In a Top-Down Approach to Budgeting, What Occurs

question 49

Multiple Choice

In a top-down approach to budgeting, what occurs?

• A)The upper-level managers impose a budget without soliciting input from department managers.
• B)Lower-level managers are the primary source of information used in setting the budget.
• C)The production budget is developed before the sales budget.
• D)Each budget amount projected by upper-level managers is approved or disapproved by lower-level managers.

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Definitions:

Foreign Currency Approach

A method of assessing and managing the risks associated with changes in foreign exchange rates.

Capital Budgeting

The process used by organizations to evaluate and select major investment projects based on their potential to generate additional profits.

Dividends

Return on capital of corporation paid by company to shareholders in either cash or stock; payments made out of a firm’s earnings to its owners, either in cash or stock.

Foreign Subsidiary

A foreign subsidiary is a company owned or controlled by another company, referred to as the parent company, which is located in a country different from the subsidiary.