This section offers ten multiple-choice questions to help you identify your baseline knowledge of the essentials of preparing a budget. Answers to the questions are given at the end of the test.
- Which of the following is not a true statement?
- A budget is an action plan for allocating resources and expenditures.
- A budget is a historical record of a company’s financial results.
- A budget is a yardstick for measuring managers’ performance.
- The most important element of the budget-preparation process is:
- The assessment of variances between expected and actual results.
- The communication and planning that occur in preparing a budget.
- The end result—the operating, capital, or cash budget that is created.
- One significant disadvantage ...