Question 1

Activity based budgeting is a system used for products that tend to have decreasing prices or increasing quality across time.

Accepted Answer

A) True 
 B)False

Question 2

Capital budgeting has no effect on the income cycle because it only affects items in the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 3

A budget that continually reflects the most recent results and is updated to incorporate changes in strategy and the economy is called a:

Accepted Answer

A)  Flexible budget 
B)  Static budget 
C)  Rolling budget 
D)  Zero-based budget 
A)  Flexible budget 
B)  Static budget 
C)  Rolling budget 
D)  Zero-based budget

Question 4

Planning this year's expenditure based solely on last year's expenditure provides managers with incentives to be efficient with their use of organisational resources.

Accepted Answer

A) True 
 B)False

Question 5

Excessive reliance on achieving budget targets does not usually result in the best outcome for the organisation.

Accepted Answer

A) True 
 B)False

Question 6

Power struggles, blame shifting and game playing often accompany the budgeting process.

Accepted Answer

A) True 
 B)False

Question 7

Under which of the following types of budgeting must managers justify their budget requests each year as if prior information did not exist?

Accepted Answer

A)  Activity-based budgeting 
B)  Zero-based budgeting 
C)  Kaizen budgeting 
D)  Flexible budgeting 
A)  Activity-based budgeting 
B)  Zero-based budgeting 
C)  Kaizen budgeting 
D)  Flexible budgeting

Question 8

Determining what level of profits should be distributed to equity holders is an example of a strategic budgeting question relating to the income cycle.

Accepted Answer

A) True 
 B)False

Question 9

A key principle for the Beyond Budgeting approach is:

Accepted Answer

A)  A command and control approach to planning 
B)  Replacing annual planning with rolling forecasts 
C)  Restrict access to "need to know" 
D)  Rewards based on meeting targets 
A)  A command and control approach to planning 
B)  Replacing annual planning with rolling forecasts 
C)  Restrict access to "need to know" 
D)  Rewards based on meeting targets

Question 10

Building slack into budgets is likely to occur when:

Accepted Answer

A)  Rewards are linked to meeting budget targets. 
B)  Budget targets are easily achievable 
C)  Participatory budgeting is not used. 
D)  All of the above 
A)  Rewards are linked to meeting budget targets. 
B)  Budget targets are easily achievable 
C)  Participatory budgeting is not used. 
D)  All of the above

Question 11

Kaizen budgeting is based on the premise that prices will decline over time and targets cost reductions to accommodate this.

Accepted Answer

A) True 
 B)False

Question 12

Multiple budgets can be used to indicate best case and worst case outcomes.

Accepted Answer

A) True 
 B)False

Question 13

The asset cycle relates to the extent to which company assets generate returns for shareholders and company growth.

Accepted Answer

A) True 
 B)False

Question 14

A participatory approach to setting budget targets may improve the accuracy of the budgets.

Accepted Answer

A) True 
 B)False

Question 15

Budgeting which makes an adjustment to last year's cost centre expenditure is known as:

Accepted Answer

A)  Incremental Budgeting 
B)  Rolling Budgeting 
C)  Engineered Budgeting 
D)  Program Budgeting 
A)  Incremental Budgeting 
B)  Rolling Budgeting 
C)  Engineered Budgeting 
D)  Program Budgeting

Question 16

The philosophy of encouraging employees to continuously focus on building strong customer relationships is known as:

Accepted Answer

A)  Employee dedication 
B)  Customer intimacy 
C)  Autonomous employees 
D)  Employee evaluation 
A)  Employee dedication 
B)  Customer intimacy 
C)  Autonomous employees 
D)  Employee evaluation

Question 17

Incremental budgeting has been criticised because it:

Accepted Answer

A)  Encourages managers to continually reduce costs at the expense of quality 
B)  Does not encourage managers to seek ways to use the organisation's resources more efficiently 
C)  Encourages managers to used fixed costs instead of variable costs. 
D)  All of the above 
A)  Encourages managers to continually reduce costs at the expense of quality 
B)  Does not encourage managers to seek ways to use the organisation's resources more efficiently 
C)  Encourages managers to used fixed costs instead of variable costs. 
D)  All of the above

Question 18

Zero-based budgeting is particularly useful when:

Accepted Answer

A)  Economic conditions are difficult. 
B)  There is significant and rapid technological change. 
C)  There is a high turnover of staff. 
D)  A and B 
A)  Economic conditions are difficult. 
B)  There is significant and rapid technological change. 
C)  There is a high turnover of staff. 
D)  A and B

Question 19

The Kaizen approach to budgeting was developed in:

Accepted Answer

A)  Australia 
B)  Germany 
C)  Japan 
D)  China 
A)  Australia 
B)  Germany 
C)  Japan 
D)  China

Question 20

The Beyond Budgeting philosophy requires the preparation of localised income statements and balance sheets.

Accepted Answer

A) True 
 B)False

Activity based budgeting is a system used for products that tend to have decreasing prices or increasing quality across time.

Capital budgeting has no effect on the income cycle because it only affects items in the statement of financial position.

A budget that continually reflects the most recent results and is updated to incorporate changes in strategy and the economy is called a:

Planning this year's expenditure based solely on last year's expenditure provides managers with incentives to be efficient with their use of organisational resources.

Excessive reliance on achieving budget targets does not usually result in the best outcome for the organisation.

Power struggles, blame shifting and game playing often accompany the budgeting process.

Under which of the following types of budgeting must managers justify their budget requests each year as if prior information did not exist?

Determining what level of profits should be distributed to equity holders is an example of a strategic budgeting question relating to the income cycle.

A key principle for the Beyond Budgeting approach is:

Building slack into budgets is likely to occur when:

Kaizen budgeting is based on the premise that prices will decline over time and targets cost reductions to accommodate this.

Multiple budgets can be used to indicate best case and worst case outcomes.

The asset cycle relates to the extent to which company assets generate returns for shareholders and company growth.

A participatory approach to setting budget targets may improve the accuracy of the budgets.

Budgeting which makes an adjustment to last year's cost centre expenditure is known as:

The philosophy of encouraging employees to continuously focus on building strong customer relationships is known as:

Incremental budgeting has been criticised because it:

Zero-based budgeting is particularly useful when:

The Kaizen approach to budgeting was developed in:

The Beyond Budgeting philosophy requires the preparation of localised income statements and balance sheets.

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Costvolumeprofit Cvp Analysis

Operational Budgets

Job and Process Costing Systems

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters

Exam 5: Planning Budgeting and Behaviour

Activity based budgeting is a system used for products that tend to have decreasing prices or increasing quality across time.

Capital budgeting has no effect on the income cycle because it only affects items in the statement of financial position.

A budget that continually reflects the most recent results and is updated to incorporate changes in strategy and the economy is called a:

Planning this year's expenditure based solely on last year's expenditure provides managers with incentives to be efficient with their use of organisational resources.

Excessive reliance on achieving budget targets does not usually result in the best outcome for the organisation.

Power struggles, blame shifting and game playing often accompany the budgeting process.

Under which of the following types of budgeting must managers justify their budget requests each year as if prior information did not exist?

Determining what level of profits should be distributed to equity holders is an example of a strategic budgeting question relating to the income cycle.

A key principle for the Beyond Budgeting approach is:

Building slack into budgets is likely to occur when:

Kaizen budgeting is based on the premise that prices will decline over time and targets cost reductions to accommodate this.

Multiple budgets can be used to indicate best case and worst case outcomes.

The asset cycle relates to the extent to which company assets generate returns for shareholders and company growth.

A participatory approach to setting budget targets may improve the accuracy of the budgets.

Budgeting which makes an adjustment to last year's cost centre expenditure is known as:

The philosophy of encouraging employees to continuously focus on building strong customer relationships is known as:

Incremental budgeting has been criticised because it:

Zero-based budgeting is particularly useful when:

The Kaizen approach to budgeting was developed in:

The Beyond Budgeting philosophy requires the preparation of localised income statements and balance sheets.

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Costvolumeprofit Cvp Analysis

Operational Budgets

Job and Process Costing Systems

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters