1. What are three purposes of budgeting?
2. What are the purposes of a master, planned operating, and financial budget?
3. How does the management by exception concept relate to budgeting? What are five basic principles which, if followed, should improve the probability of preparing a meaningful budget? Why is each important?
4. What is the difference between an imposed budget and a participatory budget?
5. Define and explain a budget variance.
6. What are the two major budgets in the master budget? Which should be prepared first? Why?
7. Distinguish between a master budget and a responsibility budget.
8. Management must make certain assumptions about the business environment when preparing a budget. What areas should be considered?
9. Why is budgeted performance better than past performance as a basis for judging actual results?
10. Describe the concepts of just-in-time inventory systems and zero-base budgeting.