Use the following terms to complete the sentences that follow. Terms may be used once, more than once, or not at all:
Capital expenditures budget
Rolling budget
Participative
Zero-based budget
Budgetary slack
Directing/leading
Operating budgets
Master budget
Control
Production budget
Planning
Financial budgets
Sales forecast
Cost of goods sold budget
Budgeted income statement
Top-down
Budgeted balance sheet
1. The _______ is a set of interrelated budgets that constitutes a plan of action for a specific period.
2. The _______ establish goals for the company’s sales and production personnel.
3. A(n) _______ approach to budgeting is more likely to motivate people to work toward an organization’s goal than a(n) _______ approach.
4. Managers who intentionally understate expected sales or overstate expected expenses are creating _______ .
5. Comparing actual results to budgeted plans is an example of management performing its
_______ function.
6. The starting point for preparing the master budget is the _______ .
7. The _______ provides information about a company’s expected revenue, expenses, and profitability for a period of time.
8. Using a(n) _______ , when one budget period passes, another is automatically added at the end.
9. The _______ provides information about a company’s expected financial position at a specific point in time.
10. Once the _______ has been prepared, the raw materials purchases, the direct labor, and the manufacturing overhead budgets can be prepared.