Which of the Following Is Not a Benefit of Budgeting

question 34

Multiple Choice

Which of the following is not a benefit of budgeting

• A)It coordinates the activities of the entire organization by integrating the plans and objectives of the various parts.
• B)It provides benchmarks for evaluating subsequent performance.
• C)It ensures that accounting records comply with generally accepted accounting principles.
• D)It uncovers potential bottlenecks before they occur.

Recognize the impact of using borrowed money on shareholders' equity and the concept of "trading on the equity."

Appreciate the implications of variations in generally accepted accounting principles (GAAP) on the quality of earnings reported.

Understand the significance of inventory turnover in analyzing operational efficiency.

Recognize the importance of proper disclosure including disposal of significant components in financial statements.

---

Definitions:

Sales Returns

Transactions where customers return previously purchased merchandise, resulting in a refund or credit.

Bad Debt Expense

An expense recorded to account for receivables that are not expected to be collected, reflecting credit losses in the financial statements.

Accounts Receivable

Outstanding payments from customers for goods or services a company has already delivered.

Average Collection Period

The average number of days it takes for a business to receive payments from its customers for invoices issued, indicative of the effectiveness of a company's credit and collection policies.