Which of the following statements about the top-down approach to budgeting are true?(1) The process begins with general budget guidelines being issued by a budgetcommittee or top management(2) The process of developing the budgets is characterized by the participation oflower-level personnel(3) It is imposed on lower-level personnel who do not become involved in the budgetconstruction process in a significant way(4) It is characterized by sound budget preparation practices
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4 .There are a number of benefits associated with budgeting.Which of the following is NOT a benefit of the budget process?
A Budgets eliminate the opportunity for slack or padding in an organization B Budgets help ensure that long-term goals are achieved C Budgets are useful tools in performance evaluation D Budgets can help identify production bottlenecks
5 .The following statements relate to the participation of junior management in the budgetsetting process:(i) It speeds up the budget setting process.(ii) It increases their commitment to budgets(iii) It incorporates their knowledge into budgets.(iv) It improves their morale and motivation.Which of the statements are true?
A (i), (ii) and (iii) B (i), (ii) and (iv) C (ii), (iii) and (iv) D (ii) and (iii) only
7 .Which of the following are considered to be benefits of a participative approach tobudgeting?(1) Individuals at all organizational levels are recognized as being part of the teamwhich gives greater support to the organization.(2) Budget estimates are prepared by those in direct contact with activities which giverise to variance reporting.(3) Managers are held responsible for attaining their goals, and cannot be absolved ofthis if unrealistic goals are demanded by the budget.(4) When managers set the final targets for the budget, top management need not beconcerned with the overall profitability of current operations.
A 1, 2 and 3 only B 1, 2 and 4 only C 1, 3 and 4 only D 2, 3 and 4 only
8 .Which of the following are involved in the planning and control cycle?(1) The identification of alternative courses of action.(2) The preparation of annual budgets.(3) Responding to differences between actual and planned performance.
A 1 and 2 only B 1 and 3 only C 2 and 3 only D 1, 2 and 3
9 .Which of the following factors is least likely to motivate managers to achieve higherlevels of performance?
A A reward system B A top-down approach to budgeting C A non-accounting style of management D Setting targets higher than intended achievement
10 .The following statements relate to managerial incentive schemes:(1) The primary objective of a reward scheme is to motivate managers to achieveorganisational objectives.(2) A good reward scheme is which is objective, unbiased and consistently applied.(3) All rewards are tangible and have a monetary value.Which statements are true?
A 1 and 2 only B 1 and 3 only C 2 and 3 only D 1, 2 and 3
