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Several Terms Related to Budgeting and Accompanying Definitions Are Listed

Question 164

Matching

Several terms related to budgeting and accompanying definitions are listed below. Match each term with the definition that best describes it. The items in each list may be used only once.

Premises:

Responses:

Combines financial and operating budgets

Operating budget

Management's plan for revenues, production and operating costs

Budgetary slack

Intentionally understating revenue targets and overstating cost targets

Favourable variance

Plans and predictions about next period's operating activities

Budget assumptions

Differences in actual and expected revenues, when expected revenues are greater

Financial budget

Contains receipts, disbursements and short-term borrowings or investments

Master budget

Formalized financial plan for future operations

Budget

Management's plans for capital expenditures, long-term financing and cash flows

Budget cycle

Series of steps organizations follow to develop and use budgets

Unfavourablevariance

Actual costs minus expected costs, when actual costs are less

Cash budget

Premises:

Combines financial and operating budgets

Management's plan for revenues, production and operating costs

Intentionally understating revenue targets and overstating cost targets

Plans and predictions about next period's operating activities

Differences in actual and expected revenues, when expected revenues are greater

Contains receipts, disbursements and short-term borrowings or investments

Formalized financial plan for future operations

Management's plans for capital expenditures, long-term financing and cash flows

Series of steps organizations follow to develop and use budgets

Actual costs minus expected costs, when actual costs are less

Responses:

Operating budget

Budgetary slack

Favourable variance

Budget assumptions

Financial budget

Master budget

Budget

Budget cycle

Unfavourablevariance

Cash budget

Correct Answer:

Premises:

Responses:

Combines financial and operating budgets

Management's plan for revenues, production and operating costs

Intentionally understating revenue targets and overstating cost targets

Plans and predictions about next period's operating activities

Differences in actual and expected revenues, when expected revenues are greater

Contains receipts, disbursements and short-term borrowings or investments

Formalized financial plan for future operations

Management's plans for capital expenditures, long-term financing and cash flows

Series of steps organizations follow to develop and use budgets

Actual costs minus expected costs, when actual costs are less

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