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Each of the following ten statements includes a pair of words within parenthesis

Management

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Each of the following ten statements includes a pair of words within parenthesis. Indicate

which of the words should be chosen to make the statement true. The first statement is

done as an example.

1. A ( loan application / budget ) is a detailed financial plan that quantifies future

expectations and actions relative to acquiring and using resources.

2. Budgets ( should / should not ) be used to provide managers with "preapproval"

for execution of spending plans.

3. The ( master budget / sales budget ) is a comprehensive document specifying

sales targets, production activities, and financing actions.

4. "Responsibility accounting" is a concept under which managers are held

accountable for transactions and events ( beyond / under ) their direct influence

and control.

5. Some entities will follow a top-down ( mandated / participative ) approach to

budgeting.

6. A deliberate effort to create "breathing room" within a budget is known as

("padding the budget" / "aerating" ).

7. With ( incremental budgeting / zero-based budgeting ), each expenditure item

must be justified for the new budget period.

8. The starting point for the master budget is an assessment of anticipated ( sales

/ production ).

9. This comes before the other: ( production budget / materials purchases

budget ).

10. A ( static budget / flexible budget ) is not designed to change with changes in

activity level.