity. can be prepared for each of the types of budgets included in a master budget. increases budget allowances both directly and proportionately for variable costs as production increases. All three of the other choices are correct.

8.The initial budget prepared in the master budget is the: Question 8 options: budgeted balance sheet. sales budget. production budget. budgeted income statement.

9.Which of the following is true with regard to budgeting vs. long-range planning? Question 9 options: Both tend to be very detailed. They are the same in all significant aspects. Budgeting is oriented more toward short-term goals; long-range planning toward long-term goals. The maximum length for both usually is a year, with shorter periods of time also common.

10.Which of the following is false with regard to budgetary planning? Question 10 options: For a service enterprise, the critical factor in budgeting is coordinating professional staff needs with anticipated services. Budgets may be used by manufacturing companies, merchandising companies, service enterprises, and not-for-profit organizations. A merchandising company uses a purchases budget instead of a production budget. The starting point for the budgets of a not-for-profit organization is generally receipts, rather than expenditures. 11.Which of the following is true with regard to budgetary planning? Question 11 options: The human behavior aspects of budgeting, while they should not be ignored, are generally of little real significance. The likelihood of a realistic budget is greater when the budget is developed from top management down to lower management. Generally accepted accounting principles require the budgets be prepared at least annually. The cash budget is often considered to be the most important output in preparing financial budgets.